READ THESE INSTRUCTIONS FIRST.Economics 101 – Principles of Microeconomics Student Name: _______________________________ Korinna K. Hansen Section No: _________________________________ Fall 2019 – First Midterm TA:_____________________________________ Version 1 DO NOT BEGIN WORKING UNTIL THE INSTRUCTOR TELLS YOU TO DO SO. READ THESE INSTRUCTIONS FIRST. You have 75 minutes to complete this exam. This exam consists of 33 multiple-choice questions. Each question is worth 3 points. Choose the best answer for each question. Please answer all questions on the scantron sheet you are given using a #2 pencil. You will receive 1 BONUS point for filling out the scantron sheet properly. If there is an error on the exam or you do not understand something, make a note on your exam booklet and we will address this issue after this examination is complete. You cannot ask any questions about the exam while the exam is administered. When you are finished, please bring both the scantron sheet and this exam booklet to the place indicated by the instructors. NO CELLPHONES, CALCULATORS, ELECTRONICS, FORMULA SHEETS ARE ALLOWED. CHOOSE THE BEST ANSWER FOR EACH QUESTION. GOOD LUCK! How to fill out the scantron 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 bubbles. 3. Write the number of the discussion section you are registered for under “Special Codes” spaces ABC, and fill in the bubbles. For Discussion sections see the bottom section of this page. 4. Write the version number of your exam booklet under “Special Codes” space D, and fill in the bubble. The version number is on the top of this page. Lecture 1 – Morning Lecture Discussions Allie Greenman John Lazzarro Zau Aitkulova Manisha Jain Qin Lin 301 – R 3:30 302 – F 2:25 308 – F 08:50 313 – F 8:50 306 – R 4:35 305 – F 12:05 303 – F 1:20 309 – F 11:00 314 – F 1:20 312 – F 9:55 307 – F 11:00 304 – F 12:05 316 – F 9:55 315 – F 2:25 311 – F 9:55 310 – F 11:00 318 – R 4:35 317 – F 1:20 Lecture 2 – Afternoon Lecture Discussions Ilia Jonathon Laura Soojeong Xinyi 344 – F 08:50 345 – R 04:35 331 – F 08:50 336 – F 11:00 332 – R 04:35 342 – F 09:55 334 – F 01:20 335 – F 09:55 339 – F 12:05 330 – F 08:50 343 – F 11:00 337 – F 02:25 346 – F 01:20 338 – F 09:55 341 – F 12:05 347 – F 03:30 340 – F 02:25 333 – F 01:201. Which of the following statements is true? a. Absolute advantage determines specialization. b. Comparative advantage determines specialization. c. Specialization can be determined by both absolute and comparative advantage. d. All of the statements above are false. 2. Mary, Christian, and Lucas can either make chairs or tables. The table below shows how long (in hours) it takes to make one chair and one table. Who has the comparative advantage in making tables? a. Mary b. Christian c. Lucus d. Mary and Christian both have the same opportunity cost.Use the following information for the next THREE (3) question. Skyler and Kimberly are dairy farmers that can produce either milk or butter. The following table shows the total level number of pounds they can produce of both butter and milk in a day. 3. Who has the absolute advantage in producing butter and has the absolute advantage in milk, respectively? a. Butter: Skyler, Milk: Skyler b. Butter: Kimberly, Milk: Skyler c. Butter: Kimberly, Milk: Kimberly d. Butter: Skyler, Milk: Kimberly 4. Who has the comparative advantage in butter? a. Skyler b. Kimberly c. Neither, they both have the same opportunity cost d. None of the above 5. Who should specialize in butter? a. Skyler b. Kimberly c. It does not matter who specializes. d. Not enough information is provided to answer the question.6. Suppose little Anne can either read 6 short stories (S) or bake 18 bread (B) in one day. Which of the following statements is NOT true? a. Equation for her PPF will be B = 18 – 3S. b. Reading 3 short stories and baking 12 breads is feasible for Anne. c. Opportunity cost of reading one short story for Anne is baking 3 breads. d. Reading 4 short stories and baking 6 breads is efficient. Use the following graph of a certain Production Possibility Frontier to answer the next question: 7. The opportunity cost of apples between A and B is _______ , and the opportunity cost of apples between B and C is _______ . a. increasing, increasing b. decreasing, decreasing c. increasing, decreasing d. decreasing, increasing ABCDEQ. CherriesQ. ApplesABCDEABCDEQ. CherriesQ. Apples8. Suppose widgets and gadgets are substitutes, but gadgets are required as an input to the production of widgets. Suppose the price of gadgets increases. Given this information and holding everything else constant, how does this affect the equilibrium price and quantity of widgets? Relative to the initial equilibrium price and equilibrium quantity of widgets a. The equilibrium price of widgets decreases, and the equilibrium quantity of widgets increases. b. The equilibrium price of widgets increases, and the equilibrium quantity of widgets is indeterminate. c. The equilibrium price of widgets is indeterminate, and the equilibrium quantity of widgets increases. d. The equilibrium price of widgets increases, and the equilibrium quantity of widgets decreases.Use the following information to answer the next THREE (3) questions. In the market for corn, consumers and producers are willing to buy and sell the following quantities (Q) in these prices (P): Price Quantity Supplied Quantity Demanded 20 0 40 30 5 35 40 10 30 50 15 25 9. Which of the following equations describe the supply and demand curves in this market? 1) Supply: P=2Q; Demand: P=100-2Q 2) Supply: P=20+2Q; Demand: P=50-Q 3) Supply: P=20+2Q; Demand: P=100-2Q 4) Supply: P=20+Q; Demand: P=20-Q 10. What is the equilibrium price and quantity in this market for corn? 1) P=60; Q=20 2) P=40; Q=20 3) P=60; Q=30 4) P=40; Q=30 11. The winter has been extremely cold, resulting in substantial damages to crops. As a result, what will happen to consumer surplus in the new equilibrium? 1) Consumer
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