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ECON 103 Microeconomics Sample Exam

by: Shelbyisfetch

ECON 103 Microeconomics Sample Exam Econ 103

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I took Prof. Boudreaux's class last semester and wasn't happy with my final grade, so I'm retaking it. So, I have all three of the exams he gave last semester with correct answers. He bases grades ...
Microeconomic Principles
Dr. Donald Boudreaux
Study Guide
Economics, Microeconomics, Econ 103
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This 7 page Study Guide was uploaded by Shelbyisfetch on Thursday January 21, 2016. The Study Guide belongs to Econ 103 at George Mason University taught by Dr. Donald Boudreaux in Summer 2015. Since its upload, it has received 517 views. For similar materials see Microeconomic Principles in Economcs at George Mason University.


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Date Created: 01/21/16
.. I /) ' ) ; 'j -( •' j ) /_....,. Economics 103 (Principles ofMicroeconomics) Exam 1 Donald J. Boudreaux Spring 2015 INSTRUCTIONS: Answer all30 questions on your scantron sheet - inpencil. Write your name and G-number clearly on your scantron sheet. Return to me only your scantron sheet;you ){eep thisexam and bring it withyou to our nextclass for you to use when we review this exam. Good luck! 1. Which of the following isamong thereasons identifiedby Adam Smith for why the division of labor increasesan economy's totaloutput? a.specialized workers are happier than are non-specialized workers b. specialized workers each work on tasks for which they each have a comparative advantage c.specialized workers follow instructions better than do non-specialized workers .specialization of workeris more likelyto encourage the development ofmachinery to perform specialized tasks 2.The name of tractors, buildings, and other goods that are built only because these goods are useful inthe production of other goods or services is a. raw materials b. natural resources c. consumption goods @ capitalgoods e. no.eof the above 3. Which of the supply curves (below) is the most elastic of thewo? A- • • 4. Which of the following willnot cause the demand for tickets to attend (inperson, at stadiums) professional football games to fall? � fall inonsumers' incomes if tickets toofessional footballames is anor1nal good; b. rise in thericeof tickets to professional baseballes, iftickets tprofessional "'--, baseballgames and tickets to professional footbagames are substitutegoods; .a falin the price of tickets to professional baseball games, ifts tprofessional �. baseballgames and tickets to professional football games asubstituteoods; ���·' loss of interest among consumerin followingand watching professionalfootball. 1 r "\a ()\)� ( 1$ �U(\ � tt- >'j\;,i°"5 t-iU tj r , �im{, ·ro o.clJ"&t)1\ttas+icity of demand ')1 5. Which of the following is most likely to increase the elasticity for tic ets to attend · games ofprofessional football? • .f he creation of a new, popular spectator SJ?Ortalled 'feetba11,'which isa good 'JI substitute, in the eyes of many sportsfans, for professional football.· � b. A huge cut - by about 95 percent - in theprices of tickets togames of professional 1 football with no fallin consumers' incomes. A huge increase in consumers' incomes with no change in the prices of ticketstogame '� of professional football. d. None of the above will increase the elasticity of demand for ticketstoattend games of professional football. 6.People in an economy without moneymust conduct all exchanges by usinga process called . a. gold b. warehousing c. arter . trolling · 7. In the production-possibilities graph below, which point is impossiblefor this economy to achieve today? 8.Adam Smith argued that the chief cause of the high and growing material � osperity (the ''wealth of nations'') is a.he division oflabor .....powerful gove rnment regulationto raise the incomes ofpoor people c. barter d. self-sufficiency of each household 9. Sam observed that the sun rose afterthe rooster crowed. From thisobservation Sam concluded that a crowing rooster causes the sun to rise. Sam commits the adhominem fallacy. b. ommits the post hoc, ergo propter hofallacy ' . commits the fallacy ocomposition .commits the naturalistifallacy is correct. 2 . ... : : ..... . .: 10. If tortilla chips and guacamole are complementary goods (for each other), which of the foilowing events will cause the demand for tortilla chips to rise? a. a fall in the price of tortillahips �tlci �CJUC/ } a rise in the price of tortillahips c. fall inthe price of guacamole ')( a rise in the price of guacamole 11. Suppose that tortilla chips and potato chips ubstitut goods (for each other). Which of the following can cause the demand for potato chips tofall? a.a fall in the price of tortilla chips a rise in the price of tortillaips c. a fall in the price of potatohips j( a rise in the price ofpotato chips 12. Suppose that potato chips are an inferior good. Which of the following will cause the demand for potato chips to rise? .,a fall in consumers' incomes b. rise in consumers' incomes --- --.'bC .a fall in the price of potato chips d. a rise inthe price of potato chips � there is more than one correct answer listed above 13. Ifthe price of the raw material bauxite, used to make aluminum foil rises, . � a.the supply curve of aluminum foil will shift to the left ..'b.,the supply curve of aluminum foil will shift to the right ,,,-there will be a movement upward along an existing supply curve of al umin um foil d. ere will be a movement downward along an existing supply curve of aluminum foil Ifaluminum foil and heavy-duty plastic freezer bags are substitute goods (for each ther), then the higher price of bauxite used to make aluminum foil will a. cause e price of heavy-duty plastic freezer bags to fall b. cause the rice heavy-duty plastic freezer bags to rise c. have no pre ·ctable effecton the price of heavy-duty plastic freezer bags. \ If aluminum oil is a normal good, then ceterisparibus, a rise in consumers' incQ: es will result in a(n) price for aluminum foil. a.highe b.lower c.unchanged ' 16.The fact that emand curves slope downward to the right - that is, the law of __...and - is explained by the a law of diminishing marginal utility. returns. )K law ofdiminishing marginal » rinciple of comparative advantage . .elasticityof demand. 3 • 17. According to my definition,n classof economists' meaningof ''self-interest,'' which of the followinisinconsistent with thataning? a. A children. mothersacrifices her ltosave the liof oneof her b. A mothersacrifices her lto save thlives ofeveralofherchildren. lorence inConnecticutcontributes5.00to acharitythathelpspoor peopleinAfrica. than to X G loriin Nigeriagivesherlastmorselof foodto astrangeracrosstown rather her own starving child. 18.Jacquelyn has transitivpreferences � if she'd prefer to Aaron ratherthanBrett;prefer toateBrettratherthan Chuck; and preferto date Chuckrather thanron. b.ifshe'dprefertodateAaron ratherthanBrett;prefertodateBrettratherthanChuck; and prefer to date Aaron ratthanChuck. X only if shever changesher preferences. ·--> )< Thisquestion is meaningless, as only groups (rather than indican have «: transitive preferences. suppl of wooden chairs to rise? 19.Which of the following events will cause th a. A falln the demand for wooden chairs. b.A risein the demand fowooden chairs. --"": Aise in the price of wood used to make woodenirs. d.A fall in the price of wood used to make woodenirs. - "2o If wooded chairs and �till chairare substitutes forach other, whichof the folio ·ng statements is correct? a.A fall ·the price ofood used to make wooden chairs will result in a higher dem for metal chairs. b.A rise in the ·f ofwood used to make wooden chairs will result higher demand dr etal chairs. c.A rise in th price oood used to make wooden chairs will result lower s�p1y of metal cfi ·rs. d.A falln the price of woo sed to makewooden chairs will result lower / supply of metal chairs. 21. True or false:he elasticity of demand for any good or servicenerally remains unchanged as you move up or down a demand curve. a. True o,\o\ S lJppl f ,b. alse Obove_. Oc.1rY\C\r'\d c.urv-e rn \ dpoit).tJ � I = e 1a5-\-·c '" LYeos\s < l-= \n�l O�"r\C 'L \as r' c \·ry 4 • 22. On which of the two demand curves (depicted below) is demand relatively more •. elasticat any given price? a.A b. B questionwithout further information. c. Impossible to answer this ' 23.Which of the following formulas do economists use to calculate the elasticityf demand for any given change in price? @rr = %i'.lQd+ %Af> T= %AQd + P T= P + %i'.lQd d.T= %M + %ilQd 4.Which of the following is an example of the fallacy of composition? ·(t(his new pair of shoesand concludes, therefore,that his wife shouldbuy ;J<;_ firself new pair of shoes. ' b. u · sthis job one month after President Obama was sworn into office. He "''"'ncludes, therefore, that President Obama's policies caused hisss. e rejectslvis's argument that America is good country to livein; George reasons thatElvis's argumentabout America can't be trustedbecause Elvisis an • mer1can. ngo can find his luggage at the airpomore easily by painting eachpiece of his luggage fluorescent green.He concludes, therefore, that everyone would have an easier time fmding their luggage at airports if everyone painted their luggage fluorescent green. �. Which of the following is implied by the fact that individuals make choices? hat each choicenecessarily ismade at the margin. b. Thateach choice necessarilyentails - that is, has associated with it - a cost. � c. That each choice isither objectively rigor wrong. d. That eachchoice is made only toincrease the chooser's monetary wealth. • 5 • 26E conomisscallhe prce atwhichquantiy demanded and quanitysuppled ae _. .......seach oher the - ,,equilibriumice b.theu tprie c.thediequilibriumice d.theunjustrie 27.W hichofthefolowinggraphs depctsanincreae n suppy? 5/ p $ C . ;-�-� ------ . v1.- ----Gt_ o'- --------------- 28.W hichofthefolowing gaph sdepctsa dcreaseindem and? D lr------ D-� }f' �- ---- ,, -��,- ---- II I Dv ,... BJ i D 0 c·-- - - - 4 .(; ""'-., 6 i - - � �.---- -- - .. '.. l 29·An increasein thenumber a. ause of buyers inthemarket forreading glasseswill the market demand curve for readinglasses tohiftoutward. ·cause themarket demand curve forreadingglassestoshiftinward. causeeach individual'demand forreadingglassestoshiftoutward. causeeach individual'demand forreadingglasses tohiftnward. 30.If Paddy spends all of his time producing waffles, he can pro3,000 waffles per week. If,insteadhe spends all obis timegrowing strawberries, he can grow 300pints of strawberrieper week. If Thomas spends all of his time producing waffles, he can produce1,000waffles per week. If, insteahe spends alJ ofis time growing strawberries, he can grow200 pints of strawberries per week. Which of these two personshas a comparative advantage (compared to the other)at .-uroducing strawberries? a.Paddy .Thomas c. Thereisinsufficient info1matioanswer this question. 'NV\ffl� Stm "NYJtrrteJ 3 00 3 co � �LO 00 0 3 l 000 200 lD00/20Q .\om<" 7


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