econ another practice midterm

what is equilibrium price in this market (figure 3)

$10

which of the following way to compute the present value of $100 to be paid in the 4 years when the interest rate is 10%

$100(1+.1)^4

according to the data give the equilibrium price of a weevil is

$5 look at paper

if the penalty for stealing ford cars increases, we can except criminals to

-steal more honda cars -steal less ford cars (both a and b)

what is the opportunity cost of moving from point B to point A in figure 4

50 units X

look at #24- efficient production is represented by which points?

A) K,N

Which of the following is not a characteristic of a perfectly competitive market?

All of the above are characteristics: sellers must accept the price the market determines, there are many sellers, diff sellers sell identical products

look at #23-above shows two types of goods 1) producer goods (I); and 2) consumer goods (C). Which of the points that are possible, which point will lead to a PDF that has expanded outward the most in the next time period

K?

The hotter it gets the more water ppl drink-this statement implies that the relationship between temp and water consumption must have a

Positive slope

If the Fed decides to buy T-bills, it increases the demand for T-bills. How will this affect the price of T-bills

T bill prices rise and interest rates fall

Suppose you are the manager of a trust fund and you are required to hold all the assets in US government securities (bonds). You have a fiduciary responsibility to manage the trust in a responsible manner (no short selling or leverage) if you thought that interest rates in general were going to rise what types of securities would you want to hold

T-bills with a short term such as 30 days

An inverted yield curve means

The short term yield on US government bonds are higher than long term government bonds

In an attempt to reduce Poaching of elephant tusks for ivory, officials in Kenya burned illegally gathered ivory. Economists tend to point out that

The supply of ivory has fallen, leading to an increase in price and reward for poaching

If the supply of a product increases, then we would expect equilibrium price

To decrease and equilibrium quantity to increase

if a surplus exists in a market then we know that the actual price is

above the equilibrium price and quantity supplied is created than quantity demanded

if american cheese and cheddar cheese are substitutes, then which of the following would decrease the demand for cheddar cheese (ceteris paribus)

an increase in the supply of american cheese

US government bonds

are usually purchases as a discount to their principal

an issuer or maker of a bond is

borrowing money

If scientists discover that steamed milk which is used to make lattes prevents heart attacks, what would happen to the equilibrium price and quantity of lattes

both the equilibrium price and quantity would increase

what factors are held constant along a given demand curve for a good

consumer incomes and the prices of other goods

what is true about leading indicators

data form the yield curve can be used as a leading indicator

If a good is an inferior good, then an increase in income will result in a

decrease in the demand for the good

an early frost in the vineyards of nana valley would cause a

decrease in the supply of wine increasing price

stock prices fell throughout much of 2007&2008 and many investors decided to switch their funds into bond market. what only about 30 % of surveyed investors knew was that as bond prices rise, interest rates

fall in reaction to the increased demand for bonds

"Moonshine" is illegal home brew made by adding adding sugar to accelerate corn fermentation. Ten pounds of sugar are necessary to make a gallon of moonshine. In the mid-1970s, the price of sugar tripled and the price of moonshine skyrocketed from $6 to $15 a gallon. Which graph in figure 1 best illustrates this?

graph 4

which of the following statements about the term of a bond is correct

interest rates on long-term bonds are usually higher than interest rates on short-term bonds

the sum of all the individual supply curves for a product is called

market supply

A big drop in the quantity of new housing construction

may forecast downturn in the economy

some studies have found a correlation between the number of police officers per 1,000 persons and the number of crimes per 1,000. this is due to which

more policemen are hired to work in high crime areas

each of the following is a determinant of demand except

production technology

at the price of $12 there is a (look at figure 3)

surplus of 2 units

the principal on a bond is

the amount the bond holder will receive on the date of maturity

"other things equal when the price of good rises, the quantity demanded of the good falls, and when the prices falls the quantity demanded rises. This relationship between prices and quantity demanded is inferred to as

the law of demand

in January, 2,500 quarts of ice cream are sold in Boston at $2 a quart. In feb, 3,000 quarts are sold at $2.50 a quart. This change in quantity sold and price may have been caused by

the release of a medical study showing that ice cream consumption improves mental health

a university's football stadium is never more than half-full during football games. this indicates

the ticket price is above the equilibrium price (because too expensive)

the 10 year treasury note that you bought last week yielding 2.8% just dropped in price yesterday. You paid 10,000 for it but now they are selling for $9,200. This means that

the yield on the note has increased

in figure 5, a shift from A to B seems most consistent with which of the following

there is a massive immigration of labor

when two variables have a positive correlation

they tend to move on in the same direction

You are thinking of buying a bond from bluestone corporation. you know that this bond is long term and you that bluestone's business ventures are risky and uncertain. you then consider another bond with a shorter term to maturity issued by a company with good prospects and an established reputation. which of the following is correct?

Both the longer term and the higher risk would tend to make the interest rate higher on the bond issued by Bluestone.

An example of a perfectly competitive market would be a market for

Gold