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UW-Madison ECON 101 - Midterm Exam

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a. subsidyb. support10. Total consumer surplus is defined as the sum of16. Suppose the market for soft drinks is competitive. Which of the following will cause the equilibrium quantity of soft drinks sold to decrease?17. Which of the following is considered both an opportunity cost and an accounting cost of attending college?a. Food Expensesb. Housing Expensesc. Text booksd. Foregone salaries19. Suppose the following two events happen simultaneously:20. The equation Ax + By = C expresses a linear relationship between variables x and y. A, B, and C are constants. (Assume that B ≠ 0.) On a graph with x on the horizontal axis and y on the vertical axis, what is the slope of this line?21. The UW Lacrosse Club plays a game of lacrosse every Thursday night. The fee a player must pay in order to participate in each game is $10. Troy is thinking about playing this Thursday. Troy is also considering other alternative uses of his time including the following two possibilities: 22. What is happening to the opportunity cost of producing more bicycles as we move from point D to point B?23. Currently, Wonderland is producing at point D. The opportunity cost of producing one more computer is ; the opportunity cost of producing one more bicycle is _______.24. The news last night reported a huge earthquake in the North Sea, near England. Several important offshore oilfields are located nearby, but details about the damages have not been confirmed. As a Futures Broker on Wall Street, what would you expect this morning?25. An excise tax imposed in this competitive market for textbooks willa. increase the equilibrium quantity as well as the equilibrium price.26. An excise tax of $2.00 per book is levied on book producers. What is the equilibrium price after the tax is imposed? What is the net price received by producers?30. What is the equilibrium price of red t-shirts in Wisconsin assuming that the market for red t-shirts in Wisconsin is a closed market (i.e., there is no trade with other states or other countries in this market)?31. Suppose that the price of red t-shirts in Minnesota is P = $5. If the State of Wisconsin starts to trade with Minnesota, then how many red t-shirts would Wisconsin import?Suppose the market for eggs is competitive. In this market, egg farmers are producers and grocery shoppers are consumers. The demand and supply curves in the market for eggs can be expressed as follows:32. The equilibrium price for a gross of eggs is33. The total consumer surplus in this market is 34. Suppose that the government intervenes in the market and buys 25 million gross of eggs. What is the price floor for eggs?a. $6b. $12c. $18d. $2035. Suppose supply decreases by 2 units at each price level, what is the new supply function?a. P = Qs/2 or Qs = 2Pb. P = Qs/2 + 4 or Qs = 2P c. P = Qs/2 + 3 or Qs = 2P d. P = Qs/2 + 1 or Qs = 2P 37. (Warning: this is a challenging question.) One day, OPEC decides to impose a quota of 3 in order to reduce CO2 emissions. That is, they only supply 3 units of oil at most, no matter how high the demand is. How much is the deadweight loss associated with this quota?Economics 101 Student Name : 10/07/2009 Section # : First Midterm TA Name :Version XDO NOT BEGIN WORKING UNTIL THE INSTRUCTOR TELLS YOU TO DO SO.READ THESE INSTRUCTIONS FIRST.You have 75 minutes to complete the exam. The exam consists of 13 binary choice questions and 24multiple choice questions. Each binary choice question is worth 2 points, and each multiple choicequestion is worth 3 points. You will get 2 point for filling in your name, student ID number, number ofthe discussion section that you are enrolled in, and version number correctly. Please answer allquestions on the scantron sheet with a #2 pencil. No cell phones, calculators, or formula sheets are allowed. PICK THE BEST ANSWER FOR EACH QUESTION. How to fill in the scantron sheet: 1. Print your last name, first name, and middle initial in the spaces marked "Last Name," "FirstName," -, and "MI." Fill in the corresponding bubbles below. 2. Print your student ID number in the space marked "Identification Number." Fill in the bubbles. 3. Write the number of the discussion section you are enrolled in under "Special Codes" spacesABC, and fill in the bubbles. You can find the discussion numbers below on this page. 4. Write the version number of your exam booklet under "Special Codes" space D, and fill in thebubble. The version number is on the top of this page. Other Instructions:1. If there is an error on the exam or you do not understand something, make a note on your exambooklet and the issue will be addressed AFTER the examination is complete. No questionsregarding the exam can be addressed while the exam is being administered. 2. When you are finished, please get up quietly and bring your scantron sheet and this exambooklet to the place indicated by the instructors. Discussion sections are as follows:Atsuko Tanaka 363 2:25 F 53 BASCOM370 3:30 F 6310 SOC SCIJiabin Wu360 8:50 F 52 BASCOM357 11:00 F 286 VAN HISE358 12:05 F 52 BASCOM364 13:20 F 222 INGRAHAMHeewoo (Hugh) Kang366 8:50 F 214 INGRAHAM373 9:55 F B337 VAN VLECK361 13:20 F 116 INGRAHAM362 14:25 F 123 INGRAHAMDrew Anderson371 9:55 F 475 VAN HISE356 11:00 F 290 VAN HISE359 12:05 F 115 INGRAHAM372 15:30 F 6224 SOC SCI Young Wook Lee367 8:50 F 122 INGRAHAM374 12:05 F 123 INGRAHAM365 13:20 F 120 INGRAHAMWork sheet:2I. Binary Choice Questions: (Worth 2 points each)1. Consider the statement “The macroeconomy is in a recession”. a. This statement is a positive statement. b. This statement is a normative statement. Use the following information to answer the next two (2) questions.Analyze the market for Cinnamon Toast Crunch Cereal. Assume in the market forCinnamon Toast Crunch Cereal that the demand curve is downward sloping the supplycurve is upward sloping. 2. Frosted Flakes is a substitute for Cinnamon Toast Crunch Cereal. The demand curvefor Frosted Flakes is downward sloping. If the price of milled corn, the number oneingredient in Frosted Flakes (but not an ingredient used for Cinnamon Toast CrunchCereal) decreases, then the equilibrium price of Cinnamon Toast Crunch Cereala. increases.b. decreases.3. Cows throughout the United States contract a rare disease carried


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UW-Madison ECON 101 - Midterm Exam

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