UA EC 110 - Exam 2 Sample Test (11 pages)

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Exam 2 Sample Test



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Exam 2 Sample Test

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Pages:
11
School:
University of Alabama
Course:
Ec 110 - Prin of Microeconomics
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Principles of Microeconomics EC 110 Exam 2 IMPORTANT INSTRUCTIONS 1 WRITE YOUR NAME STUDENT NUMBER YOUR ROW AND SEAT NUMBER ON THIS TEST OR IT WILL NOT BE RETURNED TO YOU 2 WRITE YOUR NAME STUDENT NUMBER AND VERSION NUMBER ON THE SCANTRON 3 WRITE THE COLOR OF YOUR QUIZ AT THE TOP OF THE SCANTRON NAME STUDENT NUMBER ROW SEAT Multiple Choice Identify the letter of the choice that best completes the statement or answers the question 1 A legal maximum price at which a good can be sold is a price a floor b stabilization c support d ceiling 2 Suppose Lauren Leslie and Lydia all purchase bulletin boards for their rooms for 15 each Lauren s willingness to pay was 35 Leslie s willingness to pay was 25 and Lydia s willingness to pay was 30 Total consumer surplus for these three would be a 15 b 30 c 45 d 90 3 When a good is taxed a both buyers and sellers of the good are made worse off b only buyers are made worse off because they ultimately bear the burden of the tax c only sellers are made worse off because the government holds them responsible for sending in the tax payments d neither buyers nor sellers are made worse off since tax revenue is used to provide goods and services that would otherwise not be provided in a market economy 4 The price elasticity of demand measures a buyers responsiveness to a change in the price of a good b the extent to which demand increases as additional buyers enter the market c how much more of a good consumers will demand when incomes rise d the movement along a supply curve when there is a change in demand 5 Refer to the figure above The amount of tax revenue received by the government is equal to the area a P3 A C P1 b A B C c P2 D A P3 d P1 C D P2 6 Two goods are complements if a decrease in the price of one good a decreases the quantity demanded of the other good b decreases the demand for the other good c increases the quantity demanded of the other good d increases the demand for the other good 7 Consumer surplus a is the amount of a good that a consumer can buy at a price below equilibrium price b is the difference between the amount that the consumer is willing to pay for the good and the amount that a consumer actually pays for a good c is the number of consumers who are excluded from a market because of scarcity d measures how much a buyer values a good 8 A competitive market is a market in which a an auctioneer helps set prices and arrange sales b there are only a few sellers c the forces of supply and demand do not apply d no individual buyer or seller has any significant impact on the market price 9 Technological advancements has resulted in lower prices and an increase in the sale of digital cameras What is the impact of this event in the market for inkjet digital photo printers a The supply curve for inkjet digital photo printers shifts to the left b The supply curve for inkjet digital photo printers shifts to the right c The demand curve for inkjet digital photo printers shifts to the left d The demand curve for inkjet digital photo printers shifts to the right 10 Suppose a tax is imposed on the buyers of a good or service The burden of the tax will generally fall a entirely on the buyers b entirely on the sellers c entirely on the government d on both the buyers and the sellers 11 Refer to the figure above Which area represents the increase in consumer surplus when the price falls from P1 to P 2 a ABD b BDCE c DEF d BCFD The table shows individual demand schedules for a market Price of the Good 0 00 0 50 1 00 1 50 2 00 2 50 Aaron 20 18 14 12 6 0 Angela 16 12 10 8 6 4 Austin 4 6 2 0 0 0 Alyssa 8 6 5 4 2 0 12 Refer to the table above When the price of the good is 1 00 the quantity demanded in this market would be a 42 units b 31 units c 24 units d 14 units 13 The case of perfectly elastic demand is illustrated by a demand curve that is a vertical b horizontal c downward sloping but relatively steep d downward sloping but relatively flat 14 Refer to the figure above The effective price that buyers pay after the tax is imposed is a 8 b 6 c 5 d 3 15 Refer to figure above The amount of the tax per unit is a 1 b 2 c 3 d 5 16 Sellers of a product will bear the larger part of the tax burden and buyers will bear a smaller part of the tax burden when a the tax is placed on the sellers of the product b the tax is placed on the buyers of the product c the supply of the product is more elastic than the demand for the product d the demand for the product is more elastic than the supply of the product 17 The cross price elasticity of demand can tell us whether goods are a normal or inferior b elastic or inelastic c luxuries or necessities d complements or substitutes 18 Income elasticity of demand measures how a the demand for a good changes as consumer income changes b consumer purchasing power is affected by a change in the price of a good c the price of a good is affected when there is a change in consumer income d many units of a good a consumer can buy given a certain income level The domestic country is Jamaica 19 Refer to the figure above With trade Jamaica a imports 150 calculators b imports 250 calculators c exports 100 calculators d exports 250 calculators 20 Refer to the figure above If the government imposes a price ceiling of 8 in this market the result would be a a surplus of 20 b surplus of 40 c shortage of 20 d shortage of 40 21 When there is a technological advance in the ice cream industry consumer surplus in that market will a increase b decrease c not change since technology affects producers and not consumers d not change since consumers willingness to pay is unaffected by the technological advance 22 A movement along the supply curve might be caused by a change in a technology b input prices c expectations about future prices d the price of the good or service that is being supplied 23 A person who takes a prescription drug to control high cholesterol most likely has a demand for that drug that is a inelastic b unit elastic c elastic d highly responsive to changes in income 24 The internet has created a new and fast growing category …


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