ECON 001 Georgetown Test12132013A

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Published on 15 Feb 2019
School
Georgetown University
Department
Economics
Course
ECON-001
Professor
SUBJ SCORE #_____________ Version A: Page 1 of 13
Economics 001 NAME _____________________
Professor Levinson GU ID # _____________________
Final Exam
December 13, 2013
DO NOT BEGIN WORKING
UNTIL THE INSTRUCTOR TELLS YOU TO DO SO.
READ THESE INSTRUCTIONS FIRST.
1. Please read and sign the following statement: "In keeping with the Georgetown Honor
System, I assure that this exam is the product of my own work, that I will not make use of
unauthorized resources or collaborate with any other student."
(signature) _________________________________
2. Please write your name and GU ID carefully and legibly at the top of this page.
3. You have 2 hours to complete the exam. All answers are to be recorded on the ParScore
sheet. No work in this booklet will be assessed.
4. You may refer to one 3x5 card with your written notes and use a calculator, but you may
not use any other notes or references.
5. If you have a question during the exam, stay seated and raise your hand.
6. When you are done: If there are fewer than 10 minutes left in the exam period, please
wait patiently and quietly until the exam period is over. If you have finished more than
10 minutes early, you may quietly bring this exam booklet and the ScanTron sheet to the
place indicated by the instructors.
Read the questions carefully. I have tried to be clear. Good luck.
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Version A: Page 2 of 13
BONUS: 5 easy extra points.
Make sure you have completed the following completely, legibly, and accurately.
1) Write your GU ID number on the ParScore sheet.
2) Shade in the circles corresponding to your GU ID number
3) Write your name in the correct spaces on the ParScore sheet.
4) Shade in the circles corresponding to the letters of your name
5) Under “TEST FORM” shade in the letter corresponding to the Version at the top right of
this page: "A", "B", "C", or "D".
6) Under “SUBJ Score” fill in the number at the top left of the front page of this booklet.
***ANSWER THESE QUESTIONS ON YOUR PARSCORE SHEET***
1. Moving from point B to point A, right and down the
(curved) demand curve shown on the right, the price
elasticity of demand...
a. increases.
b. decreases.
c. remains constant.
d. cannot be discerned from the information given.
2. The figure at right depicts three demand curves,
which are parallel straight lines. At quantity Q0,
which demand curve has the highest price elasticity
of demand?
a. Demand curve A.
b. Demand curve B.
c. Demand curve C.
d. They all have the same elasticity at Q0.
e. It is impossible to tell, given the information
here.
Q
C
B
A
P
Q0
P
Q
A
B
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Version A: Page 3 of 13
3. Consider two sources of pollution: Source 1 and Source 2. (Think of two countries
emitting greenhouse gases, or two neighboring electric power plants emitting sulfur.)
Both sources are currently emitting 10,000 tons of pollution.
The marginal abatement costs for each source are as follows:
MAC1 = 1/3 × A1
MAC2 = 2/3 × A2
Suppose we issue each plant permits of 9100 tons. Each would have to abate by 900 tons
to meet their allotted permits. But suppose we also allow them to buy and sell permits
from each other ("cap and trade").
In the efficient outcome, which source buys permits from the other?
a. Source 1 buys permits from Source 2.
b. Source 2 buys permits from Source 1.
c. Neither, they both emit 9100 tons.
4. In the scenario above, where the two sources trade permits, what is the marginal
abatement cost for Source 1? (MAC1 = ____?)
a. $300
b. $400
c. $450
d. $500
e. $900
5. In the scenario above, what would be the deadweight loss from not allowing the firms to
trade permits, requiring each to abate by 900 tons?
a. $15,000
b. $20,000
c. $30,000
d. $40,000
e. $45,000
6. Economists primary objection to monopolies is that....
a. monopoly profits go to rich people.
b. monopolies overproduce to maximize profits.
c. monopolies have no supply curve.
d. monopolies underproduce to maximize profits.
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Document Summary

Until the instructor tells you to do so. Please read and sign the following statement: "in keeping with the georgetown honor. System, i assure that this exam is the product of my own work, that i will not make use of unauthorized resources or collaborate with any other student. " (signature) _________________________________ Please write your name and gu id carefully and legibly at the top of this page. You have 2 hours to complete the exam. All answers are to be recorded on the parscore sheet. No work in this booklet will be assessed. You may refer to one 3x5 card with your written notes and use a calculator, but you may not use any other notes or references. If you have a question during the exam, stay seated and raise your hand. When you are done: if there are fewer than 10 minutes left in the exam period, please wait patiently and quietly until the exam period is over.

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