secondmidtermafternoonspring2019versiono...
secondmidtermafternoonspring2019versiononewithanswers.pdf-Economics 101 Name _____________________________ Spring 2019
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secondmidtermafternoonspring2019ver...
secondmidtermafternoonspring2019versiononewithanswers.pdf-Economics 101 Name _____________________________ Spring 2019
##### Page 9
9
Use the following information to answer the next TWO (2) questions.
Consider the market for kiwis in the small open economy of Aussieland. This market is
characterized by the following, where Q is quantity of kiwis, and P is the price of a unit of kiwis
in dollars:
Domestic Demand: P = 1,000
(1/2)Q
Domestic Supply: P = 2Q
World Price = \$100
12. What is the quantity of kiwis that will be imported or exported into Aussieland when the
market for kiwis is completely open to trade in Aussieland?
a.
350 kiwis will be imported.
b.
1750 kiwis will be exported.
c.
1400 kiwis will be imported.
d.
700 kiwis will be imported.
13. Suppose now that Aussieland
’s dictator has a vested interest in the domestic
kiwi market and
decides to impose an import quota of 250 kiwis. What is the deadweight loss associated with this
policy?
a.
\$400,000
b.
\$180,000
c.
\$720,000
d.
\$450,000

##### Page 10
10
Use the following information to answer the next TWO (2) questions.
Yuchi has \$30 available to spend on hamburgers (H) and chips (C). The price of a hamburger is
\$6 and the price of a package of chips is \$3.
Yuchi
’s Utility Funct
ion: U= 3*(H)*(C)
Marginal Utility of Hamburgers = 3*(C)
Marginal Utility of Chips = 3*(H)
14. Given this information and holding everything else constant, what it the maximum utility that
Yuchi can have from hamburgers and chips?
a. Utility = 13.5 utils
b. Utility = 24 utils
c. Utility = 36 utils
d. Utility = 37.5 utils
15. Suppose
Yuchi’s income increases to \$45
. Given this information and holding everything
else constant, are hamburgers and chips normal or inferior goods for Yuchi?
a. hamburger is an inferior good and chips are a normal good
b. hamburger is a normal good and chips are an inferior good
c. both goods are normal goods
d. both goods are inferior goods
16. (Just two choices here!) Which of the following statements is true?
a.
b.
beneficial to domestic consumers.

##### Page 11
11
DO NOT DETACH THIS SHEET FROM THIS EXAM BOOKLET! EXAM
CONTINUES ON NEXT PAGE

##### Page 12
12
17. Consider a specific market in a small economy where the domestic equilibrium price for the
good is greater than the world price for that good. Suppose the small economy is debating three
policies with regard to this specific market:
(1) opening this market to trade while simultaneously implementing either an import
quota or tariff on this good,
(2) keeping this market completely closed from trade, and
(3) completely opening this market to trade with no implemented quotas or tariffs.
Which of the following statements is true? (Note: (1) > (2) > (3) means policy (1) is the most
preferred, policy (2) is the second-most preferred, and policy (3) is the least-preferred.)
a.
Consumers prefer (1) > (2) > (3). Producers prefer (3) > (2) > (1).
b.
Consumers prefer (3) > (1) > (2). Producers prefer (2) > (1) > (3).
c.
Consumers prefer (1) > (3) > (2). Producers prefer (2) > (3) > (1).
d.
Consumers prefer (2) > (3) > (1). Producers prefer (1) > (3) > (2).
18. In the market for calendars the demand curve is given by the following equation where P is
the price in dollars and Q is the quantity of calendars:
Market Demand Curve: P = 2100
(1/28)Q
Suppose the goal of the firm providing calendars to this market is to maximize their revenue.
Then given this information and holding everything else constant, this firm should produce:
a. (1050)(28) calendars.
b. 1050 calendars.
c. 28 calendars.
d. (75)(1050) calendars.
19. Suzy reports that she prefers football to baseball and baseball to soccer. Then she tells us that
she prefers soccer to football. Given this information and holding everything else constant,
Suzy's preferences are:
a. logically consistent.
b. inconsistent.
c. easily represented by normal indifference curves.
d. best captured by the way we draw her budget line.

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