Economics 309, Spring 2007, Midterm Examination, Professor Steven Hackett
Each question on this exam is worth 3 points. Name (1 point): Answer Key
|
Price ($) |
Quantity Supplied |
Quantity Demanded |
|
5 |
100 |
1,500 |
|
10 |
200 |
1,400 |
|
15 |
300 |
1,300 |
|
20 |
400 |
1,200 |
|
25 |
500 |
1,100 |
|
30 |
600 |
1,000 |
|
35 |
700 |
900 |
|
40 |
800 |
800 |
|
45 |
900 |
700 |
|
50 |
1,000 |
600 |
1. What is the equilibrium
price $_40_ and quantity _800_ in the table above?
2. At what price in the table
above is there an excess demand of 600? $_25_
3. True/False (circle one): If there are four policy options for managing a parcel of Bureau of Land Management land, then the opportunity cost of the preferred option is the SUM of the net benefits of all the other three options.
4. True/ False (circle one): The likely consequences of an action determine the ethics of the action under deontological ethics.
5. True/ False (circle one): Scarcity, and thus economics, is entirely an artificial construct created by corporate enterprises, and does not exist in socialist or communist societies.
6. True/ False (circle one): As the term is used in this class, economic rationality requires that people conform to the preferences and materialistic tendencies of the dominant consumer culture, rather than follow their own preferences.
7. True/False (circle one): A public policy that is Kaldor-Hicks efficient can be made to be Pareto efficient if the policy “winners” are able to fully compensate the policy “losers.”
8. True/False (circle one): The requirements for a well-functioning competitive market include a system of property rights and a large number of small producers of goods and services.
9. True/ False (circle one): The Brundtland Commission Report, also known as Agenda 21, defines sustainability as a set of policies that are designed to meet the basic human needs of people seven generations in the future.
10. True/ False (circle one): An example of a component of earth’s natural capital stock would be the annual net increase in fish that can be sustainably harvested from a fishery in a given year, while an example of a component of the flow of useful ecosystem goods and services coming from natural capital stocks would be the total population of fish.
11. True/False (circle one): The economic value of the services that flow from social capital includes the reduced costs of resolving disputes, finding common ground, and securing “win-win” solutions to community problems.
12. True/ False (circle one): A country in stage IV of the demographic transition will have a population pyramid with a wide base and a narrow top, while a country in stage II will have a population pyramid that is square or shaped like an inverted pyramid.
13. True/ False (circle one): The Gini coefficient is a measure of equality of income distribution, and takes on values between -1 and 1. It is a quotient, with the numerator being the total area under the perfectly equal income distribution line, while the denominator is the area between the Lorenz curve and the perfectly equal income distribution line.
14. True/False
(circle one): Economist Amartya Sen
has found evidence that the education and empowerment of women, rather than
high levels of per-capita income, is the primary factor resulting in lower
total fertility rates in
15. True/ False (circle one): The purpose of the lending circle of five women in the Grameen microcredit model is to pool their assets (such as cars, houses, land, jewelry, and so forth) as a way of providing collateral required by banks in order to receive loans.
16. True/ False (circle one): Grameen Bank founder Muhammad Yunus also created the structural adjustment program, in which debtor countries restrict exports and foreign direct investment, and increase domestic health and education spending, as a way to protect small-scale domestic industry and increase human capital development.
17. True/False (circle one): The Genuine Progress Indicator is a weak sustainability indicator that adjusts components of a country’s gross domestic product for factors such as the cost of pollution damage and remediation, depletion of natural capital stocks, the value of unpriced household labor, and the degree of income inequality in a country.
18. True/ False (circle one): The Ecological Footprint is a strong sustainability indicator. The ecological footprint measures the amount of biologically productive land that is available for each person in a country. Thus the larger the Ecological Footprint, the more sustainable is the country.
19. True/False (circle one): Agenda 21 states that the major cause of the continued deterioration of the global environment is the high and unsustainable level of consumption, particularly in rich industrialized countries around the world.
20. True/False (circle one): Path dependence means that once a society has made durable investments in housing and transportation infrastructure built around cheap gasoline and private automobile transit, it is very difficult to reverse direction and create compact communities designed around public transit.
21. True/False (circle one): Extended producer responsibility programs provide firms with an incentive to “design for the environment” by reducing packaging and designing products that are cheaper to disassemble for reuse or recycling.
22. True/ False (circle one): The Shrimp/Turtle WTO case set a precedent by making it illegal for firms to affix ecolabels to their products, even when the ecolabel program is not used by government to restrict unlabeled imports.
23. True/False (circle one): Elinor Ostrom’s design principles for governance of common-pool resources (CPR’s) suggest that clearly defined CPR boundaries, graduated sanctions, dispute resolution mechanisms, and a recognized right to self-govern are attributes of CPR sustainability over time.
24. True/ False (circle one): The purchase of imported goods injects income into a local economy, while the export of local goods results in income leakages.
25. True/ False (circle one): Fodor argues that the cost per housing unit of providing public services is directly related to housing density. Thus low-density “sprawl” housing is cheaper and more sustainable for local jurisdictions to support with water, sewer, road, school, and other services.
26. True/False (circle one): Smokestack chasing (or microchip chasing) refers to a process whereby local economic development authorities compete with one another to attract a large base-industry employer, and compete by offering tax abatement and free infrastructure and site improvements.
27. Suppose that on average, workers in country A could produce either 100 units of clothing or 300 units of food, while on average workers in country B could produce either 400 units of clothing or 200 units of food. What are the total gains from complete specialization and trade in the combined two countries, relative to no trade and workers dividing their time exactly in half? Gain from trade = __150__ units of clothing and __50__ units of food.
28. Suppose that a new local company exporting sustainably harvested and FSC-certified lumber generates $100 million in export sales per year. Suppose that this company spent $50 million on inputs used to produce the lumber, and $30 million of these inputs were imported from outside the community (the other $20 million were locally sourced inputs). Then this company’s initial injection of income into the local economy is
$__70_ million.
29. Suppose that an economist found that of the $10 billion in consumption expenditures by residents of Bigfoot County, $4 billion of that total was spent on goods and services imported from outside the local community. Then the leakage rate for this local economy is equal to __40__ percent, and the multiplier implied by the data equals __2.5__.
30. True/False (circle one): A local economy can reduce its leakage rate by focusing economic development resources on local companies that inject income by exporting goods to consumers outside of the local economy, or by attracting “big box” retailers that sell low-cost consumer goods made elsewhere.
31. True/False (circle one): Higher discount rates help encourage firms and government agencies to make investments that have a large up-front cost and that generate a flow of benefits that may take many years to become fully realized.
32. True/False (circle one): Palco was an attractive takeover target for Maxxam because Palco’s logging operations were consistent with a discount rate far lower than the discount rates that prevailed in the broader equity market.
33. True/False (circle one): Dematerialization may allow some amount of economic growth to be sustainable by reducing the flow of material throughput associated with production and consumption.