PDF Econ201Midterm

9/21/2014
Economics 201-University of Calgary Sanuja Senanayake
Return to Exams and Guides
Economics 201-University of Calgary

Economics 201 is the Principles of Microeconomics class. Depending on the Professor, the exams format may
or may not be multiple choice.
Question 1
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Which of the following best describes Microeconomics?
Economics (ECON 201-UCAL) Midterm Exam
The study of small industries and companies.
The study of household centered economic systems.
The study of overall production and consumption.
The study of behavior of individual agents and markets.
AN
Question 2
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When the production of goods are inadequate to fulfill the needs of a society, the
economy is ...
experiencing scarcity.
expanding.
most likely a Socialist one.
a failure.
most likely a Capitalist one.
Question 3
http://sanuja.com/blog/exams/econ201
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In Economics, the term capital is used to describe...
the amount of money grained from profits.
the amount of created resources.
the amount of money invested.
the main City in a country which produces the most goods.
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Question 4
In Circular Flow Diagram of physical and monetary flow, what is the input and output of
firms?
Input: revenue and resource services
Input: commodities and consumption
Input: commodities and consumption
Input: commodities and costs
Input: income and resource services
Output: commodities and costs
AN
Output: income and resource services
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Output: revenue and resource services
Output: revenue and resource services
Output: commodities and consumption
Question 5
What major limitation is not considered in Circular Flow Diagram of physical and monetary
flow?
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market fluctuations
capital costs
human resources
non-renewable resources
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Question 6
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The supply of Oranges exceeds the demand while the supply of Apples are hindered due
to weather. Which of the following statement is true about this particular market?
The price of Orange and Apples will decrease.
The inflation rate will increase due to the shortage of Apples.
s scarcity.
AN
The price of Orange will decrease as the Apples market is experiencing a
The price of Orange and Apples will increase.
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The price of Orange will increase as the Apples market is experiencing a

scarcity.
Question 7
What will eventually happen to an economy when resources are not allocated properly?
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It will result in slow rate of inflation growth.
It will result in a market failure.
It will experience scarcity.
It will experience a rapid growth.
It will result in larger income gaps between the rich and poor.
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Question 8
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In order to obtain a degree at the University of Calgary, you decided to give up your full
time job. What is the best statement that describe your situation from Economics point of
view?
The time spent on studying and attending classes is the opportunity cost
The time spent on studying and attending classes is the capital cost of
The lost time and money from a full time job is the opportunity cost of
The cost of obtaining an education is always beneficial compared to
The lost time and money from a full time job is the capital cost of
AN
of obtaining an education.
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obtaining an education.
having a low paying full time job.
Question 9
Canada was one of the few (if not only) countries to weather the financial crisis of 2007
08. What is the primary reason for Canada's success?
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Controls put in placed by the free market "invisible hand".
Proper Government regulations on the free market economy.
Mark Joseph Carney, the Governor of the Bank of Canada.

International trade agreements between Canada and other first world
nations, such as NAFTA.
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Question 10
example of what Economic property?
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The Alberta beef market to shrunk as during the Mad Cow Disease crisis. This is an
Externality causing the market to shrink during a crisis.
Market failure due to Alberta's monopoly on the beef industry.
Exogenous variables causing the market demand for beef to drop.
Endogenous variables causing the market demand for beef to drop.
An example of the "invisible hand" in action.
Question 11
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AN
What should be the unemployment rate of a sustainable and healthy Economy?
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15 - 20%
4 - 6%
30 - 35%
40 - 45%
0%
Question 12
What is Production Possibility Frontier or PPF?
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It is a mathematical model used for determining the inflation rate and its
It is a graphical representation of the relationship between the output of
It is a graphical representation of the maximum output obtain from a given
It is a mathematical model used for determining the inflation rate and its
It is a mathematical model used for calculating the per unit opportunity
relationship to the unemployment rate.
AN
products and the limited resources available to produce the products.
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unlimited resource base.
relationship to the economic growth.
cost for a given item.
Question 13
Based on the following table, what is the opportunity cost of moving from D to E?
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Situation
Capital Goods
Consumer Goods
2000
150
1750
300
1500
550
1050
700
500
950
550 capital goods
1050 consumer goods
550 consumer goods
150 capital goods
Question 14
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AN
There are several points posted on the following Production Possibility Frontier (PPF)
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graph. The most efficient points are indicated by which letter(s)?
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AN
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A and B
C and D
Question 15
graph. The most inefficient points are indicated by which letter(s)?
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A and B
C and D
Question 16
graph. The situation(s) that is/are impossible to attain, indicated by which letter(s)?
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A and B
C and D
B and C
Question 17
Based on the following table, what is the opportunity cost of moving from C to B?
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Capital Goods
Consumer Goods
2000
150
1750
300
1500
550
1050
700
500
950
300 Consumer Goods
150 Capital Goods
300 Capital Goods
1/2 Consumer Goods
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Situation
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Question 18
AN
Refer to the following diagram. The tax imposed is indicated by the neon-green vertical
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line. What is the consumer surplus without the tax?
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$700
$350
$3000
$1500
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AN
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Question 19
line. What is the producer surplus without the tax?
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$700
$800
$1500
$350
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AN
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Question 20
line. What is the total tax revenue?
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$57.5
$35.5
$650
$20
$710
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AN
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Question 21
line. What is the deadweight loss (DL) due to tax incidence?
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$710
$53.5
$375
$35.5
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Question 22
The absolute advantage is measured primarily by what factor?
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The capital needed to produce an item.
The added costs such as taxes and transportation fees.
The number of items produced.
The all inputs needed to produce an item.
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Question 23
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Increase in price of bread from $2.50 to $3.20 will increase the supply from 800 to 1250
2.00
1.79
2.31
0.55
1.55
Question 24
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AN
units. Using midpoint (arc) method, what is the elasticity of supply?
Given that the price elasticity of demand for a good is 4.5, what is the change in quantity
demanded if the price is increased by 15%?
0.675% increase
A
B
6.75% increase
67.5% increase
4.5% increase
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Question 25
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AN
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line. What is the total revenue without tax incidence?
$710
$800
$1600
$1150
$575
Question 26
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If the entire Production Possibility Frontier shifted to higher values, it is most likely caused
...technological breakthrough in one of the two goods.
...technological breakthrough in both goods.
...decrease in demand for one product over the other.
...increased in spending.
Question 27
...decrease in demand for the two products.
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by...
Which of the following product will have the most inelastic demand?
Automobiles
Oranges and bananas
Penicillin antibiotics
University education
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Question 28
AN
Higher price for hotdogs will most likely...
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...increase the demand for bananas.
...increase the demand for ketchup.
....increase the equilibrium quantity.
...decrease the demand for hotdog buns.
Question 29
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What is the best definition for producer surplus?
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The value of everything that a producer earns as a result of selling an
The amount a seller is paid by the buyer for a given item minus the
The difference between what the buyer's willingness to pay minus the
seller's cost.
AN
amount the buyer actually pays.
The amount a buyer would gain before the tax being paid.
Question 30
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item.
A government welfare system will increase the equity.
True
False
Question 31
The fall in total surplus as a result of market distortion is known as...
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...deadweight loss.
...a tax revenue loss.
...elasticity loss.
...efficiency loss.
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Question 32
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line. If the demand line is steeper(let's say the intercepts are 75 and 40 instead of 75 and
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85), then the demand is said to be more...
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...elastic.
...inelastic.
...artificial.
...distorted.
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Question 33
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Positive statements as opposed to normative statements attempt to describe the world as

it is.
False
True
AN
Question 34
Challenging a current market system with a new idea which may be better for the future
can be considered as a...
...positive statement.
...economic projection.
...market projection.
...negative statement.
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...normative statement.
Question 35
How do you calculate the consumer surplus on a Supply-Demand graph?
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It is the area above the Demand curve and under the market price.
It is the area under the Supply curve and above the market price.
It is the area above the Supply curve and under the market price.
It is the area under the Demand curve and above the market price.
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Question 36
Canada?
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Based on the following table, what is the opportunity cost of producing a unit of Jam for
Amount procuded in 24 hours
Cheese
Jam
Cheese
Jam
Canada
12
USA
4/3 Cheese
1/3 Cheese
1 Cheese
6 Cheese
3 Cheese
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AN
Hours needed for 1 unit
...
Question 37
Based on the following table, what is the opportunity cost of producing a unit of Jam for
USA?
Cheese
Jam
Cheese
Jam
Canada
12
USA
...
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4 Cheese
1/3 Cheese
3/4 Cheese
4/3 Cheese
1/3 Cheese
Question 38
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Based on the following table, Canada has the absolute advantage in...
Cheese
Jam
Cheese
Jam
Canada
12
USA
AN
...
....(cannot be answered due to lack of information).
...Jam and USA has an absolute advantage in Cheese.
...neither good and USA has an absolute advantage in Jam.
...neither good and USA has an absolute advantage in Cheese.
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...Cheese and USA has an absolute advantage in Jam.
Question 39
The price elasticity of supply is concerned with...
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...change in price due to change in quantity demanded.
...change in supply due to change in market competition.
...change in price due to change in market demand.
...change in supply due to change in market prices.
...change in supply due to producer's ability to fulfill the market demand.
Question 40
An effective ceiling price will result in...
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...shortage of good decrease in demand.
...will help the customers.
...shortage of goods and increase in demand.
...abundance of good and decrease in demand.
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Question 41
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If the number of hours you studied for Economics 201 increases your confusion of
concepts, you can say that studying have a...
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...no correlation.
...neutral correlation.
...random correlation.
...positive correlation.
...negative correlation.
Question 42
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Based on the following table, Canada has a comparative advantage in...

Cheese
Jam
Cheese
Jam
Canada
12
USA
AN
...
...neither and USA has a comparative advantage in Cheese.
...neither and USA has a comparative advantage in Jam.
...Jam and USA has a comparative advantage in Cheese.
...Cheese and USA has a comparative advantage in Jam.
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Question 43
Price control will most likely result in...
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...creating a fair and balanced economies.
...creating more competition hence reducing monopolies.
...hurting the consumers that needed the most help.
...helping the producers by generating more revenuer.
Question 44
Traditional economies.
Mixed economies.
Free economies.
Command economies.
Market economies.
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Question 45
AN
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The concept of "invisible hand" best applies to what kind of economies?
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Which of the following scenario will increase both the equilibrium price and quantity of an
inferior good?
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Decrease in consumer demand.
Increase in consumer income.
Increase in the number of substitution products.
Decrease in consumer income.
Decrease in the number of substitution products.
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Question 46
What would be the most likely result of rent control?
Higher rent with higher quality housing.
Higher rent with lower quality housing.
Lower rent with higher quality housing.
Lower rent with lower quality housing.
Question 47
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If the City of Calgary has a problem with overuse of public swimming pools, the best
solution to protect infrastructure is to...
...reduce the quality of pools and facilities.
...increase the maintenance budget.
...decrease the management costs.
...increase the usage fees.
Question 48
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Which of the following four graph (A, B, C, D) represents the market for Winter Coats in
Graph C
Graph B
Graph D
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the middle of Canadian Summer?
Graph A
Once you are finished, click the button below. Any items you have not completed will be marked
incorrect.
Get Results
There are 48 questions to complete.
Credits: Based on the excellent class notes provided by, Schlenker during Summer 2014.
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9/21/2014

Economics 201-University of Calgary Sanuja Senanayake

Return to Exams and Guides

Economics 201-University of Calgary

or may not be multiple choice.

Which of the following best describes Microeconomics?

Economics (ECON 201-UCAL) Midterm Exam

The study of small industries and companies.

The study of household centered economic systems.

The study of overall production and consumption.

The study of behavior of individual agents and markets.

most likely a Socialist one.

most likely a Capitalist one.

Economics 201-University of Calgary Sanuja Senanayake

In Economics, the term capital is used to describe...

the amount of money grained from profits.

the amount of created resources.

the amount of money invested.

the main City in a country which produces the most goods.

Input: revenue and resource services

Input: commodities and consumption

Input: commodities and consumption

Input: commodities and costs

Input: income and resource services

Output: commodities and costs

Output: income and resource services

Output: revenue and resource services

Output: revenue and resource services

Output: commodities and consumption

Economics 201-University of Calgary Sanuja Senanayake

The price of Orange and Apples will decrease.

The inflation rate will increase due to the shortage of Apples.

The price of Orange will decrease as the Apples market is experiencing a

The price of Orange and Apples will increase.

The price of Orange will increase as the Apples market is experiencing a

Economics 201-University of Calgary Sanuja Senanayake

It will result in slow rate of inflation growth.

It will result in a market failure.

It will experience scarcity.

It will experience a rapid growth.

The cost of obtaining an education is always beneficial compared to

having a low paying full time job.

Economics 201-University of Calgary Sanuja Senanayake

Controls put in placed by the free market "invisible hand".

Proper Government regulations on the free market economy.

Mark Joseph Carney, the Governor of the Bank of Canada.

example of what Economic property?

Externality causing the market to shrink during a crisis.

Market failure due to Alberta's monopoly on the beef industry.

Exogenous variables causing the market demand for beef to drop.

Endogenous variables causing the market demand for beef to drop.

An example of the "invisible hand" in action.

What should be the unemployment rate of a sustainable and healthy Economy?

Economics 201-University of Calgary Sanuja Senanayake

It is a graphical representation of the relationship between the output of

It is a graphical representation of the maximum output obtain from a given

It is a mathematical model used for calculating the per unit opportunity

relationship to the unemployment rate.

products and the limited resources available to produce the products.

unlimited resource base.

relationship to the economic growth.

cost for a given item.

Economics 201-University of Calgary Sanuja Senanayake

550 capital goods