ECON-E 201 Midterm: Microeconomics Sample Questions for Exam 2

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scarletcod845

21 Oct 2013

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Economics

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ECON-E 201

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James Self

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ECON-E 201 Full Course Notes

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Economics e201 (professor self) sample questions for exam two, fall 2013. Part one will have between 20 and 25 multiple choice questions and part two will have short answer questions. Part one (multiple choice): on your answer sheet darken in the letter of your choice for each question. You should choose the suggested answer that best completes the statement or answers the question: robinson spends all his income on mangos and bananas. Mangos cost per pound and bananas cost per pound. The marginal utility is 30 for the last pound of mangos purchased and 10 for the last pound of bananas. If incomes increase by 3 percent next year, the quantity of vacations demanded at today"s price will increase by ________ percent: 5, 3, 15, 5/3, you are the new vice president in charge of advertising at taco bell.

Related Questions

AEC 316 - Agricultural Marketing
Homework Assignment 2: Chapter 2

Name:____________________ Date:____________________

Multiple choice questions.

There is only one correct answer in multiple choice questions. Please, mark the correct

answer. Each multiple choice question is worth 5 points.

1. A perfectly competitive firmâs demand curve equals its:

Marginal cost curve

Average variable cost curve

Average fixed cost curve

Average revenue curve

None of the above

2. A perfectly competitive firm maximizes profits by setting price equal to:

a. Marginal cost

b. Marginal revenue

c. Average revenue

d. Average total cost

e. Average variable cost

3. In order for a monopoly to continue to be a monopoly:

a. The marginal revenue curve must be downward sloping

b. There must be no close substitutes

c. Marginal revenue must equal marginal costs

d. Average total costs must be decreasing

e. None of the above

4. Marketing strategy which involves dividing a broad target market into subsets of consumers who have, or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them.

a. Brand name

b. Minor ingredients

c. Market segmentation

d. Product features

e. Packaging

5. What characteristic is indicative of oligopolies?

Low profits

Interdependence of firms

Many firms

Entry is blocked

None of the above

6. At an equilibrium price:

a.The self-interest of consumers is maximized

b.Supply equals demand

c.There is an upward pressure on price

d.There is a downward pressure on price

None of the above

7. When both supply and demand increase, equilibrium quantity will:

a.Decrease

b.Increase

Stay the same

Canât say

None of the above

8. Elasticity is a concept that deals with:

a.Market structure

b.Market equilibrium

c.Perfect competition

d.Consumer and producer sensitivity to changes in prices and income

None of the above

9. A set of competing firms producing similar products or a commodity in a market is called a(n) ___ .

a.Branch

b.Competition

c.Channel

Industry

None of the above

10. A market structure where there is only one buyer of a specific product is called:

a.Monopsony

b.Monopoly

c.Oligopsony

Monopsonistic competition

None of the above

Essay question: 50 points

11. Use the agricultural commodity that you selected in Chapter 1 and choose one agribusiness that buys it. Investigate the agribusiness using the Internet and other resources, and then write an essay addressing all or as many as possible of the following aspects of the agribusiness:

Size

Sales

Scope of product line

Worth (if public)

Number of employees

Locations globally

Market structure

Industry sector

All your answers/discussion should be typed in one essay that is at least 15 lines long (using formal English, correct paragraph and sentence structure, and making sure your ideas flow well from one sentence to another) using Times New Roman, 12 point, double space and 1-inch margins all around. Before submitting the final essay, use the âSpelling & Grammarâ function of the MS Word to correct grammar.

At the end of your essay, provide the full citation record in alphabetical order in your list of references. For examples, visit: http://www.saea.org/wp-content/uploads/2013/08/reference-style-sheet.pdf. Please, note that the list of references does not count toward the minimum required 15 lines. Include your references in the text as â(Smith, 2015)â when citing at the end of a sentence, or âAccording to Smith (2015)â when citing at the beginning of a sentence. For example,

Negative publicity is a key determinant affecting consumersâ buying decisions (Ahluwalia, Burnkrant, and Unnava, 2000).

According to Cawley and Rizzo (2005), pharmaceutical products in the same therapeutic class experienced negative spillover in terms of lost sales.

Note: Most of the future essay questions will build on this essay question and/or the one agricultural commodity that you choose. This means that if there is little information on the agricultural commodity that you have chosen for this essay question, you should consider choosing a more common agricultural commodity on which ample information is available. In addition, this course will require you to compile all your answers to the essay questions into one term paper to be submitted by the end of the course. This means that the more effort you put into answering essay questions now, the more material you will have accumulated for your term paper by the end of the semester.

TYPE YOUR ANSWER TO THE ESSAY QUESTION 11 BELOW USING AS MUCH SPACE AS YOU NEED. THEN, PRINT THE HOMEWORK ASSIGNMENT AND SUBMIT THE HARD COPY.

Economics is nothing more than the study of scarcity and choice. It's called the Economizing Problem.

Economics is also the study of human action---why people make the choices they do.

We have finite (limited) resources and infinite (unlimited) demand for goods and services. We must, therefore, use rational decisions as to how to allocate these resources so that we can produce the goods and services that satisfy as many needs and wants as possible.

Needs are those things that make life possible---food, clothing, shelter, etc. Wants are the things that make life easier---glass in windows, carpet on the floor, a refrigerator to keep your beer cold, etc.

The resources we are trying to use wisely are not confined to money. We are talking about talent, ability, drive, ambition, etc. We can't all be brain surgeons. Nor would most of us want to be. We have different needs and wants that drive our ambitions. I have 5 grandchildren. The oldest two are twins---a boy and a girl. My granddaughter graduated from Idaho University with a bachelor's and a master's degree in accounting in 5 years. She passed the CPA exam on the first try. She now lives in Panama and works for BMW. She speaks, reads, and writes 4 languages, including English. Her brother finally graduated from the University of Arkansas in May 2016 after 8 years! Why did it happen this way?? They were raised the same way by the same parents. Why was my granddaughter drove to succeed and my grandson so listless?

Then there is subjective valuation and opportunity cost. Opportunity cost is nothing more than what you have to give up to do something else. Some of you might have to roll out of the bar or the party a little before you wanted to leave just to be able to attend my class. You might also have to give up some precious sleep. In any event, you had to give up something to attend my class. That's the opportunity cost. Remember, everything you do has a price (opportunity cost) that must be paid according to Harry Browne who wrote, How I Found Freedom in an Unfree World.) To do one thing you must give up the opportunity to do something else.

When people decide to buy a product or service they must decide if it will satisfy a need or want at a price they are willing to pay. The number one reason that people buy the products or services they do is called Personal Tastes or Preferences (Subjective valuation). Everyone has a different price they are willing to pay for the same product or service. Something is only worth what someone is willing to pay for it. That's a subjective valuation. Each of us has a different intensity of demand for the same products. Things you want I may not care for at all, and the opposite may also be true. This is why there is such a variety of goods and services offered on the market.

Subjective valuation is also fluid. As your income goes either up or down it changes your valuation of products and services. Have you ever wanted something so bad you would do almost anything to get it---an i phone or I pad?---but once you get the money you think, "do I really want this?' and you don't buy it. This is common. If it were not for a subjective valuation we would all be wearing the same style and color clothes and living in similar houses, etc. Wouldn't that be a wonderful world! I'd find the tallest building in downtown Orlando and see if I could fly! It is not the similarity in people that interests me. It's the differences. It's my desire not to be like everyone else that has driven my life. Don't strive to be someone else. Strive to find and be yourself. God save me from a terminal case of conventional wisdom!

There are 5 embedded questions.

Give me an example of subjective valuation.

salmoneel837

Microeconomics Multiple choice questions. Please answer all the questions.

1. Scarcity:
A. exists because resources are limited while human wants are unlimited.
B. means we are unable to have as much as we would like to have.
C. will likely be eliminated as technology continues to expand.
D. is not an issue addressed in economics.

2. People are forced to make choices because of:
A. unlimited wants and unlimited resources.
B. limited wants and unlimited resources.
C. unlimited wants and limited resources.
D. limited wants and limited resources.
E. irrational wants and limited resources.

3. Which of the following is closest to the definition of capital?
A. c and e.
B. c and d.
C. Tools, equipment, means of transportation
D. Factories and machinery.
E. Borrowed money.

4. Which one of the following is the most accurate definition of economics?
A. Economics is the study of stocks and bonds.
B. Economics is the study of how people allocate unlimited resources.
C. Economics is the study of how consumers choose to spend their income.
D. Economics is the study of how society chooses to allocate scarce resources.

5. The basic difference between macroeconomics and microeconomics is:
A. microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade.
B. microeconomics concentrates on the behavior of individual consumers while macroeconomics focuses on the behavior of firms.
C. microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.
D. microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment.

6. Which of the following is not a resource?
A. Land.
B. Labor.
C. Money.
D. Capital.

7. Which of the following would an economist classify as capital?
A. 100 shares of Microsoft stock.
B. $50 bill.
C. credit card.
D. lawyer's personal computer.

8. Economics, according to its definition, studies how people:
A. earn and spend money.
B. invest in the stock and bond markets.
C. make choices in the face of scarcity.
D. supply goods in response to demand.

9. Which of the following is the best example of a microeconomic topic?
A. The impact that the money supply has on inflation.
B. The reasons for increases in the price of soft drinks.
C. The effect that federal budget deficits have on the interest rate.
D. The tradeoff between inflation and unemployment.

10. Which of the following is a macroeconomics topic?
A. Wages of textile workers in the Northeast.
B. The cost of producing 10,000 bookcases.
C. The economy's annual growth rate.
D. National demand for fish.
E. Effects of farm subsidies on food prices.

11. An economic theory claims that a rise in gasoline prices will cause gasoline purchases to fall, Ceteris paribus. The phrase "Ceteris paribus" means that:
A. other relevant factors like consumer incomes must be held constant.
B. the gasoline prices must first be adjusted for inflation.
C. the theory is widely accepted but cannot be accurately tested.
D. consumers' need for gasoline remains the same regardless of the price.

12. An economic model is:
A. a plastic scaled version of the economy.
B. a complete depiction of reality.
C. an abstraction from reality.
D. applicable to consumer behavior but not to producer behavior.
E. not an accepted tool of the economics profession.

13. Which of the following sayings best reflects the concept of opportunity cost?
A. "You can't teach an old dog new tricks."
B. "There is no such thing as a free lunch."
C. "I have a baker's dozen."
D. "There's no business like show business."

14. The opportunity cost of watching television is:
A. all of the alternative programs that appear on other stations.
B. zero because there is no money expenditure involved.
C. the alternative use of the time foregone by watching the program.
D. zero if it benefits you.

15. Which of the following does not illustrate opportunity cost?
A. If I study, I must give up going to the football game.
B. If I buy a computer, I must do without a 35" television.
C. More consumer spending now means more spending in the future.
D. If I spend more on clothes, I must spend less on food.

16. When deciding whether to buy a second car, marginal analysis indicates that the purchaser should compare the:
A. benefits expected from two cars with the cost of both.
B. additional benefits expected from a second car with the cost of the two cars.
C. dollar cost of the two cars with the potential income that the cars will generate.
D. additional benefits of the second car with the additional cost of the second car.

17. According to marginal analysis, you should spend more time studying economics if the extra benefit from an additional hour of study:
A. is positive.
B. outweighs the extra cost.
C. exceeds the benefits of the previous hour of study.
D. will raise your exam score.

ECON-E 201 Midterm: Microeconomics Sample Questions for Exam 2

ECON-E 201 Full Course Notes

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