Professor M Rush ECO 2023 SUMMER B 2012 MIDTERM 1 Read all instructions on this page This test is governed by UF s academic honesty code It is intended to have 33 multiple choice questions Please check to be sure your copy has all 33 Choose the best answer for each question The next is important Unless you are specifically told otherwise on this test do not assume that demand or supply is either perfectly elastic or perfectly inelastic On the bubble sheet please enter 1 Your name and initials 2 Your UF ID number 3 Form code A 4 Sign your name on the bubble sheet Check that the form code and UF ID number you bubbled in are correct now Also check to be sure your name is correct do it now I have heard a rumor that the ability to correctly record these had been mastered by a few students at FSU as well as a couple of accounting and journalism students While I have sincere doubts nonetheless I will investigate these rumors but in the meanwhile CHECK YOUR FORM CODE AND UF ID NUMBER IF YOU GET EITHER OF THESE WRONG YOUR TEST MIGHT NOT BE GRADED AND IF IT IS GRADED YOU WILL LOSE 6 POINTS which equals about 2 questions TURN OFF ALL CELL PHONES AND OTHER COMMUNICATION DEVICES You may not use a cell phone a Blackberry or any other sort of device that allows for communication as your calculator I have become increasingly concerned that some students are at a real disadvantage because they are unwilling to ask questions during the exam while others ask a lot of questions Hence to level the playing field I have decided to eliminate all questions during the test I don t like this policy but it seems the fairest policy Do not ask questions of me or the TA s in the interest of fairness I have instructed them not to answer any questions during the exam You will have one hour 60 minutes to complete the exam and bubble in all your answers When the TAs say that time is up you must hand in your exam We will not give extra time to finish bubbling in the answers so be sure you are done when the 60 E C O 2 0 2 3 M I D T E R M 1 S U M M E R B 2 0 1 2 minutes are up Of course you may hand in your test at any time before the 60 minutes are up An answer key will be posted on the class web page later this evening at around 9 30 PM The test scores will be on class web page within a few days Once you see the answer key you might have a question about why one answer is right and another is wrong For these questions email me at mark rush warrington ufl edu Do NOT email the grader about these questions After the scores are posted if you think your posted score is incorrect then email the grader at eco2023 grader warrington ufl edu If you email me about your test score I will not forward the email nor respond to you you MUST email the grader You have one week after the curved score is posted to request a grade check After a week the score will not be changed If the web reports what you bubbled in for each question and you ask the grader to check an answer because you believe you bubbled in something other than what is reported and the reported answer on the web is correct you will lose 1 additional question 2 E C O 2 0 2 3 M I D T E R M 1 S U M M E R B 2 0 1 2 1 Which of the following increases the equilibrium price of a used car and also A fall in income if used cars are an inferior good An increase in the wage rate paid to used car salespeople increases the equilibrium quantity purchased i ii A B C D Neither of the above because the question suggests a violation of the law i only ii only Both i and ii of demand 2 If the price of a burger decreases by 5 percent and as a result the quantity of burgers demanded increases by 8 percent the price elasticity of demand equals 0 60 0 40 1 60 0 625 A B C D E None of the above answers are correct 3 If technological advances lower the price of computer chips in the market for computers the equilibrium price of a computer will and the equilibrium quantity of computers will 4 Magazines are made from paper If the price of paper rises then the equilibrium price of a magazine and the equilibrium quantity A B C D A B C D fall increase fall decrease rise increase rise decrease rises increases rises decreases falls increases falls decreases 3 E C O 2 0 2 3 M I D T E R M 1 S U M M E R B 2 0 1 2 5 The above figure shows the market for pizza Which panel shows the effect of a rise in the price of the tomato sauce used to produce pizza 6 When China builds a dam using few machines and a great deal of labor it is most directly answering the question 7 If the demand curve for bottled water shifts leftward and the supply curve of bottled water shifts leftward the equilibrium price of bottled water definitely rises price of bottled water definitely falls quantity of bottled water definitely increases quantity of bottled water definitely decreases Figure A Figure B Figure C Figure D what how where for whom A B C D A B C D A B C D 4 E C O 2 0 2 3 M I D T E R M 1 S U M M E R B 2 0 1 2 8 The PPF is bowed outward because i ii iii to produce more goods and services unemployment must be decreased resources are not equally productive in producing all the different goods and services technology must advance in order to increase the production of all goods and services A B C D E i only ii only i and iii ii and iii i ii and iii 9 Jane produces only corn and cloth and cloth is measured along the horizontal axis Jane prefers cloth to corn Taking account of her preferences for corn and cloth A makes her production possibilities frontier straighter B makes her production possibilities frontier steeper C makes her production possibilities frontier flatter D does not affect her production possibilities frontier 10 Taco Bell s economists determine that the price elasticity of demand for their tacos is 2 0 So if Taco Bell raises the price of its tacos by 6 0 percent the quantity demanded will decrease by percent 2 0 3 0 6 0 12 0 A B C D E None of the above answers are correct …
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