What import quota would achieve the governments goal

Assignment Help Microeconomics
Reference no: EM131023662

First Midterm - I

I. BINARY CHOICE QUESTIONS:

1. The line y = 5x - 13 does NOT cross

a) point (6,17)

b) point (3,8)

2. "The government must keep interest rates stable," is an example of a

a) positive statement

b) normative statement

3. What do we call data on the daily stock price of Samsung from 2005 to 2010?

a) Time series data

b) Cross-sectional data

4. GNP is the total value of expenditures during a given year within a country's borders.

a) True

b) False

5. Holding everything else constant, a decrease in Nissan car prices will cause

a) An increase in demand for Honda cars

b) A decrease in demand for Honda cars

6. Holding everything else constant, if the US government decides to raise the minimum wage, this will likely result in a shortage of workers.

a) True

b) False

7. Indeterminacy in prices occurs when

a) The supply and demand curves shift in the same direction

b) The supply and demand curves shift in opposite directions

8. Luke studies both history and philosophy with constant opportunity costs. If he spends all week on history, he can read 200 pages. If Luke wants to read 10 more pages of philosophy, he has to give up 20 pages of history. By the end of the week, Luke reads 124 pages of history and 58 pages of philosophy. Is Luke's weekly study plan efficient?

a) Yes

b) No

Use the information below to answer the next 2 questions. The following graphs show the PPFs of the US and France. Suppose that both countries face constant opportunity costs in the production of hats and printers.

1508_Figure.png

9. If the US and France decide to trade with one another, which of the following is true?

a) France will specialize in printers and the US will specialize in hats.

b) The US will specialize in printers and France will specialize in hats.

10. What is a possible consumption bundle for the US with international trade?

a) 180 printers, 330 hats.

b) 200 printers, 300 hats.

II. MULTIPLE CHOICE QUESTIONS:

11. Which of the following equations is a correct representation of the demand curve described in the graph below?

1230_Figure1.png

a) 30P = 200Q + 30

b) 200P + Q = 30

c) Q = -(3/20)P + 30

d) 20P + 3Q = 600

12. Choose values for the missing entries A and B in the table below, assuming that the demand and supply equations are linear.

Quantity demanded (Units)

Quantity supplied (Units)

Price (US$)

440

240

80

A

280

160

120

B

240

a) A = 280 and B = 320

b) A = 240 and B = 330

c) A = 200 and B = 340

d) A = 180 and B = 350

Belgium produces only three goods: chocolate, strawberries, and waffles.  Use the output information in the following table to answer the next question. Take 2010 as the base year.

 

2010

2011

 

Quantity

Price

Quantity

Price

Chocolate

20

$3

30

$4

Strawberries

75

$4

150

$2

Waffles

120

$5

110

$1

13. What was Belgium's growth rate of Real GDP from 2010 to 2011?

a) 29%

b) 5%

c) 12%

d) 45%

14. Suppose you are given the following information about an economy. The GDP deflator increased 20% from 2005 to 2006. Nominal GDP increased 44% from 2005 to 2006. What is the exact growth rate of real GDP between 2005 and 2006?

a) 16%

b) 20%

c) 24%

d) 28%

15. Consider an economy described by the following equations:

G = 100

X = M = 50

I = 250

T = 50

C = 200 + 0.9(Y - T)

where G is government expenditure, (X-M) is net exports, I is investment, T is the level of taxes, C is household consumption, and Y is output. What is the level of output, Y (GDP)?

a) 5550

b) 4500

c) 5050

d) 6200

Use the information provided in the table below to answer the next 3 questions. Assume that there are only three firms in the economy: Wisconsin Clothing Ltd., which produces clothing; Georgia Fabric Inc., which produces the various fabrics used in clothing production; and Texas Cotton Co., which grows the cotton needed for the production of fabric.

 

Wisconsin Clothing Ltd.

Georgia Fabric Inc.

Texas Cotton  Co.

Total factor income

Value of sales

$3200

$2000

$750

 

Intermediate goods

A

B

$0

 

Wages

$500

$1000

$400

C

Interest payments

$200

$25

$50

D

Rent

$400

$150

$200

E

Profit

$100

$75

$100

F

Total expenditures by firm

$3200

$2000

$750

 

Value added per firm

G

H

I

 

16. What is the GDP of this economy?

a) $5200

b) $5950

c) $1900

d) $3200

17. Using the "factor payments" approach to calculating GDP, which entries in the table would be added to compute GDP?

a) A and B

b) A, B, C, D, E, and F

c) C, D, E, and F

d) G, H, and I

18. Provided that we use the "value added" approach to calculating GDP, which of the following missing table entries are correct?

a) A=$2000, B=$750, G=$1200, H=$1250, I=$750

b) A=$2000, B=$1250, G=$2450, H=$1250, I=$750

c) A=$2750, B=$750, G=$1200, H=$750, I=$0

d) A=$2000, B=$750, G=$750, H=$1250, I=$750

19. In 2010, Tim bought 400 shares of AIG stock in the stock market through his broker. How would you describe the effect of Tim's stock purchase on GDP for 2010?

a) The value of the stock is counted in GDP; the value of the stock broker's services is counted in GDP.

b) The value of the stock is counted in GDP; the value of the stock broker's services is not counted in GDP.

c) The value of the stock is not counted in GDP; the value of the stock broker's services is counted in GDP.

d) The value of the stock is not counted in GDP; the value of the stock broker's services is not counted in GDP.

20. The market for books has two producers with individual supply curves P = 5 + Q and P = (1/2)Q, where P is price and Q is quantity supplied. What is the market supply curve for books?

a) P = 5 + (3/2)Q for all price levels

b) P = (1/2)Q for 0 ≤ P ≤ 5 and P = 5 + (3/2)Q for P ≥ 5

c) P = 2Q for 0 ≤ P ≤ 5 and P = 3Q - 5 for P ≥ 5

d) Q = 2P for 0 ≤ P ≤ 5 and Q = 3P - 5 for P ≥ 5

21. Use the table below to answer the following question:

2010 UW-Madison Rental Car Market

Price ($US / hour)

Quantity Demanded

Quantity Supplied

5

50

15

10

40

30

15

30

45

20

20

60

25

10

75

What is the equilibrium price for this market?

a) $12

b) $16

c) $20

d) $23

Answer the next 3 questions using the diagram below, which shows the domestic market for computers in a small economy. Assume that this economy is initially closed to international trade (autarky).

702_Figure2.png

22. The country opens its computer market to international trade and the world price for computers is $100. The increase in total surplus (consumer surplus + producer surplus) is equal to the area

a) E + F + G + H + I + J

b) C + E + F + G + H

c) E + F + G + H

d) I + J

23. Suppose that the government is considering an import quota on computers that would have the same effect on domestic total surplus as an import tariff of $50. What import quota would achieve the government's goal?

a) An amount equal to E + H

b) 40 units

c) 20 units

d) 10 units

24. After imposing an import tariff of $50, how much surplus does the economy as a whole lose (deadweight loss) relative to the free trade case?

a) $500

b) $750

c) $1000

d) $1250

25. A new technology is developed that increases the efficiency of the clothing industry. Assume that all other factors of production remain unchanged. The solid curve is the economy's PPF for cars and clothing before the change, and the dashed line is the PPF after the technology is adopted. Which of the following graphs is consistent with this scenario?

1832_Figure3.png

26. Find the total surplus (consumer surplus + producer surplus) for the following market economy.

Supply:  P = 15 + (1/2)Q

Demand:  Q = 30 - P

a) $50

b) $75

c) $100

d) $150

 Answer the next 2 questions using the table below, which shows the maximum amounts of coffee and rice that Cuba and Thailand can produce. Assume that both countries have constant opportunity costs of production.

 

Units of Coffee

Units of Rice

Cuba

60

30

Thailand

12

8

27. The opportunity cost of producing one unit of coffee for Cuba is:

a) Higher than the opportunity cost of producing one unit of coffee for Thailand

b) Lower than the opportunity cost of producing one unit of coffee for Thailand

c) The same as the opportunity cost of producing one unit of coffee for Thailand

d) 2 units of rice

28. Which of the following statements is true?

a) If Cuba and Thailand trade, Thailand will gain more from the trade because Cuba has the absolute advantage in both goods

b) If Cuba and Thailand trade, Cuba will gain more from the trade because Cuba has absolute advantage in both goods

c) If Cuba and Thailand trade, 0.6 units of rice would be a feasible price for coffee

d) If Cuba and Thailand trade, 1 unit of coffee would be a feasible price for rice

29. The figure below represents the production possibilities frontier for carrots and bananas.

1595_Figure4.png

The opportunity cost of moving from point A to point B (along the PPF) is equal to

a) 8 units of carrots

b) 16 units of bananas

c) 2 units of bananas

d) 12 units of carrots

30. The following table shows the PPF for milk and butter production in Wisconsin.

Milk

Butter

30

0

25

10

15

20

0

25

Assume that the PPF is linear between the points listed in the table. Which of the following production combinations is unattainable for Wisconsin (without international trade)?

a) 20 units of milk, 15 units of butter

b) 28 units of milk, 4 units of butter

c) 25 units of milk, 12 units of butter

d) 10 units of milk, 21 units of butter

Reference no: EM131023662

Questions Cloud

Solve each system by substitution : Solve each system addition method. Determine whether the equations are independent, dependent, or inconsistent.
What is the new equilibrium output level : What is the equilibrium level of Y? Is it consistent with your guess in the previous part - What is the new equilibrium output level?
Determine whether the equations are independent : Ticket sales. Tickets for a concert were sold to adults for $3 and to students for $2. If the total receipts were $824and twice as many adult tickets as student tickets were sold, then how many of each were sold?
Construct a confidence interval the wrong way : The paired measurements were collected on the same day within 30 minutes of one another; the data are given in the accompanying table. Construct a 95% confidence interval for the difference in mean number of negative interactions.
What import quota would achieve the governments goal : Suppose that the government is considering an import quota on computers that would have the same effect on domestic total surplus as an import tariff of $50. What import quota would achieve the government's goal
Share of concert ticket revenue : According to Alan Krueger, an economist at Princeton University, the share of concert ticket revenue received by the top 1 percent of all acts rose from 26 percent in 1982 to 56 percent in 2003.
Express the revenue r as a function of x : Bill invests in a plan that has an APR of 3%. He invests four times as much in a plan that has an APR of 8%. If the total interest from the investments is $805 after one yaer, how much was invested in each plan?
Describe how you would make this judgment : Does the reported summary give enough information for you to judge whether the individualized dosing is, on the whole, accurate in its prediction of peak concentration? If so, describe how you would make this judgment. If not, describe what additi..
Draft a performance action plan for a company to follow : Draft a performance action plan for a company to follow when providing discipline in response to complaints of sexual harassment. Use the Library or other Web resources if needed.

Reviews

Write a Review

 

Microeconomics Questions & Answers

  Provide the highest level of marginal utility per dollar

When the product demand curve is Q = 130 - 20P, and price is increased from P1= $4 to P2= $6,the arc price elasticity of demand is:

  Which occupations in decline can be linked to technological

Which occupations that are forecast to grow can be linked to technological change? Which can be linked to demographic change-in particular, the aging of the U.S. population?

  What is the differences between sticky

What is the differences between sticky and flexible prices in the aggregated income or expenditure?

  How management can best maintain the balance

Explain how the marginal product of labor and the marginal product of capital are used in decision-making. Take into account how productive each is per dollar spent and make up your own example of the balance.

  What are menu costs

What are menu costs? How has the widespread use of computers and the Internet affected menu costs? If menu costs were eliminated, would the short-run aggregate supply curve be a vertical line? Briefly explain.

  A risk adverse individual

A risk adverse individual has to choose among $100 with certainty and a risky option with two equally likely outcomes, $100-x and $100+x. Use graph or math to show that this person's risk smaller, the smaller x is (the less variable the gamble is

  What is the new equilibrium level of income

What is the marginal propensity to consume in Freedonia, and what is the marginal propensity to save - What is the new equilibrium level of income?

  How do tcp and udp relate to ip

i. How do TCP and UDP relate to IP (Internet protocol)? Which of these pro- tocols are encapsulated within (or layered atop) one another? Could all three be used simultaneously?

  Decision to produce or shut down

Say half of the cost of producing wheat is rental cost of land (a fixed cost) and half is cost of labor and machines (a variable cost). If the average total cost of producing wheat is $8 and price of wheat is $6, what would advise the farmer to do..

  Strategic planning and management process

Effectively changing strategies is often one of the most difficult tasks of management. Why do you think this is the case?

  What price should the seller set

Suppose the seller and buyer are in a multiyear relationship. Each month, the buyer quotes a price and the seller selects her quantity. How might this change each player's behavior?

  A the food and drug administration classifies tobacco an

a. the food and drug administration classifies tobacco an addictive substance.b. the congress votes to raise the excise

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd