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AECON 312 INTERMEDIATE MACROECONOMICS
EXAM QUESTIONS SOLUTIONS STUDY GUIDE AND
COMPLETE MATERIAL 2026 2027 VERIFIED
ANSWERS ACTUAL UPDATED PRACTICE QUESTIONS
HIGH YIELD STUDY GUIDE MACROECONOMICS
EXAM PREPARATION GRADED A+ SUCCESS REVIEW
BRAND NEW VERSION
Consider the basic urban model from your textbook and a city that exists in
isolation (no migration in or out). Both consumers have identical income and
identical preferences that are represented by well-behaved indifference
curves. If Consumer A's dwelling is located further away from the CBD than
Consumer B's dwelling, then:
A) Consumer A requires a higher p so she can sell her house for more money
to pay for the longer commute
B) Consumer A requires a lower p in order to be on the same indifference
curve as
Consumer B
C) Consumer B will consume more housing than Consumer A
D) Consumer A has a higher t than Consumer B
E) C and D
B)
An agricultural surplus is a ___________ condition for city formation
A) necessary
B) sufficient
C) necessary and sufficient
D) neither necessary nor sufficient
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E) None of the above
A)
_________ caused the growth of company towns (towns dominated by a single
firm), but did not lead to massive cities
A) pecuniary agglomeration externalities
B) internal economies of scale in production
C) technological agglomeration externalities
D) decreases in transportation costs
E) B and D
E)
Economists working in different companies, who meet up after work for a beer
to discuss new ideas and become more productive as a result, provide an
example of
A) pecuniary agglomeration externalities
B) internal economies of scale
C) technological agglomeration externalities
D) constant returns to scale
E) decreasing returns to scale
C)
Consider the consumer choice model with quantity of housing on the
horizontal axis and quantity of consumption on the vertical axis. An increase
in the price of housing, holding other things constant, would be represented
by
I. An inward parallel shift of the budget constraint
II. A flattening of the budget constraint
III. A steepening of the budget constraint
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A) I only
B) II only
C) III only
D) I and II only
E) II and III only
C)
Consider the basic urban model from your textbook, and a city that exists in
isolation (no migration in or out). Suppose one effect of climate change is that
it causes more droughts that lower the profitability of farming by requiring
more irrigation. Which of the following is not an effect this will have on the
city's spatial equilibrium?
A) The city will grow in area
B) Housing rents per square foot will fall throughout the city
C) Average housing unit size will decrease near the center
D) Building heights will decrease near the center
E) Average commute lengths (distance) in the city will increase
C)
The housing rent curve (residential bid-rent) is convex due to
I. consumer substitution
II. producer substitution
III. agglomeration externalities
A) I only
B) II only
C) III only
D) I and II only
E) II and III only.
AECON 312 INTERMEDIATE MACROECONOMICS
EXAM QUESTIONS SOLUTIONS STUDY GUIDE AND
COMPLETE MATERIAL 2026 2027 VERIFIED
ANSWERS ACTUAL UPDATED PRACTICE QUESTIONS
HIGH YIELD STUDY GUIDE MACROECONOMICS
EXAM PREPARATION GRADED A+ SUCCESS REVIEW
BRAND NEW VERSION
Consider the basic urban model from your textbook and a city that exists in
isolation (no migration in or out). Both consumers have identical income and
identical preferences that are represented by well-behaved indifference
curves. If Consumer A's dwelling is located further away from the CBD than
Consumer B's dwelling, then:
A) Consumer A requires a higher p so she can sell her house for more money
to pay for the longer commute
B) Consumer A requires a lower p in order to be on the same indifference
curve as
Consumer B
C) Consumer B will consume more housing than Consumer A
D) Consumer A has a higher t than Consumer B
E) C and D
B)
An agricultural surplus is a ___________ condition for city formation
A) necessary
B) sufficient
C) necessary and sufficient
D) neither necessary nor sufficient
,2 | Page
E) None of the above
A)
_________ caused the growth of company towns (towns dominated by a single
firm), but did not lead to massive cities
A) pecuniary agglomeration externalities
B) internal economies of scale in production
C) technological agglomeration externalities
D) decreases in transportation costs
E) B and D
E)
Economists working in different companies, who meet up after work for a beer
to discuss new ideas and become more productive as a result, provide an
example of
A) pecuniary agglomeration externalities
B) internal economies of scale
C) technological agglomeration externalities
D) constant returns to scale
E) decreasing returns to scale
C)
Consider the consumer choice model with quantity of housing on the
horizontal axis and quantity of consumption on the vertical axis. An increase
in the price of housing, holding other things constant, would be represented
by
I. An inward parallel shift of the budget constraint
II. A flattening of the budget constraint
III. A steepening of the budget constraint
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A) I only
B) II only
C) III only
D) I and II only
E) II and III only
C)
Consider the basic urban model from your textbook, and a city that exists in
isolation (no migration in or out). Suppose one effect of climate change is that
it causes more droughts that lower the profitability of farming by requiring
more irrigation. Which of the following is not an effect this will have on the
city's spatial equilibrium?
A) The city will grow in area
B) Housing rents per square foot will fall throughout the city
C) Average housing unit size will decrease near the center
D) Building heights will decrease near the center
E) Average commute lengths (distance) in the city will increase
C)
The housing rent curve (residential bid-rent) is convex due to
I. consumer substitution
II. producer substitution
III. agglomeration externalities
A) I only
B) II only
C) III only
D) I and II only
E) II and III only.
