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Exam 1 with Answer Key | Principles of Microeconomics | ECON 2020, Exams of Microeconomics

Auburn University (AU)Microeconomics
Prof. William Finck

Material Type: Exam; Professor: Finck; Class: PRINCIPLES OF MICROECONOMICS; Subject: Economics; University: Auburn University - Main Campus; Term: Spring 2014;

Typology: Exams

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VERSION 1
1
Name________________
ECON 2020 Exam #1
Directions: Read each question and EVERY possible answer VERY carefully. Select the
best answer from the alternatives. Good luck!
Use the following figure to answer questions 1 – 4.
P S
$27
$19
$10
D
Q
170 200 260
1. Equilibrium occurs in this market at a price of ____ and quantity of _____ units.
A. $10, 260
B. $19, 200
C. $27, 170
D. $10, 170
E. $27, 260
2. If the price in this market falls from $27 to $19, then the dotted area represents
A. the additional producer surplus to the initial sellers
B. the producer surplus to new sellers
C. the consumer surplus to new buyers
D. the additional consumer surplus to the initial buyers
3. A price floor of $27 in this market would cause a ____ of ____ units.
A. shortage, 30
B. surplus, 30
C. shortage, 90
D. surplus, 90
E. it would have no effect
4. A price ceiling of $27 in this market would cause a ____ of ____ units.
A. shortage, 30
B. surplus, 30
C. shortage, 90
D. surplus, 90
E. it would have no effect
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pf4
pf5
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Download Exam 1 with Answer Key | Principles of Microeconomics | ECON 2020 and more Exams Microeconomics in PDF only on Docsity!

Name________________ ECON 2020 Exam #

Directions: Read each question and EVERY possible answer VERY carefully. Select the best answer from the alternatives. Good luck!

Use the following figure to answer questions 1 – 4.

P S

$

D

Q

  1. Equilibrium occurs in this market at a price of ____ and quantity of _____ units. A. $10, 260 B. $19, 200 C. $27, 170 D. $10, 170 E. $27, 260
  2. If the price in this market falls from $27 to $19, then the dotted area represents A. the additional producer surplus to the initial sellers B. the producer surplus to new sellers C. the consumer surplus to new buyers D. the additional consumer surplus to the initial buyers
  3. A price floor of $27 in this market would cause a ____ of ____ units. A. shortage, 30 B. surplus, 30 C. shortage, 90 D. surplus, 90 E. it would have no effect
  4. A price ceiling of $27 in this market would cause a ____ of ____ units. A. shortage, 30 B. surplus, 30 C. shortage, 90 D. surplus, 90 E. it would have no effect

Use the following graph of the demand for ribs to answer questions 5 – 6.

  1. A decrease in the price of barbeque sauce (a complement) would cause a movement from A. point B to point C B. point C to point B C. point A to point C D. point C to point A
  2. An increase in the price of ribs would cause a movement from A. point B to point C B. point C to point B C. point A to point C D. point C to point A
  3. In a market where the demand is given by the equation Qd = 216 – 2P and supply is given by the equation Qs = 24 + 4P, find the equilibrium price and equilibrium quantity. A. $32; 88 units B. $32; 152 units C. $40; 136 units D. $96; 24 units E. “I don’t know how to put this, but I’m kind of a big deal. People know me.”
  4. How would an increase in consumer income affect the market for burritos if burritos are normal goods? A. demand would increase, causing equilibrium price and quantity both to rise B. demand would increase, causing equilibrium price to rise and quantity to fall C. demand would decrease, causing equilibrium price and quantity both to fall D. supply would increase, causing equilibrium price to fall and quantity to rise E. demand would increase, causing equilibrium price to fall and quantity to rise

D1^ D

A

B

Price

Quantity

C

P

P

Q1 Q2 Q

  1. Which of the following statements is TRUE? A. Economists believe that price rationing is the most efficient rationing method. B. Price rationing allows every consumer that would like the good to have it. C. Price rationing allows every consumer willing to pay the equilibrium price to have it. D. A and B only E. A and C only
  2. How do expectations of lower future prices affect the market for Sex Panther cologne today? A. supply increases and demand decreases, causing a fall in equilibrium price and an indeterminate change in quantity B. supply decreases and demand increases, causing a rise in equilibrium price and an indeterminate change in quantity C. supply decreases and demand decreases, causing a fall in equilibrium price and an indeterminate change in quantity D. supply increases and demand decreases, causing a rise in equilibrium price and an indeterminate change in quantity E. “Sixty percent of the time, it works every time.”
  3. When the price of a good decreases, A. producer surplus decreases and consumer surplus decreases B. producer surplus decreases and consumer surplus increases C. producer surplus increases and consumer surplus increases D. producer surplus increases and consumer surplus decreases E. “I miss being with you. I miss being near you. I miss your laugh. I miss your scent. I miss your musk. When this all gets sorted out, I think you and me should get an apartment together!”

Use the following demand and supply schedules to answer question 19.

Price $60 $48 $36 $24 $12 $ Quantity Demanded 0 60 120 180 240 300 Quantity Supplied 75 60 45 30 15 0

  1. The equilibrium price in the above market is A. $ B. $ C. $ D. $ E. “What? You pooped in the refrigerator? And ate the whole wheel of cheese? How’d you do that? Heck, I’m not even mad -- that’s amazing!”
  1. The condition whereby the economic resources we use to produce goods and services are limited relative to our wants for them is referred to by economists as A. a shortage B. opportunity cost C. equilibrium D. inefficiency E. scarcity

Use Brick's supply of hand grenades to answer question 20 - 21.

Willingness - $10 $13 $16 $20 $24 $28 $ Quantity - 1 2 3 4 5 6 7

  1. If the price of a hand grenade is $20, how many will Brick offer for sale? A. 3 B. 4 C. 5 D. 6 E. “Yeah, there were horses, and a man on fire, and I killed a guy with a trident.”
  2. If the price of a hand grenade is $20, what is Brick’s producer surplus? A. $ B. $ C. $ D. $ E. $
  3. Which of the following will cause the supply curve to shift to the left? A. an improvement in technology B. a rise in the number of sellers C. a rise in the price of an input D. all of the above E. A and B only
  4. A rise in the price of a mystery good caused a change in the market for blue suits that led to a fall in the price of blue suits. Which of the following could possibly be the mystery good? A. blue thread (an input) B. red suits (a substitute) C. blue ties (a complement) D. A and B only E. A and C only