Past Exam for ECON 202 - PRIN OF ECONOMICS at Texas A&M (A&M)

Exam Information

Material Type:Exam 2
University:Texas A&M University
Term:Fall 2007
  • Demand Function
  • Inverse Demand Function
  • Constant Returns
  • Combination
  • (to/for) Him/it
  • Consumption
  • Preferences
  • Supply Function
  • Constant Returns to Scale
  • Returns to Scale
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Sample Document Text

NAME: PracticeExam 2 Fall 2007 Instructions: Please answer the following questions as completely and clearly as possible. The answers are at the end, but you should carefully attempt all questions before looking at the answers. 1. If consumer 1 has the inverse demand function given by p = 15 –x and consumer 2 has the inverse demand function given by p = 20 –3x, then what is the total quantity demanded by the two consumers when the price p, is 11? What if the price were 17? 2. Vincent Smudge’s paintings are unappreciated now. Nobody is willing to pay anything to have them on the walls. In 5 years Smudge’s work will gain enduring popularity. People will suddenly be willing to pay $1,000 a year to have an original Smudge on their walls and will continue to be willing to do so ever after. If investors realize that this is the case and if the interest rate is and always will be r, a painting by Smudge will currently be worth about how much? 3. If the nominal interest rate is 80% and the rate of in‡ati...

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