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Final

CAS EC 101 Final: EC101DDFinalV6 2017ExamPremium

8 pages56 viewsFall 2018

Department
Economics
Course Code
CAS EC 101
Professor
All
Study Guide
Final

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EC101 DD Final Exam December 19, 2017 Version 06
Name (last, first): |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Student ID: |U|__|__|-|__|__|-|__|__|__|__| Discussion Section: |__|__|
Signature____________________________________
p. 1 v. 06
EC101 DD Final Exam F17
INSTRUCTIONS (***Read Carefully***):
ON YOUR QUESTION BOOKLET:
Fill in your name, Student ID, Discussion Section Number (e.g. D5) and your signature.
ON YOUR SCANTRON:
Enter the Course Number (EC101 DD or EE) and date on the lines at the top-left. In the boxes below,
enter your Student ID, your DISCUSSION SECTION number (D1 - D9, E0 - E9), your NAME and
your EXAM VERSION. Be sure that you “bubble” all entries (fill in the small circles) . I will subtract
up to 5 points as punishment for errors in these data!
DURING THE EXAM:
Students who wish to leave the room for any reason must leave the Question Booklet and Scantron
sheet with the instructor or teaching fellow. Students taking the exam on Saturday MUST turn in both
their Question Booklets and their Scantrons when they complete the exam. Students taking the exam
on Tuesday should keep their Question Booklets and turn in only their Scantrons. All students must
show their BU Student IDs when they turn in their Scantrons.
MULTIPLE-CHOICE QUESTIONS:
Choose the BEST answer for each of the multiple-choice questions. (Only ONE answer is allowed,
even when more than one of the answers are technically correct.) On the Question Booklet, CIRCLE
the letter that you chose, so that you have a record of your answers. Then BUBBLE it on the
Scantron.
NEVER CROSS OUT AN ANSWER ON YOUR SCANTRON. Use a PENCIL to bubble your
answers, and keep a good ERASER with you. If you bubble the wrong answer on the Scantron, erase
your mark COMPLETELY, and then bubble the correct answer.
YOU MAY NOT USE A CALCULATOR, CELL PHONE OR LAPTOP.
However, INTERNATIONAL STUDENTS may use electronic translators or dictionaries.
You have 120 minutes to complete the exam. Good luck!
Hint: the area of a triangle = base x height / 2
DO NOT OPEN THIS BOOKLET OR TURN IT OVER
[until told to do so]
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p. 2 v. 06
1. Which of the following is NOT a social cost of
bicycle theft?
a. the value of stolen bicycles
b. the inconvenience of having to leave bicycles
in a safe place
c. the cost of the thief’s time
d. the cost of bicycle locks
Figure BMC. The marginal costs of lamps for a
factory in a perfectly competitive market.
2. See Figure BMC. If the price of lamps is $2, the
factory will obtain about $_____ of producer surplus.
[Choose the closest value.]
a. 10.00
b. 0.00
c. 4.25
d. 8.50
3. See Figure BMC. How many lamps will the factory
produce when the price of lamps is $5?
a. 7
b. 8
c. 0
d. MORE information needed
4. See Figure BMC. The variable cost of producing 5
lamps is about $_____. [Choose the closest value.]
a. 10.00
b. 2.50
c. 5.75
d. more than 50.00
5. Economists use models, because
a. computers are able to process even unimportant
details.
b. every economic situation is essentially the
same, so specific details are unnecessary.
c. exceptions to the model prove that people are
irrational.
d. the omission of unimportant details makes
analysis easier.
6. LeBron James is an extremely talented basketball
player with a salary of almost $23 million per year.
What is true about LeBron?
a. His behavior is a good example of rent seeking.
b. Most of his income can be explained by his
hard work.
c. Most of his income is an economic rent to his
talent.
d. NONE of the above
7. In competitive economies, many workers are often
paid more than would be required to make them
willing to do their jobs, because
a. good workers receive economic rents when
firms compete with each other for labor.
b. firms will not pay economic rents to workers
under competition.
c. firms cannot receive economic rents under
competition.
d. a fair wage maximizes profits.
Table STX. The table below displays the willingness
to pay of each consumer for his first three oranges (no
one wants to eat more than three). Alex, Barb, and
Carlos are the only buyers of oranges.
1st Orange 2nd Orange 3rd Orange
Alex $2.00 $1.50 $0.75
Barb $1.50 $1.00 $0.80
Carlos $0.75 $0.25 $0
8. See Table STX. If the market price of an orange is
$1.20, consumer surplus amounts to
a. $1.10.
b. $1.40.
c. $5.00.
d. $0.70.
9. See Table STX. The market quantity of oranges
demanded is exactly 5 if the price of an orange P
satisfies
a. $1.00 < P < $1.50.
b. $0.80 < P < $1.00.
c. $0.75 < P < $0.80.
d. $0.80 < P < $1.50.
10. Which of the following does NOT affect a consumer's
demand curve for cashmere sweaters?
a. current fashion
b. the consumer’s income
c. expectations about future clothing prices
d. manufacturing costs
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p. 3 v. 06
Figure TXM. Suppose the government enacts an
excise tax in this perfectly-competitive market as
shown below.
11. See Figure TXM. Consumers effectively pay a larger
portion of the tax than producers do, because in the
relevant price range
a. demand is more elastic than supply.
b. supply is more elastic than demand.
c. the supply curve is inelastic.
d. the demand curve is elastic.
12. See Figure TXM. The loss of social surplus caused
by the tax is
a. 120.
b. 40.
c. 60.
d. 0.
13. See Figure TXM. The total reduction in consumer
surplus as a result of the tax is
a. 240.
b. 20.
c. 0.
d. 120.
14. Policy makers should not focus entirely on
maximizing social surplus, because
a. surplus is not related to consumer value.
b. maximizing surplus is inefficient.
c. surplus may be distributed unfairly.
d. there is often too much surplus.
15. The demand for gasoline is more elastic in the long
run than in the short run, because when prices rise,
a. most drivers will continue to prefer big cars.
b. high gasoline prices are unfair to the poor.
c. people who drive to work stop wasting
gasoline.
d. some people will eventually replace old cars
with more fuel-efficient ones.
Scenario BST. Suppose farmers begin to treat cows
with the hormone BST, which causes the cows to
produce a lot more milk. Moreover, many people
believe that milk from BST-treated cows improves
health and increase life expectancy.
[You may draw in the space below to help you
answer. The drawing will NOT be graded.]
16. See Scenario BST. The supply curve for milk will
a. shift left.
b. rotate.
c. be unaffected.
d. shift right.
17. See Scenario BST. The demand curve for milk will
a. rotate.
b. shift right.
c. shift left.
d. be unaffected.
18. See Scenario BST. The equilibrium quantity of milk
a. will decrease.
b. will increase.
c. will not change.
d. could increase or decrease.
19. Judy works 20 hours per week at Star Market and
earns $6.00 per hour. Her boss decides to raise her
wage to $12.00 per hour. Then, Judy says to herself,
“Great, now I don’t have to work so many hours.”
This implies that
a. leisure is an inferior good.
b. the income effect on her demand for leisure is
stronger than the substitution effect.
c. she does not want to ‘buy’ more leisure as she
becomes richer.
d. her demand curve for leisure is not downward
sloping.
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