Econ 102- Buckley Exam 01 Review
Midterm Exam 1
• Covers Lessons 1-3
• 15 Multiple Choice Questions and 10 Math/Graphing Questions
• 45 minutes
Lesson 01
• Define economics and the differences between micro and macroeconomics.
• Differentiate between positive and normative statements and change normative
statements to positive statements.
• Know the elements of a good theory.
• Graph Production Possibility Frontiers.
• Understand the concepts Production Efficient and Allocation Efficient.
• Understand the concept of Increasing Marginal Cost.
Lesson 02
• Define absolute and comparative advantage.
• Calculate comparative advantage.
• Graph joint Production Possibility Frontiers for when two people specialize.
• Define autarky.
• Understand the benefits of specialization and exchange.
Lesson 03
• Understand Diminishing Marginal Utility.
• Understand the relationship between reservation prices and quantity demanded.
• Define the Law of Demand.
• Define choke price.
• Read demand curves for reservation prices and quantity demanded.
• Define and use the concept of "ceteris paribus."
• Understand the relationship between marginal cost and supply.
• Define the Law of Supply.
• Read supply curves for marginal cost and quantity supplied.
• Analyze market-clearing prices and equilibrium.
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Econ 102- Buckley Exam 01 Review
Lesson 01
Dr. Buckley has TA’s that he would like to write exam questions or attend Zoom meetings. If no
TA’s are in Zoom meetings, then they can write 30 total exam questions. If Dr. Buckley has one
Zoom meeting, then they can get a total of 25 questions written. If there are 2 meetings, then
they can write a total of 15 questions. If there are three Zoom meetings, then the TA’s have no
time left to write exam questions.
1. Draw the PPF for this situation.
2. Determine the marginal cost for the
a. 1st Zoom Meeting __________
b. 2nd Zoom Meeting __________
c. 3rd Zoom Meeting __________
3. Suppose that Dr. Buckley thinks a Zoom meeting is worth give up 7 exam questions but
nothing more than that. Which of the points above is Allocation Efficient?
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Econ 102- Buckley Exam 01 Review
Lesson 02
In one day, Finn can make 4 burritos or 1 pancake. In the same amount of time, Jake can
make 5 burritos or 2 pancakes.
4. In burritos, _________ has the absolute advantage. In pancakes, _________ has the
absolute advantage.
5. Finn gives up _________ burritos per 1 pancake that he makes.
6. Finn gives up _________ pancake per 1 burrito that he makes.
7. Jake gives up _________ burrito per 1 pancake that he makes.
8. Jake gives up _________ pancake per 1 burrito that he makes.
9. In burritos, _________ has the comparative advantage. In pancakes, _________ has the
comparative advantage.
10. Graph the joint PPF below.
Pancakes
5
Jake
4
Finn
0
0 1 2 3 4 5 6 7 8 9 10 Burritos
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Econ 102- Buckley Exam 01 Review
Lesson 03
11. Determine the choke price. __________
12. How much was someone willing to pay for the 100th unit? __________
13. Determine the market-clearing price. __________
14. Determine the equilibrium quantity. __________
15. Suppose the price is $3.00. Is there a shortage or a surplus? How many units?
___________________
16. Suppose the price is $6.00. Is there a shortage or a surplus? How many units?
___________________
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