ECON
309 Midterm Exam, Spring 2003 – Prof. Hackett
Each question on this exam is worth 4 points.
Part I: Basic Economics
Table 1: Supply and Demand Schedules
|
Price |
Quantity Demanded |
Quantity Supplied |
|
10 |
1000 |
100 |
|
20 |
950 |
200 |
|
30 |
900 |
300 |
|
40 |
850 |
400 |
|
50 |
800 |
500 |
|
60 |
750 |
600 |
|
70 |
700 |
700 |
|
80 |
650 |
800 |
|
90 |
600 |
900 |
|
100 |
550 |
1000 |
Refer
to Table 1 for the next 3 questions:
(1)
The
equilibrium price is _____70_____ and quantity
is _____700_______.
(2)
At
what price is there a shortage (excess demand) of 300? P = _____50_____.
(3)
In
order for the equilibrium price to be 90 and equilibrium quantity to be 600 in
the table, which would need to occur? (Circle one)
Supply Increases Supply Decreases
|
|
Country X |
Country Y |
|
Weekly Food Production
(lbs) |
10,000 lbs. |
3000 lbs |
|
Weekly Clothing Production
(number) |
5000 |
9000 |
Refer
to Table 2 for the next 4 questions:
(4)
If
there is no trade and each country divides its production efforts equally
between food and clothing, how much total food and clothing would be
produced across both countries?
Food = ____6,500_____
lbs. Clothing = ____7,000____ units
(5) If there were specialization and trade according to the law
of comparative advantage, how much total food and clothing would be
produced across both countries?
Food = ___10,000_____ lbs. Clothing
= ____9,000____ units
(6) The aggregate gains from trade are __3,500___
lbs of food, ___2,000___ units of clothing.
(7) In which county does trade result in a lower price of
food (relative to no trade)? Country = ____Y___
Use the following information for the next three
questions:
Suppose a company can manage a renewable (but
depletable) natural resource in two ways:
(A) Sustainable harvest, generating $1,000,000/year
forever (use formula PDV = $1,000,000/r)
(B) Resource liquidation, generating $15 million in
year 0, $6 million in year 1, $4 million in year 2, and zero thereafter.
(8) Which option has the highest PDV if r = 1%? Option ___A___
(9) Which option has the highest PDV if r = 5%? Option
___B___
(10) Which option has the highest PDV if r = 10%? Option
___B___
Part II: Matching: There
is one unique word or phrase match (on the left) for each description (on the
right). Write in the letter for the
word or phrase at the left that best matches the description at the right.
Word
or Phrase
A. Ecological tax reform
B. Bombing Iraq
C. Poverty
D. Deontological ethics
E. Democratic systems & processes
F. Constructed capital
G. Solidarity groups of borrowers
H. Dolphin-safe fishing methods
I. Turtle excluding devices
J. Public flogging
K. Rich industrialized countries
L. Stage III
M. Low-income countries
N. Ecolabels
O. Economic growth
P. Stage II
Q. Brundtland commission report
R. Social Capital
S. Property Rights
T. Stage I
U. Teleological ethics
V. Education, employment, & empowerment of women
Description
1. __S__ If these are poorly defined or enforced in a
low-income country then trade can hasten resource depletion in this country.
2.
__P_ Stage of the demographic transition where
birth rates remain high, but death rates are declining
3.
__R_The stock of community "capacity"
associated with trust, volunteerism, and civic virtues.
4.
__I__The WTO rejected US import bans on shrimp
from countries that were not certified to be using these.
5.
__N__ At Doha the WTO agreed to review whether
to allow these certifications of eco-friendly production.
6.
__G__ The Grameen Bank pioneered the use of
these, which assure repayment in the absence of collateral.
7.
__L__ Stage of the demographic transition where
birth rates first start to decline significantly.
8.
__O__ Refer to increases in inflation-adjusted
gross domestic product.
9.
__V__ According to Amartya Sen, & others,
this is the key reason for falling fertility rates.
10.__E__ Sustainability addresses this "third
pillar," while environmental economics does not.
11.__Q__ The definition of sustainability in this report
focuses on meeting current human needs without negatively impacting the ability
to meet future human needs.
12.__U__ States that the ethics of an action are evaluated
based on the anticipated consequences of that action.
13.__A__ System that proposes shifting taxes away from
employment & onto pollution & resource depletion.
14.__C__ Defined both as the inability to meet basic needs
& as social deprivation.
15.__K__ These countries may have more sustainable
production methods, but likely suffer from unsustainable levels of consumption.