Fall2022_EXAM1A

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University of Florida *

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2013

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Economics

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Feb 20, 2024

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NAME: _______________________________________ UFID: ________________________________________ ECO 2013 PRINCIPLES OF MACROECONOMICS MIDTERM 1 Form Code: A READ THE FOLLOWING INSTRUCTIONS!! 1) There are 40 questions on this exam. Each question is worth 2.5 points. It is your responsibility to ensure that your exam has all 40 questions. You have 75 minutes (from the time the Proctors announce the start of the exam) to finish. 2) Be sure to complete your Scantron answer sheet properly. This includes filling in all the bubbles for your name and UFID and signing the Scantron. Grades that must be entered manually due to an incorrectly completed answer sheet will be penalized 5 percentage points. You may fill in your name and UFID while waiting to start the exam. 3) Answers marked on the Scantron answer sheet are final. If you forget to bubble in an answer or mistakenly bubble in the wrong one, that is your responsibility. 4) You may use a hand-written 3x5 inches notecard. It may be printed on both sides, but cannot have any foldout portions. 5) Aside from your notecard, this test is closed book/closed notes. You may use a four-function or scientific calculator during the exam. As specified in the syllabus and in class, all other devices (including PDAs and Smartphones) are strictly forbidden. The answer key and your grades will post in Canvas within four days of this exam date. All emails should be directed to the grader. By signing the scantron form, you agree that you will abide by the University of Florida’s Student Honor Code, that you will not accept or provide help that has not been expressly permitted by Professor Knight or the TA team, and that you understand that failure to comply with these policies will result in disciplinary action.

2 1. Professor Rush spends his Saturday afternoons knitting mittens and making homemade cat food. He currently produces 35 pairs of mittens and 42 pounds of homemade cat food each Saturday. He could produce additional mittens without producing less cat food. Professor Rush is currently producing ____ its PPF. A. inside of B. beyond C. along D. There is too little information to answer this question. 2. Professor Rush spends his Saturday afternoons knitting mittens and making homemade cat food. He currently produces 35 pairs of mittens and 42 pounds of homemade cat food each Saturday. His opportunity cost of producing an additional pair of mittens is ____. A. 5/7 pound of cat food B. 1.4 pounds of cat food C. 35 pounds of cat food D. 42 pounds of cat food E. There is too little information to answer this question. 3. A point that lies beyond the PPF is ____. A. attainable, but not productively efficient B. attainable and productively efficient C. unattainable For Questions 4 & 5, refer to the table below. Quantity of Tulips Quantity of Roses Point A 200 bouquets 750 bouquets Point B 400 bouquets 600 bouquets Point C 600 bouquets 450 bouquets Point D 800 bouquets 300 bouquets 4. The table above represents the PPF between Tulips and Roses. As you move from Point B to Point C, the opportunity cost of producing an additional bouquet of tulips is ____. A. 1/2 bouquet of roses B. 3/4 bouquet of roses C. 1 bouquet of roses D. 1.33 bouquets of roses E. 2 bouquets of roses 5. True or False: The PPF between Tulips and Roses in the previous question represents increasing opportunity costs. A. True B. False

3 6. Which of the following factors does NOT shift or rotate the PPF outward? A. An increase in the amount of physical capital B. An increase in human capital C. Reductions in unemployment D. Technological innovation E. All of these factors shift or rotate the PPF outward. 7. Consider the linear PPF between burritos and pizza. The quantity of burritos is measured along the horizontal axis, and the quantity of pizza is measured along the vertical axis. New physical capital that affects only the production of burritos rotates the PPF outward. The PPF becomes ____, and the opportunity cost of producing an additional burrito ____. A. steeper; rises B. steeper; falls C. flatter; rises D. flatter; falls 8. Gerardo can produce 25 blueberry cobblers or 20 corn casseroles. Marcio can produce 10 blueberry cobblers or 15 corn casseroles. ____ has an absolute advantage in producing blueberry cobblers, and ____ has a comparative advantage in producing blueberry cobblers. A. Gerardo; Gerardo B. Gerardo; Marcio C. Marcio; Gerardo D. Marcio; Marcio 9. The Law of Supply states that ____. A. as the price of a pizza rises, the supply of pizzas increases B. as the price of a pizza falls, the quantity of pizzas supplied increases C. the supply curve is downward sloping. D. as the price of a pizza falls, the supply of pizzas decreases E. as the price of a pizza falls, the quantity of pizzas supplied decreases 10. The price of tortillas used to make tacos rises. As a result, the equilibrium price of a taco ____, and the equilibrium quantity of tacos ____. A. rises; increases B. rises; decreases C. falls; increases D. falls; decreases 11. The United States imports shirts from abroad. This implies that the world price of shirts is _____ the domestic “no trade” price of shirts. A. above B. below C. either above or below

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4 For Question 12, refer to the graph below. 12. Refer to the PPF above. The opportunity cost of producing an additional scoop of coconut ice cream is highest at ____. A. Point A B. Point B C. Point C D. Point D 13. Wood boards and mulch are substitutes in production. When the price of mulch rises, the equilibrium price of a wood board ____, and the equilibrium quantity of wood boards ____. A. rises; increases B. rises; decreases C. falls; increases D. falls; decreases 14. Chicken noodle soup is an inferior good. When consumers’ incomes fall, the equilibrium price of chicken noodle soup ____, and the equilibrium quantity of chicken noodle soup ____. A. rises; increases B. rises; decreases C. falls; increases D. falls; decreases

5 15. A study in the New York Times reports that working out reduces blood pressure and improves overall health. In response, the equilibrium price of a gym membership ____, and the equilibrium quantity of gym memberships ____. A. rises; increases B. rises; decreases C. falls; increases D. falls; decreases 16. Hot dogs and hot dog buns are complements. When the price of hot dog buns rises, there is a ____ of hot dogs at the initial equilibrium price, and the price of a hot dog should ____ in response. A. shortage; rise B. surplus; rise C. surplus; fall D. shortage; fall 17. Flour is used to make pasta. When the price of flour rises, there is a ____ of pasta at the initial equilibrium price, and the price of pasta should ____ in response. A. shortage; rise B. surplus; rise C. surplus; fall D. shortage; fall 18. When the government sets a price floor above the equilibrium price, the quantity of the good that is bought and sold ____, and a deadweight loss is ____. A. decreases; not created B. increases; created C. increases; not created D. decreases; created E. None of these answers is correct 19. Which of the following is the best example of a tariff? A. a tax placed on all residential air conditioners sold in the domestic market to help offset the impact of emissions on the environment B. a subsidy from the U.S. government to domestic manufacturers of residential air conditioners to enable them to compete more effectively with foreign producers C. a $150 fee imposed on all imported residential air conditioners D. a limit on the quantity of residential air conditioners that can be imported from a foreign country 20. True or False: When two consumers purchase the same product, they receive the same amount of consumer surplus if they pay the same price. A. True B. False

6 For Questions 21 & 22, refer to the graph below. 21. Refer to the graph above. When this market is in equilibrium, ____ of consumer surplus and ____ of producer surplus are generated. A. $8,000; $4,000 B. $4,000; $4,000 C. $16,000; $8,000 D. $8,000; $2,000 E. $4,000; $2,000 22. Refer to the graph above. When the price of a pair of headphones is $400, there is a ____, and ____ will be bought and sold. A. shortage of 50 pairs of headphones; 30 pairs B. surplus of 120 pairs of headphones; 40 pairs C. surplus of 120 pairs of headphones; 20 pairs D. surplus of 50 pairs of headphones; 30 pairs E. shortage of 120 pairs of headphones; 20 pairs 23. According to the Demand and Supply Model, a minimum wage set above the equilibrium wage _____ employment and _____ a deadweight loss. A. increases; creates B. increases; does not create C. reduces; does not create D. reduces; creates Price Quantity of Beats x Kim Kardashian Headphones (in pairs) 60 20 80 100 40 120 140 $100 $200 $300 $400 $500 $600 $700 Demand Supply

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7 For Question 24, refer to the table below. Price Quantity of Strawberry Ice Cream Demanded Quantity of Strawberry Ice Cream Supplied $1.50 400 pints 340 pints $2.00 380 pints 380 pints $2.50 360 pints 420 pints $3.00 340 pints 460 pints $3.50 320 pints 500 pints 24. Refer to the table above. When the government imposes a price ceiling at $1.50 per pint, there will be a ____ of strawberry ice cream, and ____ pints will be bought and sold. A. shortage; 340 B. surplus; 360 C. shortage; 400 D. surplus; 420 E. None of these answers is correct For Question 25, refer to the graph below. 25. Refer to the graph above. The price of a popsicle is currently $2.50. The firm that sells the 100 th popsicle receives ____ of producer surplus by selling that popsicle. A. $0.50 B. $1.00 C. $1.50 D. $2.00 E. $2.50 Price Quantity of Popsicles 150 50 200 250 100 300 350 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 Supply

8 For Question 26, refer to the graph below. 26. The figure above depicts a tax in the market for gasoline. After the imposition of the tax, consumers must pay ____ more per gallon of gasoline, and sellers will receive ____ less per gallon of gasoline. A. $1.50; $0 B. $0.50; $0.50 C. $0.50; $1.00 D. $0.75; $0.75 E. $1.00; $0.50 27. Price gouging laws that are imposed before a hurricane are an example of a(n) ____. A. price ceiling B. excise tax C. price floor D. ad valorem tax 28. A tariff is a tax on ____ that ____ domestic consumers and ____ domestic producers. A. imports; benefits; benefits B. exports; harms; benefits C. imports; harms; benefits D. exports; harms; harms E. exports; benefits; benefits 29. True or False: The equilibrium price of a Bad Bunny concert ticket is $850. The initial face value of a ticket is $225. At the initial face value, there is a surplus of tickets. A. True B. False Price Quantity of Gasoline (in gallons) 150 50 200 250 100 300 350 $1 $2 $3 $4 $5 $6 $7 Demand Supply + Tax Supply

9 For Questions 30 & 31, refer to the graph below. 30. Refer to the graph above. The government imposes a price ceiling at $8 per Uber ride. As a result, the quantity of Uber rides bought and sold decreases by ____, and there is a ____. A. 100 rides; shortage of 150 rides B. 150 rides; surplus of 100 rides C. 50 rides; shortage of 150 rides D. 150 rides; surplus of 150 rides E. 100 rides; shortage of 100 rides 31. Refer to the graph above. The government imposes a price ceiling at $8 per Uber ride. As a result, the amount of consumer surplus ____, and the amount of producer surplus ____. A. increases by $200; decreases by $400 B. decreases by $50; decreases by $700 C. decreases by $200; decreases by $400 D. increases by $700; decreases by $50 E. increases by $400; decreases by $200 32. When a country imports a good, total surplus ____. When a country exports a good, total surplus ____. A. increases; decreases B. increases; increases C. decreases; decreases D. decreases; increases Price Quantity of Uber Rides 150 50 200 250 100 300 350 $4 $8 $12 $16 $20 $24 $28 Demand Supply

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10 For Questions 33-36, refer to the graph below. 33. Refer to the graph above. If the world price of a mango is $0.50, domestic consumers will purchase ____ mangos, and ____ mangos will be ____. A. 100; 150; imported B. 25; 250; imported C. 150; 100; exported D. 25; 225; imported E. 100; 250; exported 34. Refer to the graph above. The world price of a mango is $1.00, and the government imposes a tariff of $0.50 per mango. After the imposition of the tariff, domestic consumers will consume ____ mangos, and the tariff will ____ the quantity of imports. A. 150; reduce B. 150; increase C. 50; increase D. 50; reduce E. 75; reduce 35. Refer to the graph above. The world price of a mango is $1.00, and the government imposes a tariff of $0.50 per mango. After the imposition of the tariff, consumer surplus is ____, and producer surplus is ____. A. $56.25; $112.50 B. $225; $112.50 C. $87.50; $92.50 D. $112.50; $56.25 E. $92.50; $87.50 Price Quantity of Mangos 150 50 200 250 100 300 350 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 Demand Supply

11 36. Refer to the graph above. The world price of a mango is $1.00, and the government imposes a tariff of $0.50 per mango. The tariff creates a deadweight loss of ____. A. $3.50 B. $6.25 C. $9.75 D. $12.50 E. $18.75 37. Sally has additional free time this evening. She ranks her alternative ideas for what to do during that free time: first, go to the movies; second, get an extra hour of sleep; third, study for an additional hour. What is Sally’s opportunity cost of going to the movies? A. an extra hour of sleep B. an extra hour of studying C. an extra hour of sleep and an extra hour of studying D. None of the above 38. When the price of a good or service is below the equilibrium price… A. the quantity demanded exceeds the quantity supplied, creating a surplus. B. the quantity demanded exceeds the quantity supplied, creating a shortage. C. the quantity supplied exceeds the quantity demanded, creating a surplus. D. the quantity supplied exceeds the quantity demanded, creating a shortage. 39. The production possibilities frontier is downward-sloping, which illustrates _____. A. that not all resources are equally suited to produce all goods. B. that producing goods requires many of society’s scarce resources. C. that countries face tradeoffs. D. that opportunity costs are generally increasing. 40. True or False: Professor Knight tried to make friends with Lizzo at her concert in Tampa this week. He thinks they would be obvious besties. All answers to this question will be accepted. A. True B. False

Fall2022_EXAM1A

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