Econ 202 Principles of Microeconomics Spring 2014 University of Mississippi Prof David Fragoso Gonzalez Last Name First Name ID Instructions Final Exam Practice Version TIME You have two 2 hours to complete the test No extra time will be allowed FORMAT o There are 60 multiple choice questions numbered 1 60 each worth 1 25 points for a total of 75 points o There are 5 fill in the blanks questions numbered 61 65 If you clearly identify your calculations and explain your steps you can get partial credit even if your answers are wrong These questions are worth a total of 25 points o There are no extra credit questions SCANTRON Please place your answers to the multiple choice questions on a scantron form no 16485 the Purple form which you provide Be sure to fill in your name and ID number and bubble them on your scantron CALCULATOR You may use a simple calculator with no storage function You may not use your phone as a calculator SCRAP PAPER Do not use your own scrap paper Instead use the last sheet of this booklet If you need more paper raise your hand and I will bring it to you APPEALS If you believe that a question is ambiguous that there are no correct answers for some question or that more than one answer is correct briefly state so in the lines provided below these instructions FINISH When you finish the test please return the complete test booklet and your scantron CONDUCT Please abide by the University s policy on Academic Conduct and Discipline Cheating will be severely punished GOOD LUCK Appeals 1 1 25 pts Denise decides to spend three hours working overtime rather than watching a video with her friends She earns 10 an hour Her opportunity cost of working is a the 30 she earns working b the 30 minus the enjoyment she would have received from watching the video c the enjoyment she would have received had she watched the video d nothing since she would have received less than 30 of enjoyment from the video 2 1 25 pts Consider the graph below where the production possibilities frontier for two countries Genovia and Florin is represented Which of the following is true in the a Genovia has the comparative advantage in the production of both goods b Florin has the comparative advantage production of both goods c Genovia has the comparative advantage in the production of cars while Florin has the comparative advantage in the production of electronic goods d Genovia has the comparative advantage in the production of electronic goods while Florin has the comparative advantage in the production of cars 3 1 25 pts Specialization and trade a can only occur in a country if that country has an absolute advantage in some good b allow a country to consume outside its PPF c shift the PPF to the right d shift the PPF to the left 4 1 25 pts The production possibilities frontier is used to illustrate some basic economic ideas including a scarcity b opportunity cost c economic growth d All of the above are correct 5 1 25 pts When economists make a positive statements they are speaking not as policy advisers but as scientists b positive statements they are speaking not as scientists but as forecasters c normative statements they are speaking not as policy advisers but as scientists d normative statements they are speaking not as policy advisers but as model builders 6 1 25 pts An increase in the price of a good will a increase demand b decrease demand c increase quantity demanded d decrease quantity demanded 7 1 25 pts Which of the following would shift the demand curve for gasoline to the right a a decrease in the price of gasoline b an increase in consumer income assuming gasoline is a normal good c an increase in the price of cars a complement for gasoline d a decrease in the expected future price of gasoline 8 1 25 pts If an increase in income decreases the demand for a good then the good is a n a substitute good b complementary good c normal good d inferior good 9 1 25 pts You wear either shorts or sweatpants every day You notice that sweatpants have gone on sale so your demand for a sweatpants will increase b sweatpants will decrease c shorts will increase d shorts will decrease 10 1 25 pts Holding all other things constant a higher price for ski lift tickets would a increase the number of skiers b increase the price of skis c decrease the number of skis sold d decrease the demand for other winter recreational activities 11 1 25 pts If Miguel expects to earn a higher income next month he may choose to a save more now and spend less of his current income on goods and services b save less now and spend more of his current income on goods and services c decrease his current demand for goods and services d move along his current demand curves for goods and services 12 1 25 pts The law of supply states that other things equal when the price of a good a falls the supply of the good rises b rises the quantity supplied of the good rises c rises the supply of the good falls d falls the quantity supplied of the good rises 13 1 25 pts Suppose the number of buyers in a market increases and a technological advancement occurs also What would we expect to happen in the market a Equilibrium price would decrease but the impact on equilibrium quantity would be ambiguous b Equilibrium price would increase but the impact on equilibrium quantity would be ambiguous c Equilibrium quantity would decrease but the impact on equilibrium price would be ambiguous d Equilibrium quantity would increase but the impact on equilibrium price would be ambiguous 14 1 25 Pts What would happen to the equilibrium price and quantity of latt s if the cost to produce steamed milk which is used to make latt s increased and scientists discovered that latt s cause heart attacks a Both the equilibrium price and quantity would increase b Both the equilibrium price and quantity would decrease c The equilibrium price would decrease and the effect on equilibrium quantity would be ambiguous d The equilibrium quantity would decrease and the effect on equilibrium price would be ambiguous 15 1 25 pts Goods with many close substitutes tend to have a more elastic demands b less elastic demands c price elasticities of demand that are unit elastic d income elasticities of demand that are negative 16 1 25 pts When the price of a bracelet was 25 each the jewelry shop sold 20 per month When it raised the price to 35 each it sold 14 per month Using the midpoint method the price elasticity of demand for bracelets is about a 1 66 b 1 06 c 0 94 d 0 60