EC | 101 | Introductory Microeconomic an...
EC | 101 | Introductory Microeconomic analysis | exam |EC101 DD/EE Midterm 2 November 9, 2021 Version C Name (last, first): |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| Student ID: |U |__|__|__|__|__|__|__|__| Discussion Section: |__|__| Signature____________________________________ p. 1 v. C EC101 DD/EE F21 Midterm 2 INSTRUCTIONS: Take out your pencils and yo
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EC | 101 | Introductory Microeconom...
EC | 101 | Introductory Microeconomic analysis | exam |EC101 DD/EE Midterm 2 November 9, 2021 Version C Name (last, first): |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| Student ID: |U |__|__|__|__|__|__|__|__| Discussion Section: |__|__| Signature____________________________________ p. 1 v. C EC101 DD/EE F21 Midterm 2 INSTRUCTIONS: Take out your pencils and yo
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22.
In perfectly competitive markets
a.
consumers may wait in long queues (lines).
b.
high-cost sellers charge more than low-cost
sellers.
c.
consumers with low WTP may pay less than
consumers with high WTP.
d.
consumers that purchase goods have higher
WTP than those who do not.
23.
When there is no fixed cost and marginal cost is
increasing, the supply curve is the same curve as
a.
the marginal cost curve.
b.
the demand curve.
c.
the variable cost curve.
d.
the average cost curve
24.
Suppose the US government passes a law making it
much more difficult for US firms to export steel.
Which is most likely to occur?
a.
The surplus of US steel producers will fall.
b.
US steel producers will hire more workers.
c.
US social surplus will increase.
d.
The price of American-made cars will rise.
25.
Private negotiations are most likely to solve problems
created by negative externalities when
a.
the externality has a small effect on many
people.
b.
the government intervenes in the market.
c.
many firms create the externality.
d.
the externality involves a small number of large
firms.
26.
Economic efficiency may not be compatible with
equity, because
a.
competitive markets become inefficient when
prices are unfair.
b.
incentives that increase efficiency may create
large income differences.
c.
marginal costs are increasing in the great
majority of firms.
d.
rich people tend to work harder than poor
people.
27.
When the demand for labor is extremely elastic, a tax
on labor would
a.
b.
be paid mainly by workers.
c.
raise a small amount of tax revenue.
d.
be paid mainly by employers.
Table VIR.
Residents of a village can buy dogs to
keep thieves away from their houses. Unfortunately,
the dogs bark a lot and annoy the neighbors.
Each
dog
has the following costs and benefits:
Dog
Number
Private
MWTP
Private
MC
External
Cost
1
\$28
\$ 6
\$5
2
\$26
\$ 8
\$5
3
\$24
\$13
\$5
4
\$20
\$18
\$5
5
\$18
\$19
\$5
28.
See Table VIR.
The social surplus created by the
second dog is
a.
\$18.
b.
\$24.
c.
\$26.
d.
\$13.
29.
See Table VIR.
The market-equilibrium quantity of
dogs bought would be
a.
2.
b.
4.
c.
5.
d.
3.
30.
See Table VIR.
Of the amounts below, which is the
smallest
excise tax that could move the market to the
socially optimal number of dogs?
a.
\$4
b.
\$3
c.
\$2
d.
\$5
31.
Which of the following statements about the
equilibrium of a perfectly competitive market is true?
a.
Those sellers whose costs are more than the
price choose to sell the good.
b.
Consumer surplus is maximized.
c.
Those buyers with WTP less than the price
d.
The price determines which buyers and which
sellers participate in the market.
32.
In order to please President Biden, corn farmers
decide to grow and sell as much corn as consumers
want to buy at half the competitive-equilibrium price.
Then
a.
consumer surplus will fall.
b.
producer surplus will increase.
c.
social surplus will increase.
d.
social surplus will fall.

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