1Economics 101 – Lec 3 Student Name: ____________________ Elizabeth Kelly ID Number: ______________________ Fall 2000 Section Number: __________________ Midterm #1 / Version #1 TA Name: ________________________ October 2, 2000 VERSION 1 DO NOT BEGIN WORKING UNTIL THE INSTRUCTOR TELLS YOU TO DO SO. READ THESE INSTRUCTIONS FIRST. You have the class period of 50 minutes to complete the exam. The exam consists of three parts: 5 true/false questions, 12 multiple choice questions, and 1 problem. Each true/false question is worth 2 points for a total of 10 points, each multiple choice question is worth 3 points for a total of 36 points, and the problem is worth 14 points. Please answer all true/false questions and multiple choice questions on the coding sheet with a #2 pencil. Choose the best answer. Answer the problem on the exam booklet. Please make sure you write legibly and are clear about the solution to the problem. No calculators are allowed. Please fill out the blanks at the top of the exam booklet. There are 8 pages in this exam booklet. How to fill in the coding sheet: 1. Print your last name, first name, and middle initial in the spaces marked “Last Name,” “First Name,” and “MI.” Fill in the corresponding bubbles below. 2. Print your student ID number in the space marked “Identification Number.” Fill in the corresponding bubbles below. 3. Write your discussion section number under “Special Codes” spaces ABC, and fill in the bubbles. You can find the discussion numbers below on this page. 4. Write your version number under “Special Codes” space D, and fill in the bubble. • If you have any questions during the exam, stay seated and raise your hand. • When you are finished, please get up quietly and bring your code sheet and this exam booklet to the place indicated by the instructors. DISCUSSION SECTIONS: Disc 381 9:55W 215 Ingraham Oya Ardic Disc 390 2:25R 6228 Soc Sci Seungmoon Choi Disc 382 11:00W 115 Ingraham Oya Ardic Disc 391 3:30R 1412 Sterling Seungmoon Choi Disc 383 12:05W 6102 Soc Sci Tsung-Sheng Tsai Disc 392 9:55F B333 Van Vleck Seungmoon Choi Disc 384 1:20W 6310 Soc Sci Tsung-Sheng Tsai Disc 393 9:55F 122 Ingraham Tsung-sheng Tsai Disc 385 2:25W 55 Bascom Zhonghua Wu Disc 395 12:05F B129 Van Vleck Seungmoon Choi Disc 386 3:30W 6314 Soc Sci Zhonghua Wu Disc 396 11:00F 14 Ingraham Seungmoon Choi Disc 387 11:00R 6322 Soc Sci Zhonghua Wu Disc 397 11:00F B305 Van Vleck Tsung-Sheng Tsai Disc 389 12:05R 114 Ingraham Zhonghua Wu Disc 398 12:05F 23 Ingraham Tsung-Sheng Tsai2PART I: TRUE/FALSE QUESTIONS (2 points each: Allow 5 minutes) On the coding sheet, darken choice A if you think the statement is TRUE, and darken choice B if you think the statement is FALSE. Question 1: Microeconomics focuses on the determination of issues like unemployment, inflation, and interest rate. A. True B. False Question 2: It is meaningful to make a comparison between Japanese GDP and German GDP. A. True B. False Question 3: Imagine a world of two countries that have the same resources. Each country can produce only two goods: apples and oranges using different technologies. Assume that the PPFs for both countries are linear. In this world, it is possible that neither country will have a comparative advantage in the production of either of the goods. A. True B. False Question 4: Consider the market for cassette tapes (tape is a normal good). If the price of a cassette player rises and tape production technology is improved, then the price of tapes will go down and the quantity of tapes purchased will increase. A. True B. False Question 5: If the market price is below the equilibrium price, there will be an excess supply and the market price will rise. A. True B. False3PART II: MULTIPLE CHOICE QUESTIONS (3 points each: Allow 24 minutes) Use the following information to answer questions 6 and 7. The following table describes the production possibilities for some country: Plan PCs (in millions) Cars (in millions) V 0 120 W 40 110 X 80 85 Y 120 50 Z 160 0 Question 6: Which of the following statements is a FALSE statement? A. Plan V, which requires no PCs to be produced, is an efficient plan of production. B. The combination of production of 70 PCs and 70 Cars is a feasible plan. C. The opportunity cost of moving from plan V to plan X is 80 PCs AND 35 Cars. D. The opportunity cost of moving from plan Z to plan Y is 40 PCs. E. This PPF satisfies the principle of increasing opportunity cost. Question 7: Which of the following statements is the BEST description about the “movement” from plan X to plan Y? A. A hail storm damages cars. B. The GDP of this country has been increasing. C. There is a new technology developed in producing PCs. D. We are observing data from different years. E. Since they are both feasible plans, this is not really a movement, but rather a comparison between different production plans. Question 8: Tom makes $20 an hour as a clerk. He must take 2 hours off work (without pay) to go to the dentist to have a tooth pulled. The dentist charges $100. What is the entire opportunity cost of Tom’s visit to the dentist? A. $20 B. $40 C. $100 D. $120 E. $1404Question 9: One reason that economists so often disagree is: A. They are influenced by the public. B. Economists can never predict real world results. C. Economists often have different visions of what the ideal economy should achieve. D. Each faction knows that they are the ones with all the facts. E. Economics is too complicated to understand. Question 10: Which of the following will shift the supply curve for good X to the left? A. A fall in the wages of workers who produce good X B. A shortage in X C. Innovations that increase the efficiency of the production technology for good X D. An increase in the cost of equipment used in the production of good X E. A surplus in X Question 11: What will happen in the market for American-style restaurants (burger places) if the wages of burger chefs go up and the number of Chinese restaurants increases? Relative to the initial equilibrium, A. The equilibrium price of the American-style meals will increase, but the impact on the quantity of meals sold will be ambiguous. B. The equilibrium price of American-style meals will increase, and the quantity of meals sold will decrease. C. Both the
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