ECON 132 Study Guide - Midterm Guide: Jolla, Kilowatt Hour, Railroad Commission Of Texas
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Econ 132 (W2019): Mid Term Exam 1 [70 Points Total]
Directions: fill in answer in the blank space provided. Do NOT circle answers! Failure to follow
directions will result in point reductions.
A. FILL IN THE BLANK (May Require More Than One Word) [20 Points]
1. The UCSD economist who is well known for work on the relationship between oil price shocks and
macroeconomic behavior is: Jim Hamilton
2. A cartel for an exhaustible resource is likely to be most successful when the production by firms in the
competitive fringe is small
3. Very large quantities of “extra-heavy oil” have been discovered in: Venezuela
(A) Germany (B) Japan (C) Saudi Arabia (D) Venezuela
4. Russia is the major world economic power whose economy has suffered the most due to falling oil
5. As a result of the Black Plague in Europe regrowth of wood/tree/forest near cities occurred.
6. Recessions in the United States were started at different times when two OPEC members, Iran and
Kuwait were attacked by Iraq.
7. The key technological innovation that eventually allowed the building of small factories in most
geographic locations was eletricity
8. San Diego Gas and Electric sells electricity in places like La Jolla where it is usually cool in the summer
and desert communities where is usually hot. An economist working there estimates the following
regression model: log (KWh) = 100 + -.20 log(price) + .90*log(temperature). Is the price elasticity of
demand elastic or inelastic? Inelastic What is the elasticity of demand with respect to temperature? 0.9
9. A large oil company that was once part of Standard Oil before it was broken up in a 1911 antitrust action
are Exxon, Mobil, Chevron, Esso, Amaco
10. If a tax imposed on residential electricity increased the price paid by households by 30% and the
government observed that gasoline used for motor vehicles decreased by 2%, then the cross-price
elasticity of demand for gasoline with the price of electricity is: 0.067
11. One (blue) barrel of oil contains 42 gallons.
12. The largest oil producer among the OPEC countries is Saudi Arabia.
13. The early British government tried to tax the growing demand for light by taxing candles, but this tax
was relatively easy to evade.
14. One short ton (2000 pounds) of coal contains 25.0 million Btu. If it takes a minimum of 3412 Btu to
generate a kilowatt hour of electricity, how much electricity is generated by burning 1 short ton of coal
in a coal-fired power plant that has only 70% thermal efficiency? 5128.96
15. From 1950 to 1970 U.S. gasoline prices show little change in nominal price due to the actions of the
Texas Railroad Commission
16. The elasticity of supply is defined as the percentage change in the quantity supplied divided by the
percentage change in price. If this is a normal good would you expect this elasticity to be negative or
17. A cartel tries to act like a monopoly.
B. MULTIPLE CHOICE QUESTIONS [10 Points]
Directions: fill in answer in the blank space provided. Do NOT circle answers!
___________1. The industrial revolution in 1776 in England was spurred by what invention:
(a) gas lamps (b) railroads (c) wind mills (d) steam engine
___________2. The U.S. price elasticity of demand for gasoline over the period of a month is closest to:
(a) 0.5 (b) -0.1 (c) -0.5 (d) -1.0
___________3. As a fraction of the U.S. economy, expenditures on oil have typically been around:
(A) 1% (b) 3% (c) 10% (d) 20%
___________4. In the short run, companies that sell extract and sell natural gas try to maximize:
(a) economic reserves (b) physical reserves (c) producer surplus (d) proven reserves
___________5. If a modern electric power plant needs to burn 20,000 BTUs of natural gas to produce just
over 5 Kwh of electricity, its thermal efficiency is closest to (note: 100% efficiency occurs at 3412 BTU per
(a) 40% (b) 60% (c) 80% (d) 100%
___________6. Hubbert correctly predicted that conventional oil production in the United States would
(a) 1950 (b) 1970 (C) 2000 (d) 3000
Econ 132 (w2019): mid term exam 1 [70 points total] An economist working there estimates the following regression model: log (kwh) = 100 + -. 20 log(price) + . 90*log(temperature). 5128. 96: from 1950 to 1970 u. s. gasoline prices show little change in nominal price due to the actions of the. Texas railroad commission: the elasticity of supply is defined as the percentage change in the quantity supplied divided by the percentage change in price. If this is a normal good would you expect this elasticity to be negative or positive? positive: a cartel tries to act like a monopoly, multiple choice questions [10 points] The industrial revolution in 1776 in england was spurred by what invention: (a) gas lamps (b) railroads (c) wind mills (d) steam engine. The u. s. price elasticity of demand for gasoline over the period of a month is closest to: (a) 0. 5 (b) -0. 1 (c) -0. 5 (d) -1. 0.