Docsity
Log inSign up
Docsity
Prepare for your exams
Prepare for your exams

Study with the several resources on Docsity

Earn points to download
Earn points to download

Earn points by helping other students or get them with a premium plan

Guidelines and tips
Guidelines and tips
Sell on Docsity
Sell on Docsity
Log inSign up

Prepare for your exams

Study with the several resources on Docsity

Find documents

Prepare for your exams with the study notes shared by other students like you on Docsity

Search Store documents

The best documents sold by students who completed their studies

Search through all study resources
Docsity AINEW

Summarize your documents, ask them questions, convert them into quizzes and concept maps

Explore questions

Clear up your doubts by reading the answers to questions asked by your fellow students

Earn points to download

Earn points by helping other students or get them with a premium plan

Share documents
download point icon20 Points

For each uploaded document

Answer questions
download point icon5 Points

For each given answer (max 1 per day)

All the ways to get free points
Get points immediately

Choose a premium plan with all the points you need

Study Opportunities

Choose your next study program

Get in touch with the best universities in the world. Search through thousands of universities and official partners

Community

Ask the community

Ask the community for help and clear up your study doubts

University Rankings

Discover the best universities in your country according to Docsity users

Free resources

Our save-the-student-ebooks!

Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors

From our blog

Exams and Study
Go to the blog

Econ 2030 past exam 1, Exams of Economics

Louisiana State University (LSU) - EuniceEconomics

goes through concepts of chapters 1-5 of econ2030

Typology: Exams

2022/2023

Uploaded on 09/19/2023

christopher-robles
christopher-robles 🇺🇸

1 document

1 / 8

Toggle sidebar

This page cannot be seen from the preview

Don't miss anything!

bg1
Prof. Charles Roussel
Spring 2018
Exam #1
Answer key with explanations at the end!
Use the following for questions 1-2: Suppose Joel decides to go fishing at Lake Veronica, but he
faces a choice: he can fish on the north, south, east, or west side of the lake. His expected
catch for the day is as follows: 1 fish on the north side, 4 fish on the south side, 7 fish on the
east side, 2 fish on the west side.
1. In the situation above, what is Joel’s benefit of fishing on the south side of the lake?
A. -6 fish
B. -3 fish
C. 2 fish
D. 3 fish
E. 4 fish
2. In the situation above, what is Joel’s opportunity cost of fishing on the west side of the lake?
A. 1 fish
B. 2 fish
C. 4 fish
D. 7 fish
E. 12 fish
3. If a 6 percent ____ in price results in a 9 percent increase in quantity demanded, it can be
concluded with certainty that demand is price _______.
A. Increase; elastic
B. Decrease; elastic
C. Decrease; inelastic
D. Increase; inelastic
4. Suppose, at a given point in time, a market is in equilibrium. An increase in the number of
sellers in the market causes market supply to _____, resulting in a _____ that will be eliminated
as the market price of the good ____, everything else held constant.
A. Decrease; surplus; decreases
B. Decreases; shortage; increases
C. Increase; surplus; increases
D. Increase; surplus; decreases
E. Increase; shortage; decreases
5. Suppose both buyers and sellers expect the world price of oil to increase next week.
Everything else held constant, the demand for oil will _____ and the equilibrium price of oil will
______ TODAY.
pf3
pf4
pf5
pf8

Partial preview of the text

Download Econ 2030 past exam 1 and more Exams Economics in PDF only on Docsity!

Prof. Charles Roussel Spring 2018 Exam # Answer key with explanations at the end! Use the following for questions 1-2: Suppose Joel decides to go fishing at Lake Veronica, but he faces a choice: he can fish on the north, south, east, or west side of the lake. His expected catch for the day is as follows: 1 fish on the north side, 4 fish on the south side, 7 fish on the east side, 2 fish on the west side.

  1. In the situation above, what is Joel’s benefit of fishing on the south side of the lake? A. -6 fish B. -3 fish C. 2 fish D. 3 fish E. 4 fish
  2. In the situation above, what is Joel’s opportunity cost of fishing on the west side of the lake? A. 1 fish B. 2 fish C. 4 fish D. 7 fish E. 12 fish
  3. If a 6 percent ____ in price results in a 9 percent increase in quantity demanded, it can be concluded with certainty that demand is price _______. A. Increase; elastic B. Decrease; elastic C. Decrease; inelastic D. Increase; inelastic
  4. Suppose, at a given point in time, a market is in equilibrium. An increase in the number of sellers in the market causes market supply to _____, resulting in a _____ that will be eliminated as the market price of the good ____, everything else held constant. A. Decrease; surplus; decreases B. Decreases; shortage; increases C. Increase; surplus; increases D. Increase; surplus; decreases E. Increase; shortage; decreases
  5. Suppose both buyers and sellers expect the world price of oil to increase next week. Everything else held constant, the demand for oil will _____ and the equilibrium price of oil will ______ TODAY.

A. Decrease; increase B. Increase; decrease C. Decrease; decrease D. Increase; increase Use the following to answer questions 6-7: Suppose an online retailer of batteries has the following price scheme (with free shipping) for its 315 Oxide Button Cell Battery: Quantity Purchased Price per Battery 1-4 $3. 5-24 $1. 25 or more $1.

  1. In the situation above, what is the marginal cost of the fifth battery purchased? A. -$4. B. -$1. C. $1. D. $3. E. $7.
  2. In the situation above, would a rational consumer ever purchase three 315 Silver Oxide Button Cell Batteries from this site? A. Definitely yes. B. Definitely no. C. Yes, but only if the consumer needed exactly three batteries.
  3. “On Friday, February 2, the latest monthly snapshot of the American labor market revealed that wages had climbed 2.9% in January compared with a year earlier. The tight job market was forcing employers to pay more.” This is an example of a news item about a _____ issue. A. Macroeconomic B. Microeconomic
  4. Suppose ramen is an inferior good. ______ in national income will cause _______ in the demand for ramen and an increase in its equilibrium price, everything else held constant. A. A decrease; a decrease B. An increase; a decrease C. An increase; an increase D. A decrease; an increase
  1. In the situation above, ______ workers in Bulgaria will be employed in rose oil possessing planets when the countries trade than when they were operating in autarky. A. Fewer B. more Use the following to answer questions 16-18: Suppose Carmilla and Elizabeth work at a medical clinic and spend their time drawing vials of blood or administering EKG tests. Their productivity at each activity is the following: Vials per hour EKGs per hour Carmilla 35 7 Elizabeth 20 5
  2. In the situation above, can mutually beneficial trade occur? A. Yes, if Carmilla specializes in drawing blood and Elizabeth specializes in administering EKG tests. B. No, because Carmilla is more productive than Elizabeth is at both activities. C. No, because Elizabeth is more productive than Carmilla is at both activities. D. Yes, if Elizabeth specializes in drawing blood and Carmilla specializes in administering EKG tests.
  3. In the situation above, _____ has the absolute advantage in administering EKG tests and ____ has the comparative advantage in drawing vials of blood. A. Elizabeth; Carmilla B. Carmilla; Carmilla C. Elizabeth; Elizabeth D. Carmilla; Elizabeth
  4. In the situation above, ¼ ______ is ______ opportunity cost of producing one _____. A. Vials; Elizabeth’s; vial B. EKGs; Carmilla’s; vial C. EKGs; Elizabeth’s; vial D. Vials; Elizabeth’s; EKG E. Vials; Carmilla’s; EKG
  5. On a production possibilities frontier (PPF) graph, a specific combination of goods is said to be attainable at a particular point in time if it lies ______ the PPF. A. Inside

B. On C. Outside D. On or outside E. On our inside

  1. “Europe is home to some extraordinary wealth creators who often try to hide their success… Then there is the reclusive Reimann family of Germany, members of which reportedly take a vow at the age of 18 not to talk publicly about their business, JAB Holding, a Luxembourg-based investment group. Yet JAB’s habit of gulping down big, famous firms at a frenetic pace is making it hard for it to stay in the shadows. On January 29th it said it will bay $18.7b in cash (plus some shares) to buy Dr. Pepper Snapple, the world’s fifth-biggest maker of soft drinks, which has roots dating back to 1885. It will be combined with Keurig Green Mountain, an American coffee producer that JAB bought in 2016 for $14b.” This quote is an example of a news item about a _____ issue. A. Macroeconomic B. microeconomic
  2. Suppose ______ in the furniture industry decreases. Everything else held constant, this will cause the equilibrium price of furniture to ____ and the equilibrium quantity of furniture transacted to increase. A. Worker productivity; increase B. The cost of labor; decrease C. Worker productivity; decrease D. The cost of labor; increase
  3. “In France, it seems, 70% off Nutella spread can also do the trick. When a supermarket chain slashed the price of 33oz. Jars of the spread on Thursday, scenes grew so heated in one store in Ostricourt, in the north of France, that the police had to be called. Videos on social media showed shoppers stamping on each other and shouting as they tried to snag the jars at the discounted price of 1.41 euros, or about $1.75.” This question depicts an extreme example of… A. An increase in demand B. A decrease in demand C. A decrease in quantity demanded D. An increase in quantity demanded
  1. Increase; increase (D)-- Since buyers know the price will increase soon, they will rush to the store today. Since sellers know the price will increase next week and that many buyers will come to buy today, they will increase the price (not to the rate that it will be at next week but a little greater than it currently is).
  2. -$4.50 (A)-- When you buy 4 batteries, the total cost will be $12 (since each battery is $3). When you buy 5 batteries, the total cost will be $7.50 (since each battery is now only $1.50 at this quantity). In this example, marginal cost is the additional cost of buying one more battery. Therefore, you would do the following math equation: $7.50-$12 and find that the marginal cost is -$4.50 since you are actually saving money by buying more. A table below will give you a visual. Quantity Total Cost Marginal Cost 0 $0 0 1 $3 3 (3-0) 2 $6 3 (6-3) 3 $9 3 (9-3) 4 $12 3 (12-9) 5 $7.50 -4.50 (7.5-12)
  3. Definitely no (B)-- This is because you could buy 5 batteries for a cheaper price.
  4. Macroeconomic (A)-- The problem discusses an entire labor market and not just a particular market.
  5. A decrease; an increase (D)-- In increase in equilibrium price would only occur if the demand for the good was increasing. Since ramon is an inferior good and you know the demand is increasing for that inferior good, you can deduce that national income is decreasing.
  6. Seller (A)-- If Agnes was the buyer, she would not have paid $500 for it if her reservation price was $400. Because the transaction took place, you know she must be the seller. (When the question says ‘actual price,’ it means the price it was sold for on the market and not necessarily what it was truly worth.)
  7. Demand for; increase (C)-- If x and y are interchangeable (substitutes) and the supply of x decreases, more people are going to have to buy good y. Therefore, the demand for good y will increase.
  8. Definitely see Zoe Boekbinder (C)-- Because the concert ticket is free, Gus should choose what he values more. Because he set Zoe at a higher reservation price than Helen, he should see Zoe.
  9. The supply of espresso romanos decreased (D)-- The price increased and the quantity transacted decreased. You can tell that the supply decrease because transaction decreased and there was a price increase (like a shortage). It could not be A because the quantity transacted wouldn’t decrease if supply increased. It could not be B because if the demand

decreased, the price wouldn’t increase. It could not be C because if the demand increased, the quantity transacted would not decrease.

  1. Higher (B)-- Because Hungary is only producing paprika, the price will increase for Hungarians. In mutually beneficial trade, the price will always increase for the consumers of the good that their country is specializing in in the trade agreement.
  2. More (B)-- Since Bulgaria will specialized in rose oil for the trade, they will need to higher more rose oil workers.
  3. Yes, if Carmilla specializes in drawing blood and Elizabeth specializes in administering EKG tests (A)-- Carmilla will specialize in drawing blood because her opportunity cost for doing that over EKGs is less than Elizabeth’s (only ⅕EKGs compared to ¼ EKGs). Elizabeth will specialize in EKGs because her opportunity cost for doing that over drawing blood is less than Carmilla’s (only 4 vials instead of 5 vials). The chart below shows the math: Opportunity Cost per Unit Vials per hour EKGs per hour Carmilla (7/35)= ⅕ EKG (35/7)= 5 Vials Elizabeth (5/20)= ¼ EKG (20/5)= 4 Vials
  4. Carmilla; Carmilla (B)-- Carmilla has the absolute advantage in administering EKGs because she can do 7 per hour and Elizabeth can only do 5 per hour. Carmilla has the comparative advantage in drawings vials because her opportunity cost for doing so is only ⅕ EKG and Elizabeth’s is ¼ EKG, which is greater.
  5. EKGs; Elizabeth’s; vial (C)-- When you look at your “opportunity cost per unit” chart, the number ¼ only appears once, when talking about the opportunity cost of vials is ¼ EKG. Therefore, you know the first blank is EKG. It is Elizabeth’s opportunity cost (as you can see on the graph) of producing one vial (she can do ¼ of an EKG test in the time that she can draw 4 vials of blood).
  6. On or inside (E)-- It is most productive and efficient to produce anywhere directly on the PPF graph. While it is not efficient or productive to produce inside the graph, it is attainable (you just wouldn’t be utilizing all of your resources).
  7. Microeconomic (B)-- The quote is talking about one business and the one market that they compete in.
  8. The cost of labor; decrease (B)-- In order for the equilibrium quantity of furniture transacted to increase, the price would have to decrease, so it must either be B or C. If worker productivity decreased, supply would decrease (and therefore quantity transacted would too) and price would increase. When the cost of labor decreases, an industry is able to afford to hire more workers and as a result, supply will increase and the price will drop since the industry is able to sell more.
  9. An increase in quantity demanded (D)-- On a normal day without the supersale in Nutella, the quantity demanded was at a normal, steady, and average number. However, when the sale occurred, there was a drastic increase in quantity demanded causing people to fight and step over each other to get their jars since the quantity demanded is greater than the quantity in supply.