Professor M Rush ECO 2023 SUMMER B 2013 MIDTERM 1 Read all instructions on this page This test is governed by UF s academic honesty code It is intended to have 30 multiple choice questions Please check to be sure your copy has all 30 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 1 Your name and initials 2 Your UF ID number 3 Form code A 4 Sign your name on the bubble sheet On the bubble sheet please enter 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 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 CREFIT FOR 2 QUESTIONS TURN OFF ALL CELL PHONES AND OTHER COMMUNICATION DEVICES You may not use a cell phone 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 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 after 10 PM The test scores will be on class grade card 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 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 3 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 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 A B C D A B C D E A B C D A B C D A B C D A B C D E 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 3 1 Suppose UF raises the price of tickets to its football games and the total revenue increases Based on this then it is most likely the case that UF football games are a normal good there are not many substitutes for UF football games if ticket prices were lowered then total revenue would increase by even more the supply of tickets to UF football games is elastic 2 Suppose jet fuel rises in price Then the equilibrium price of travel by plane and the equilibrium quantity of travel by plane rises increases does not change decreases falls decreases rises does not change rises decreases 3 The income elasticity of demand for natural Christmas trees is positive This result means that natural and artificial Christmas trees are substitutes natural Christmas trees are a normal good the demand for natural Christmas trees is inelastic the demand for natural Christmas trees is elastic 4 Over the past few years the government issued new regulations that increased the amount of ethanol that had to be added to gasoline These new regulations the equilibrium price of ethanol and the equilibrium quantity of ethanol 5 Vera Bradley makes a specific style of cloth purses The elasticity of demand for a Vera Bradley purse likely is the elasticity of demand for purses in general 6 When the price of a pizza is 11 27 million pizzas per day are demanded When the price of a pizza is 9 33 million pizzas per day are demanded The price elasticity of demand equals raised increased raised decreased lowered decreased lowered increased larger than the same as smaller than not comparable to 0 33 3 00 1 73 1 00 None of the above are correct 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 3 7 The above figure shows the market for pizza Suppose the tomato sauce used to produce pizza rises in price Which panel shows the effect of a rise in the price of tomato sauce Figure A Figure B Figure C Figure D A B C D 8 Suppose the number of Mexican restaurants falls as some restaurants close As a result the equilibrium price of Mexican food and the equilibrium quantity 9 The price elasticity of demand for Pizza Hut pizza is 4 0 If Pizza Hut decides to decrease the quantity of pizza it produces by 2 percent then the price of Pizza Hut pizza will rise by percent A B C D A B C D E rises increases rises decreases falls increases falls decreases 2 0 0 5 8 0 1 0 None of the above are correct 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 3 10 If the price is above the equilibrium price then there is a surplus and market forces will operate to lower price surplus and market forces will operate to raise price shortage and market forces will operate to lower price shortage and market forces will operate to raise price 11 From 9 30 to 10 45 AM Fred can sleep in go to his …
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