Econ 1: Midterm Exam (Makeup)

There are three parts and they carry different weights, so budget your time carefully. Good luck.

Part I (30 percent). Define each of the following as clearly as you can.

1. Economics.

2. Comparative advantage.

3. Deadweight loss.

4. Efficiency.

5. Perfectly elastic demand.

6. Public goods.

Part II (30 percent). Short answer:

1. If you heard that last year the price of good X decreased, but the quantity consumed also decreased, what would you conclude?

2. What factors contribute to economic growth?

3. Evaluate the following statement: "The marginal cost curve is the same as the supply curve."

4. Evaluate the following statement: "An inferior good must be a Giffen good, but not vice-versa.

5. Why is long run supply more elastic than short run supply?

Part III (40 percent). Long Answer:

1. Discuss rent control.

2. Discuss how, under appropriate assumptions, a market equilibrium will be efficient.