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secondmidtermafternoonspring2019versiononewithanswers.pdf
secondmidtermafternoonspring2019versiononewithanswers.pdf
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secondmidtermafternoonspring2019versiononewithansw...
secondmidtermafternoonspring2019versiononewithanswers.pdf-Economics 101 Name _____________________________ Spring 2019
secondmidtermafternoonspring2019ver...
secondmidtermafternoonspring2019versiononewithanswers.pdf-Economics 101 Name _____________________________ Spring 2019
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(This page is intentionally left blank as an extra work sheet.)
DO NOT DETACH THIS SHEET FROM THIS EXAM BOOKLET! EXAM
CONTINUES ON NEXT PAGE
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I, _____________________________________________, agree to neither give nor receive any
help on this exam from others. I understand that the use of a calculator or communication device
on this exam is academic misconduct. I also understand that providing answers to questions on
this exam to other students is academic misconduct, as is taking or receiving answers to
questions on this exam from other students. Thus, I will cover my answers and not expose my
answers to other students. It is important to me to be a person of integrity and that means ALL
ANSWERS on this exam are my answers. Any violation of these guidelines will result in a
penalty of at least receiving a zero on this exam.
Signed ________________________________________
1. (Just two choices here!) Consider a small, closed economy. If this economy opens its gadget
market to trade and the domestic price of gadgets is less than the world price of gadgets then:
a. The total surplus in this market will increase if the market is opened to trade.
b. The value of producer surplus in this small economy will decrease when this market is opened
to trade.
2. (Just two choices here!) Peter operates a factory and this year Peter decided to triple his
employment of labor, his employment of raw materials, and his employment of capital. This
decision to increase the amount of labor, raw materials and capital that he uses did not affect the
price of any of these inputs. Peter only uses labor, raw materials and capital to produce his
product. At the end of the year Peter realized that he had managed to produce two and a half
times as much output as he had prior to this increase hiring of labor, raw materials, and capital.
From this information we can conclude that:
a. Peter's factory experienced decreasing costs per unit and decreasing returns to scale.
b. Peter's factory experienced increasing costs per unit and decreasing returns to scale.
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Use the graph below of a firm's cost curves to answer the next THREE (3) questions.
3. Suppose this firm produces 6 units of output and sells these units for $15 per unit. How many
of the following statements are true given this information?
•
At this price and output combination this firm earns zero economic profit.
•
This firm's average variable costs are equal to $11 per unit.
•
This firm's average total costs are equal to $90.
•
This firm's fixed costs are greater than its variable costs.
a. One statement is true.
b. Two statements are true.
c. Three statements are true.
d. Four statements are true.
4. (Only two choices here!) If this firm produces four units of output then:
a. Its total costs are equal to $64.
b. Its average fixed cost is greater than its average variable costs if it produces 6 units of output.
5. Consider the distance from point B to point A in the above graph. What is this distance equal
to?
a. The length of this distance cannot be determined from the provided information.
b. This distance must be greater than $2 per unit and less than $3 per unit.
c. This distance must be greater than $3 per unit and less than $4 per unit.
d. This distance must be greater than $1 per unit and less than $2 per unit.
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