Professor M Rush ECO 2023 SPRING 2013 FINAL EXAM 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 TURN OFF ALL CELL PHONES AND OTHER COMMUNICATION DEVICES 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 investigated the rumor that the ability to correctly record these had been mastered by a few students at FSU This rumor turned out to be false But the rumor that an accounting major and a journalism major did successfully record these on a test is true These students have since been bronzed and are on display outside their respective colleges to serve as an inspiration for all other accounting and journalism students 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 2 questions 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 E C O 2 0 2 3 F I N AL S P R I N G 2 0 1 3 An answer key will be posted on the class web page later this evening at about 10 00 The test scores will be on class web page probably by Tuesday or Wednesday the grades will be on the class page probably Wednesday or Thursday 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 F I N AL S P R I N G 2 0 1 3 1 The Sherman Act makes it illegal to increase market share A B merge firms in the same industry C D E attempt to monopolize an industry price discriminate set your price below the prices set by you competitors 2 Trumpets are a normal good and people s incomes increase As a result the equilibrium price of a trumpet and the quantity A B C D E rises increases rises decreases falls decreases falls increases does not change increases 3 In the above figure if a single price monopolist charged the profit maximizing price the triangle abc represents consumer surplus producer surplus deadweight loss the monopoly s economic profit A B C D E None of the above answers are correct consumer surplus producer surplus deadweight loss the monopoly s economic profit A B C D E None of the above answers are correct 4 In the above figure if a single price monopolist charged the profit maximizing price the rectangle bcde represents 3 E C O 2 0 2 3 F I N AL S P R I N G 2 0 1 3 5 Suppose Microsoft has a monopoly in producing operating systems Windows If the marginal cost of producing an additional copy of Windows is 0 then when Microsoft maximizes its profit its marginal revenue is positive equal to 0 negative A B C D More information is nee4ded to answer the question 6 A new technology that raises the marginal product of labor the equilibrium wage rate and the equilibrium quantity of labor A B C D raises increases raises decreases lowers increases lowers decreases 7 The figure above shows the market for pizza Suppose the cheese used to produce pizza falls in price Which figure shows the effect of this change in the market for pizza A B C D Figure A Figure B Figure C Figure D 4 E C O 2 0 2 3 F I N AL S P R I N G 2 0 1 3 8 Cars and trucks are substitutes for consumers The price of a car rises As a result the equilibrium price of a truck A B C D rises and the equilibrium quantity increases falls and the equilibrium quantity decreases rises and the equilibrium quantity decreases falls and the equilibrium quantity increases 9 Which of the following applies to the problem of a common resource i In the absence of government action there are incentives to overuse the common resource ii The resource is subject to free riding iii Even with government action it is impossible for an efficient level of output to be achieved i only i and ii ii and iii i ii and iii i and iii A B C D E Walmart Lower prices Don t lower prices Sears Lower prices S 9 million W 7 million S 2 million W 4 million Don t lower prices S 1 million W 3 million S 9 million W 1 million 10 Sears and Wal Mart must decide whether to lower their prices based on the potential economic profits shown in the table above Who has a dominant strategy A Walmart has a dominant strategy but Sears does not B Sears has a dominant strategy but Walmart does not C Both Walmart and Sears have dominant strategies D Neither …
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