Economics 101 Name _____________________________Fall 2011 TA Name __________________________10/18/11 Discussion Section #_________________First Midterm Student ID # _______________________Version 1DO NOT BEGIN WORKING UNTIL THE INSTRUCTOR TELLS YOU TO DO SOREAD THESE INSTRUCTIONS FIRSTYou have 75 minutes to complete the exam. The exam consists of 33 multiple choice questions.Each question is worth 3 points. You will receive an additional 1 point for filling in the scantron sheet andexam booklet completely and accurately for a total of 100 points. · Answer all questions on the scantron sheet with a #2 pencil · Pick the best answer for each question. If there is an error on the examor you do not understand something, make a note on your exambooklet and the issue will be addressed AFTER the examination iscomplete. No questions regarding the exam can be addressed whilethe exam is being administered.· When you are finished, please get up quietly and bring your scantronsheet and this exam booklet to the place indicated by the instructors.NO CELL PHONES, CALCUATORS, OR FORMULA SHEETS ARE ALLOWEDHow 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’ve been attending 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. Discussion sections are as follows: Patricia Abbott IrinaMerkurievaNelson RamirezRondanDis 332 Fr 08:50 Dis 330 Th03:30Dis 336 Fr 11:00Dis 335 Fr 01:20 Dis 333 Th04:35Dis 339 Fr 12:05Dis 337 Fr 02:25 Dis 342 Fr 09:55Dis 338 Fr 12:05 Dis 346 Fr 08:50Kegon TanRyan VeigaDis 334 Fr 01:20 Dis 331 Th03:30Dis 340 Fr 02:25 Dis 343 Fr11:00Dis 341 Fr 04:35 Dis 345 Fr09:55Dis 347 Fr08:50Work SheetI, __________________________________, agree to neither give nor receive any help onthis exam from other students. Furthermore, I understand that use of a calculator isan academic misconduct violation on this exam.Signed ____________________________________QUESTIONS1. A man has $10,000 in his pocket. He could use it to buy a piece of gold and sell it after two years for$10,500. Alternatively, he could put money in a bank for two years and earn 2% a year on the fundshe has deposited in the bank. Assume that the man will keep all funds in the bank the entire twoyears. Comparing the two options available to this man, what is the difference in his returns after 2years?a. $0b. $100c. $404d. $962. Suppose a freeze in Econland wipes out 20 percent of the orange crop. Simultaneously there is ahuge increase in the number of international students this year, and each new student needs to buyoranges. In the market of Econland oranges, the new equilibrium price __________, and the newequilibrium quantity _________. a. Cannot be determined, will decreaseb. Will decrease, cannot be determinedc. Will decrease, will increased. Will increase, cannot be determined3. Which of the following statements is an example of positive statement?a. People are not supposed to take income into consideration when planning children. b. Poor people should have fewer children.c. Rich people have more children than poor people do.d. Rich people ought to have more children. Next→4. The diagram below shows the relationship between fertility rates and gross domestic product (GDP)per person in different countries. Is this cross-sectional or time-series data? What is therelationship between the fertility rate and GDP?a. Cross sectional, inverseb. Time series, inversec. Cross sectional, directd. Time series, directNext→Use the information below to answer the next FOUR (4) questions.The domestic demand for Havarti cheese in the United States is given by Q = 50 – P, and the domesticsupply (most of it is made in Wisconsin!) is Q = –10 + 2P. The world price of Havarti cheese is $10 perpound (there is a huge production in Denmark). 5. If the free trade were allowed in this market, how many pounds of cheese would the United Statesimport? a. 30 poundsb. 35 poundsc. 40 poundsd. 50 pounds6. If the United States government were to impose a tariff of $5 per pound ofcheese, how many pounds of cheese would be imported?a. 30 poundsb. 15 poundsc. 10 poundsd. 25 pounds7. What would be the tax revenue that the US government would collect from atariff of $5 per pound of cheese? a. $5b. $25c. $50d. $758. Which of the following are true statements about how the tariff affects surplusrelative to free trade? [Hint: there is no need to calculate the surpluses.]a. Consumer surplus increases with the tariff; producer surplus decreases with the tariffb. Consumer surplus decreases with the tariff; producer surplus increases with the tariffc. Consumer surplus increases with the tariff; producer surplus decreases with the tariffd. Consumer surplus increases with the tariff; producer surplus increases with the tariffNext→9. Imagine you are a high school graduate choosing between two similarly ranked universities aftergaining admission into both (these are your two best choices). The costs of attending theseuniversities are provided in the table below. Now that the application process is over, what is theopportunity cost of going to University A?University A University BApplication fee 100 80Books 2000 2000Tuition 30000 10000Housing 20000 25000Board 15000 13000Transport 5000 2000a. Foregone wages plus $52,080b. $72,100c. $20,000d. $20,02010.Suppose an economy produces two goods: tea (T) and coffee (C). The production possibility frontierfor this economy is described by the equation: 15T - 300 = -10C. What is the horizontal interceptwhen this equation is graphed with coffee on the horizontal axis and tea on the vertical axis?a. 20b. -30c. 30d. -20Next→Use the information and graph below to answer the next TWO (2)
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