Economics 101 .edu | Cornell University



Econ 1110 - INTRODUCTORY MICROECONOMICSMakeup PRELIM #1 – Wissink – Spring 2019 – March 6________________________________________ ____________________________________Your LAST (FAMILY) NAME Your First (given) nameYour NetId: _____________________ Your Student Number: ________________________________Brief Survey on Studying (2 points): Your answers to these questions have absolutely no impact on your exam score, and I will remove all your names before I analyze this data.(1) We've had 11 classroom lectures so far this term. How many did you attend?(2) Not including attending lectures, how much time have you spent on this class each week doing things like reading or working on problem sets?less than one hour1-2 hours3-4 hours5-6 hours7+ hours(3) How much time did you spend studying for this prelim?less than one hour1-4 hours4-8 hours9+ hours(4) Did you mostly study for this prelim by yourself or with other students in the class?mostly by yourselfmostly with other students in the classabout half by yourself and half with other students in the class(5) When did you do most of your studying for this prelim?the night before and day of the examspread over multiple sessions over multiple days starting before the night before the exam(6) What did you do to study for this prelim? (Choose all that apply)Reviewed the lecture slides and/or your notes and/or Panopto videosRead the bookIdentified areas or topics you are struggling with and got help (e.g., used office hours, sections, the ETC, the LSC)Studied the MEL quizzes and other MEL contentWorked problems from the posted sample problem setsWorked problems from the posted sample prelimsExplained or taught the material to someone elseUsed outside web based tutorials of content.One more time, please…Econ 1110 - INTRO MICRO – Makeup PRELIM #1 – Wissink – Spring 2019 – March 6________________________________________ ____________________________________Your LAST (FAMILY) NAME Your First (given) nameYour NetId:_____________________ Your Student Number:________________________________Instructions and Exam Taking Policy:There are two sections in this exam. Answer all questions.Part I: 15 multiple choice/fill in the blank questions @ 3.2 points eachPart II: 2 problems @ 25 points eachTotal Points = 98 + 2 points for doing survey = 100, Total Time = 90 minutesNO QUESTIONS CAN BE ASKED DURING THE EXAM ABOUT EXAM CONTENT: If there is something troubling you about a question, write us a note on the exam somewhere and we will deal with it as we are grading. If you need a pencil or scratch paper, or some other supply that we might have, raise your hand and wait for the proctor to come to you. RESTROOM USE: If you absolutely need to use the restroom raise your hand and wait for the proctor. Only one person can be out of the examination room at a time, and the proctor will hold onto your exam papers while you are out at the restroom.NO CELL PHONES, IPODS OR DEVICES WITH CALCULATOR “APPS” or large screens.NO GRAPHING CALCULATORS. NO BOOKS. NO NOTES. NO HELP SHEETS.NO TALKING TO EACH OTHER.Check the DIS# you regularly attend - that is where you will pick up your graded prelim-63517018000Survey = ______________MC/FIB =___________________Q1 =__________________Q2 =__________________TOTAL: =_________________076200Part I: Multiple Choice and Fill-In-The-Blank Questions. Do them ALL.Circle the letter for your answer or fill in your answer in the blank provided.020000Part I: Multiple Choice and Fill-In-The-Blank Questions. Do them ALL.Circle the letter for your answer or fill in your answer in the blank provided.. Which one of the following is primarily a normative statement?Increasing the fines for fare evasion in public transportation will result in more ticket revenue.Creating large conservation regions can improve the chances of survival for endangered species.People often behave in ways that economists consider irrational.The size of commission fees in financial markets should be closely monitored so that rewards are equally shared.Several agents acting in their own selfish interest can sometimes lead to inefficient outcomes.. If an economy experiences unemployment, it would show up as a pointon the production possibilities curve, but on one of the axes.outside the production possibilities curve.inside the production possibilities curve.on the production possibilities curve.on a production possibilities curve which has shifted inward towards the origin.. Migration is a politically sensitive topic. Much of the discussion is centered around the effect of migrants on labor markets. Suppose the government builds a wall and consequently decreases the number of migrants allowed into the country. Suppose also that the only exogenous effect this policy has is that it decreases the supply of labor in the economy. Which one of the following predictions is most correct based on a perfectly competitive model of demand and supply in the labor market?The equilibrium market price of labor (wages) will definitely increase and the equilibrium quantity traded (employment) could go up or down.Employment will definitely increase but wages could go up or down.Both wages and employment will definitely increase.Both wages and employment will definitely decrease.Wages will definitely increase and employment will definitely decrease.Price ($/pound)QuantityDemanded(pounds)QuantitySupplied(pounds)$2.005000$2.2545075$2.50400150$2.75350225$3.00300300$3.25250375$3.50200450$3.75150525$4.00100600. Consider the following supply and demand schedules in the local apple market. A new study shows that apple consumption improves health outcomes. The local government therefore wants to make apples more affordable and imposes a price ceiling of $2.50/pound on apples. Assume no black market activity.What is the quantity traded in the regulated equilibrium?Your answer: . Consider the apple market from the previous question. Suppose black market trading does take place. What is the black-market price predicted to be?Your answer: . Watkins Glen Racing College has just opened its doors in the village of Watkins Glen, New York. Due to the numbers of new students who are moving to Watkins Glen to attend the school, demand for housing units has sharply increased. Assume that the supply of housing in Watkins Glen is typically shaped (that is, positively sloped) and that supply cannot shift in the short run. How would the short run equilibrium quantity of housing units traded and total expenditure on housing units change?Quantity has stayed the same, total expenditure has increased.Quantity has increased and total expenditure has decreased.Quantity has increased and total expenditure has increased.Quantity has decreased and total expenditure has decreased.There is not enough information to answer this question.left000. Consider the market for ground beef represented by the figure, which is initially in equilibrium at point J. Which one of the following is correct if the market equilibrium has shifted to point K?There is an excess supply of 50,000 pounds at the price of $1.00.The demand decreased due to a lower price substitute.There is an excess demand of 25,000 pounds at the price of $1.00.The shift in supply will cause a temporary shortage, which will disappear when the price rises to $1.50.Both demand and the quantity demanded have dropped.31832559207500. Consider the demand and supply figure. If the government imposes a price floor of $2 in this market, the result of this floor will most likely beexcess demand.nothing interesting.that demand will shift leftward.excess supply. none of the above.. Consider the national market for sugar. A recent report highlights the negative health impacts of consuming too much sugar. At the same time there is a terrible drought in the southern states that farm sugar. Which one of the following statements is correct concerning the sugar market?Equilibrium price and equilibrium quantity must increase as a consequence of these events.Equilibrium price and equilibrium quantity must decrease as a consequence of these events.Equilibrium price will increase and equilibrium quantity will decrease as a consequence of these events.Equilibrium price will definitely increase but we don’t know what will happen to equilibrium quantity as a consequence of these events.Equilibrium quantity will definitely decrease but we don’t know what will happen to equilibrium price as a consequence of these events.2865120388619900. Consider the figure with Demand and Old and New Supply. The change in net social surplus as a result of the increase in supplyis areas 7 + 8 + 9is areas 3 + 4 + 5 + 6is areas 1 + 2 + 3 + 4is areas 1 + 2 + 3 + 4 + 5 + 6cannot be determinedfrom the information given.302514013652500. Suppose that the market for peanuts in the U.S. can be represented by the supply and demand diagram. Attempting to avoid issues with peanut allergies, suppose the government imposes a quantity quota on this market at Q = Q’. Assume that prior to the imposition of the quota, the price in the market was P* and the quantity sold was Q*. Which one of the following consequence is true regarding the impact of the quota?Consumers’ surplus post quota equals area A, and producers’ surplus post quota equals areas B+C+D+E+F.Producers’ surplus increases by the area B+C+G, and consumers lose area B+D in surplus.Deadweight loss due to the quota equals the area D+F+G.Producers’ surplus increases by the area B, but producers lose the area F.There is a chronic shortage in the market.-914405715000. Consider the demand and supply graphs for X, Y and Z as illustrated. In each market the initial market price is $30 and initial quantity traded is 30 units. The government plans to place a tax of $t/unit on these markets. In which market would the economic price incidence of the tax fall entirely on demanders?Market XMarket YMarket ZWe do not have enough information to know.None of the above.. Paradise Island has a fixed supply of land that can be rented on an annual basis. It is fixed at 5,000 square feet. The annual demand for land rentals on Paradise Island is given as PD = 26,000 – 5Q.At the market equilibrium, what is the exact value of the own price elasticity of demand using the point formula?Your Answer: _________________. A change in the price of sun screen lotion from $14 to $12 per bottle changes the quantity supplied from 24 to 20 bottles per month. Using the (midpoint) arc formula the own price elasticity of supply in this part of the supply curve is approximately equal toYour Answer: ___________________________. If the own price elasticity of demand for Cheer detergent is -3.0, then a12 percent drop in price leads to a 36 percent rise in the quantity demanded.12 percent drop in price leads to a 4 percent rise in the quantity demanded.$1,000 drop in price leads to a 3,000-unit rise in the quantity demanded.$1,000 drop in price leads to a 333-unit rise in the quantity demanded.12 percent rise in price leads to a 36 percent rise in the quantity demanded.left730885Part II: Make sure you read and do ALL parts of each question. Show as much work as possible. TRY to get started on every question. Show us something. Write legibly and remember to label all graphs and axes in diagrams.020000Part II: Make sure you read and do ALL parts of each question. Show as much work as possible. TRY to get started on every question. Show us something. Write legibly and remember to label all graphs and axes in diagrams.1. In a small country named Smokefree, cigarettes are officially forbidden, but the people trade cigarettes anyway “under the table” as they say. Cigarette demand (in packs) is QD = 12 ? P and cigarette supply (in packs) is QS = 2P.Graph the demand and supply. Please make your graph big enough to answer this entire question.Find the values for the equilibrium price and quantity in the market and show on your graph.The government becomes aware of these trades and deploys its police force in a way which will result in it seizing and destroying half of the quantity of cigarettes supplied at each and every price. Under this circumstance, what are the resulting demand and supply functions? What is the new equilibrium price and quantity? Show the result of this policy on your demand and supply diagram.Using your diagram, show how consumers’ surplus changes between (b) and (c)? No number calculations are necessary, just indicate on the graph.Suppose that the government changes the policy and legalizes cigarette trade and no longer seizes and destroys any packs. Now cigarettes are traded in an open market with the original demand and supply equations. However, for every pack of cigarettes traded the government levies a per unit tax of t/pack. The government sets its tax so that the same number of packs of cigarettes are now traded as were traded under the “seize & destroy” policy above. It collects the tax revenue from suppliers.Illustrate the tax policy on your graph (or make a new graph, if you’d like to). Make sure to indicate the final demand price, final supply price and quantity traded under the tax paring the two policies, which policy would consumers prefer? Which policy would cigarette suppliers prefer? Which policy would the government prefer? Briefly defend your positions.Answers:Answers:2. Assume that Countries A and B have equal quantities of labor resources and identical technologies. Country A can produce 100 bushels of wheat or 100 yards of cloth, or any combination as shown by the linear PPF “XZ” in the figure below. Country B can produce 100 bushels of wheat or 300 yards of cloth or any combination, as shown by the linear PPF “XY” in the figure below.Which country has an absolute advantage in the production of wheat, and which country has an absolute advantage in the production of cloth? Briefly defend your answers.Which country has a comparative advantage in the production of wheat and which has a comparative advantage in the production of cloth? Briefly defend your answers.Construct the joint production possibilities frontier for these two countries. Make sure to: label the axes with units of measurement and values, identify values at any kink points, and indicate the steepness of the joint PPF.Assume that the two countries completely specialize in the good they have the comparative advantage in and that both countries consume both goods after trade takes place. Which country imports wheat?Assume the terms of trade are that one bushel of wheat exchanges for two yards of cloth. Explain why the country that imports wheat will gain from trade.Answers:Answers:Answers, Makeup Prelim 1, 1110, Spring 2019 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download