M2ManA - ECO 201 Exam # 2 Dr. Antonio Saravia Multiple...

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ECO 201 Exam # 2 Dr. Antonio Saravia Multiple Choice Identify the choice that best completes the statement or answers the question. 1. If the government wants to reduce smoking, it should impose a tax on a. buyers of cigarettes. b. sellers of cigarettes. c. whichever side of the market is more elastic. d. either buyers or sellers of cigarettes. 2. You are offered a free ticket to see the Chicago Cubs play the Chicago White Sox at Wrigley Field. Assume the ticket has no resale value. Willie Nelson is performing on the same night and his concert is your next-best alternative activity. Tickets to see Willie Nelson cost $40. On any given day, you would be willing to pay up to $50 to see and hear Willie Nelson perform. Assume there are no other costs of seeing either event. Based on this information, at a minimum, how much would you have to value seeing the Cubs play the White Sox to accept the ticket and go to the game? a. $10 b. $50 c. $40 d. $0 3. When a country that imports a particular good imposes an import quota on that good, a. producer surplus increases and total surplus decreases in the market for that good. b. producer surplus decreases and total surplus decreases in the market for that good. c. producer surplus decreases and total surplus increases in the market for that good. d. producer surplus increases and total surplus increases in the market for that good. 4. Which of the following will cause an increase in consumer surplus? a. a technological improvement in the production of the good b. an increase in the production cost of the good c. the imposition of a binding price floor in the market d. a decrease in the number of sellers of the good 5. Suppose the government has imposed a price ceiling on cellular phones. Which of the following events could transform the price ceiling from one that is binding to one that is not binding? a.
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M2ManA - ECO 201 Exam # 2 Dr. Antonio Saravia Multiple...

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