Sample Questions and Quizzes:
In-class quizzes comprise 15% of the course grade. The quiz questions will come from the corresponding Sample Questions. For instance, the Quiz 1 question(s) will be randomly selected from the Sample Questions 1. The quiz dates are listed in the syllabus and on the sample questions. Sample Questions will generally be discussed in the class section the week before the quiz.
Sample Questions #1Quiz 1 will be in Week 2
1. Suppose that you win two free tickets to a concert by calling into a radio show. Each ticket has a face value of $30 and originally sold for $30, but now the concert is sold out. People without tickets are currently offering $50 each for tickets to the concert. What is the opportunity cost of taking your boyfriend/girlfriend to the concert? Explain.
2. The country of Freedonia produces two goods, pizza and bicycles.
Freedonia’s Production Possibilities
BicyclesPizza
067
165
260
350
435
520
60
i) Sketch a Production Possibility Frontier graph for the country of Freedonia. (Put bicycles on the horizontal axis.)
ii) Does this economy exhibit increasing, constant or decreasing costs of production in each of its goods?
iii) If the economy is producing 4 units of bicycle and 35 units of pizza, what is the opportunity cost of a bicycle?
iv) If the country is producing 2 units of bicycle and 40 units of pizza, what is the opportunity cost of a bicycle?
3. People are born with two kidneys. Should the voluntary sale of one kidney by a person with healthy kidneys to a person dying from kidney disease be allowed? [Give a complete answer.]
4. Answer the questions that follow the article “Never Mind the Clip-On Ties, Geek Squad Can Fix Your PC”. [Note: you can find the articles at the back of this booklet.]
Sample Questions #2Week 3 Quiz
1. Use small, well labelled, graphs to show the likely effect of the following events:
i)What is the effect of increasing income levels on the use of city commuter buses?
ii)What is the expected effect of an increase of apple prices on the market for oranges?
iii)What is the effect of an increase in the price of movie ticket prices on the market for popcorn?
iv)What is the effect of an increase of wholesale beef prices on street döner prices?
2. The following are the supply and demand schedules for hamburgers in Collegetown:
QuantityQuantity
PriceDemandedSupplied
$2.006,00015,000
1.758,00014,000
1.5010,00013,000
1.2512,00012,000
1.0014,00011,000
0.7516,00010,000
i) Plot the supply and demand curves and determine the equilibrium price and quantity.
ii) Suppose that a price ceiling of $1 is placed upon hamburgers.
1) What is the quantity of burgers sold?
2) There is an excess ( supply demand ) of ______burgers due to the price ceiling. [Circle the correct answer and fill in the blank.]
3) Show the effect of the price ceiling on your graph from question (i), include any area of deadweight loss.
iii) Now suppose that a tax of $0.75 is placed upon burgers.
1) What is the quantity of burgers sold?
2) How much revenue is generated by the tax?
3. The supply and demand curves for Widgets are given by the equations below:
Demand: and the supply curve is given by
Supply:
i) Algebraically find the equilibrium Price and Quantity. Show your work.
ii) Calculate the consumer and producer surplus.
4. The minimum wage in Turkey is currently 562.50 YTL per month (net of taxes). Does the existence of this law help or hurt the poor. Include a graphical analysis of this price floor as part of your answer.
5. Suppose a popular concert is held in a small auditorium on campus. Since there is not room enough for all students to attend the concert, tickets are given out by lottery. Explain why this system of allocation is inefficient.
Sample Questions #3Week 5 Quiz
1. Read the article titled “Aid to Ranchers Was Diverted For Big Profits” and answer the related reading comprehension questions below.
i. Why did the US government buy very large amounts of powdered milk for many years? Which of the topics that we studied explains this? Explain the concept and include a graph.
ii. Why and how did the government try to ‘get rid’ of some of the stored milk?
iii. What was the failure in their plan, from an economic viewpoint?
iv. Is the black market in powdered milk efficient?
v. Why was New Zealand upset? Include a graph in your explanation.
2. After receiving a wage increase from 2000TL to 2200TL per month Barış increased his wine consumption from 2 bottles per week (for the house) to 3 and decreased his beer consumption from 5 bottles per week to 3. What are Barış’ income elasticity of demand for beer and wine?
Sample Questions #4Week 7 Quiz
1. Briefly explain why most goods possess diminishing marginal utility.
2. The graph below represents the budget line and indifference curve for a consumer with income of $180 and facing a price of $10 on good X.
a)What is PY?
b)Which is true at point A? Explain.
i)
ii)
iii)
c)Draw, on the same graph, a new utility maximizing indifference curve assuming that good X is an inferior good.
3. Draw an income expansion path for two goods assuming that both goods are normal goods.
4. Suppose that a consumer has selected a combination of goods X and Y such that she is spending her entire income, but such that .
i) Show such a situation on an indifference curve graph.
ii) To increase the utility of consumption, should the consumer consume ( more less ) good X, and ( more less ) good Y. Select the correct answers and explain.
iii) What is true about the last dollar spent on each good at the optimal consumption point?
5. Why is an ounce of gold worth more than an ounce of water? Discuss using the concept of marginal utility.
Sample Questions #5Week 11 Quiz
1. The graph below shows the cost curves and demand function for a monopoly.
i) What is the profit maximizing quantity for a monopoly?
ii) What is the monopoly price per unit?
iii) Using the graph determine the total monopoly profit.
[For parts (iii) and (iv) give numerical answer and show on the graph.]
iv) What is the efficiency loss to society (deadweight loss) due to the monopoly?
v) What is the efficient quantity?
2. Widgets are produced in a monopolistically competitive industry. Each Widget producer’s product is different from other Widgets. Below the Demand and Marginal Cost curve for Acme Widgets is given.
i) What is the profit maximizing price and quantity of Widgets for Acme Company?
ii) On the graph, show a typical long run ATC curve for Acme.
iii) What is the amount of excess capacity?
iv) What are the benefits and drawbacks of having industries with differentiated products?
Sample Questions #6Week 14 Quiz
1. Read the article “The coming hordes” and answer the reading comprension questions:
1. Use labor supply-demand graphs to predict the effect of free worker mobility on wages for unskilled and skilled workers in both developed and developing countries (analyze 4 cases).
2. What is the effect of mobility on goods and housing costs in the developed, receiving, country?
2. Describe when and why we might observe a ‘backward bending’ labor supply curve.
3. Why do university graduates earn more than similar people that did not attend university?
4. The Black Death killed 30-60% of Europe’s population in the 1340’s. What do you expect happened to the wage levels in Europe after the plague passed? Explain.