Midterm Exam 3 with Answers - Microeconomic Principles | ECON 103 Graded A+
Suppose workers in Sri Lanka earn 12 cents an hour on average while workers in the USA
earn $15 per hour on average. What is the economic reason for this situation? - ansNone of
the above is correct
The "Law of Supply" states: - ansNone of the above defines the Law of Supply
, Midterm Exam 3 with Answers - Microeconomic Principles | ECON 103 Graded A+
What is NOT TRUE about financial intermediaries? - ansThey reduce the GAINS from trade
Which economist formulated the "contestability hypothesis"? - ansWilliam Baumol
Which of the following is NOT TRUE concerning cartels in a free market? - ansCartel members
in the cartel have an incentive to restrict output to raise price
Which of the following is NOT TRUE with respect to relative price? - ansThe price of the good
affects human values relative to scarcity for the good
Which of the following is NOT TRUE? - ansThe law of diminishing returns is a variable
determining where the labor supple curve is located
Which of the following is NOT true? - ansThe single-price monopolist has a marginal revenue
curve above the demand curve because it cannot sell additional output without lowering price
on previous output
Which of the following is TRUE with respect to Standard Oil Company? - ansNone of the above
is true
According to David Ricardo's Law of Comparative Advantage, which of the following is TRUE? -
ansProfitable investments into future productivity can shift someone's comparative advantage
At what quantity would the firm maximize profits? - ansThis is a trick question: none of the
above is correct
Suppose the bank pays savers 3.5% and charges borrowers 7% who all pay their loans on time
and in full. Assume that there is 1.5% administration expenses associated with operating the
bank. If the quantity of loanable funds is $2 million, what are the bank's total profits? -
ans$40,000
Suppose the inflation rate in the USA is 6% and in Britain it is also 6%. On day two, the
inflation rate in Britain decreases to 3% while it remains 6% in the USA. Before the exchange
rate adjusts, what will occur? - ansA surplus of dollars in Britain relative to Pounds
Suppose the numerical calculation for the coefficient of elasticity is +1.7, this means: -
ansSupply is elastic
Suppose there are three industries in a perfectly competitive economy (X), (Y), and (Z). You
notice that marginal firms in X and Z are exiting their respective industries and entering
industry Y. If all the factors of production used in X, Y, and Z are specialized economic goods,
we can infer which of the following? - ansThe prices of consumer goods in Y have risen
relative to those in X and Z
Suppose workers in Sri Lanka earn 12 cents an hour on average while workers in the USA
earn $15 per hour on average. What is the economic reason for this situation? - ansNone of
the above is correct
The "Law of Supply" states: - ansNone of the above defines the Law of Supply
, Midterm Exam 3 with Answers - Microeconomic Principles | ECON 103 Graded A+
What is NOT TRUE about financial intermediaries? - ansThey reduce the GAINS from trade
Which economist formulated the "contestability hypothesis"? - ansWilliam Baumol
Which of the following is NOT TRUE concerning cartels in a free market? - ansCartel members
in the cartel have an incentive to restrict output to raise price
Which of the following is NOT TRUE with respect to relative price? - ansThe price of the good
affects human values relative to scarcity for the good
Which of the following is NOT TRUE? - ansThe law of diminishing returns is a variable
determining where the labor supple curve is located
Which of the following is NOT true? - ansThe single-price monopolist has a marginal revenue
curve above the demand curve because it cannot sell additional output without lowering price
on previous output
Which of the following is TRUE with respect to Standard Oil Company? - ansNone of the above
is true
According to David Ricardo's Law of Comparative Advantage, which of the following is TRUE? -
ansProfitable investments into future productivity can shift someone's comparative advantage
At what quantity would the firm maximize profits? - ansThis is a trick question: none of the
above is correct
Suppose the bank pays savers 3.5% and charges borrowers 7% who all pay their loans on time
and in full. Assume that there is 1.5% administration expenses associated with operating the
bank. If the quantity of loanable funds is $2 million, what are the bank's total profits? -
ans$40,000
Suppose the inflation rate in the USA is 6% and in Britain it is also 6%. On day two, the
inflation rate in Britain decreases to 3% while it remains 6% in the USA. Before the exchange
rate adjusts, what will occur? - ansA surplus of dollars in Britain relative to Pounds
Suppose the numerical calculation for the coefficient of elasticity is +1.7, this means: -
ansSupply is elastic
Suppose there are three industries in a perfectly competitive economy (X), (Y), and (Z). You
notice that marginal firms in X and Z are exiting their respective industries and entering
industry Y. If all the factors of production used in X, Y, and Z are specialized economic goods,
we can infer which of the following? - ansThe prices of consumer goods in Y have risen
relative to those in X and Z
