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Past Exam for ECON 2006 - Principles of Economics with McLeod at Virginia Tech (VT)

Exam Information

Material Type:Exam 1
Professor:McLeod
Class:ECON 2006 - Principles of Economics
Subject:Economics
University:Virginia Polytechnic Institute And State University
Term:--
Keywords:
  • Expenditure Approach
  • Structural Unemployment
  • Income Approach
  • Discouraged Worker
  • Durable Goods
  • Unemployment
  • Excess Supply
  • Explanation
  • Discouraged Workers
  • New Technology
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Sample Document Text

c A ECON 2006-91641 FORMA Midterm 1 McLeod [;>5 '/ <-1 ~ .. 0 C57.::> I) You are given that the supply of guitars is Qs = 80P - 5,000, where P is the price of guitars. Demand for guitars is given by 50,000 - 50P. Suppose the price of guitars is $600. Which of the following statements is true? A) nUl maFltet for guitars is in equilibrium, and so we do not expect the pri ce of guitars to change. B) There is excess supply of guitars, so we expect the price of guitars to rise. JDere is excess supply of guitars, so we expect the price of guitars to fall. _81'@ is 8Kcess demand for guitars,so we expect the price of guitars to rise. -E) There is-excess demand for guitars, so we expect the price of guitars to fall. V 2) Suppose that banjos and guitars are complements. If the supply of banjos increases, ~,t will happen to the equilibrium price and equilibrium quantity of guitars? ){; P D A) They will both rise. 'P J; ~ B) ey will both fall. ) _ ~ ~ ~e equilibrium price will rise, an...

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