ECON 201 DEPARTMENT OF ECONOMICS MIDTERM
EXAMINATION WINTER STUDY AHEAD SOLUTION GUIDE
CONCORDIA UNIVERSITY
Multiple Choice Questions (3 marks each).
1. Suppose you give up a job that pays $30,000 a year in order to pursue your university
education. Every year, you pay $4,000 for tuition and books, and $16,000 for food and
rent. What is your opportunity cost of spending one year in university?
a) $ 46,000.
b) $ 50,000.
c) $ 34,000.
d) $ 30,000.
2. Suppose that Zoe and Ben can produce bar soaps and DVDs. For a given day, Zoe can make
either 10 soaps and 0 DVD or 0 soaps and 20 DVDs or other combinations in between. Ben
can make either 5 soaps and 0 DVDs or 0 soaps and 15 DVDs or other combinations in
between. Assuming that Zoe and Ben are self-sufficient and they split their day to produce
both soaps and DVDs. What would be the consumption bundles for Zoe and Ben?
a) Zoe consumes (5S, 20DVD) and Ben consumes (5S, 10DVD).
b) Zoe consumes (10S, 10DVD) and Ben consumes (5S, 7.5DVD).
c) Zoe consumes (8S, 2DVD) and Ben consumes (5S, 8DVD).
d) Zoe consumes (5S, 10DVD) and Ben consumes (2.5S, 7.5DVD).
3. A basket of goods in 2005 costs $625, while the value of the same basket in 2010 costs
$800. If the base year is 2005, what is the value of this price index in 2005?
a) 100.
b) 78.125.
c) 128.
d) 155.
4. Which of the following would be considered as cross section data?
a) The mortgage payments of Anna, Ben and John between 2005 and 2010.
b) The rise in the cost of living over the past five years.
, c) Inflation rates between 1990 and 2010.
d) The income and gasoline consumption of 1,000 residents in Montreal in 2012.
5. If the demand equation changes from P=25-6Q to P=30-6Q, which of the following
statements is CORRECT?
a) The demand for this product has decreased, which is a shift to the right.
b) The demand for this product has increased, which is a shift to the right.
c) The demand for this product has decreased, which is a shift to the left.
d) The demand for this product has increased, which is a shift to the left.
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