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Practice Test 2

# Practice Test 2 - Practice Test 2 Multiple Choice Identify...

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Practice Test 2 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Denise values a stainless steel dishwasher for her new house at \$500, but she succeeds in buying one for \$350. Denise's willingness to pay is a. \$150. b. \$350. c. \$500. d. \$850. Table 7-3 For each of three potential buyers of oranges, the table displays the willingness to pay for the first three or- anges of the day. Assume Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day. First Orange Second Orange Third Orange Alex \$2.00 \$1.50 \$0.75 Barb \$1.50 \$1.00 \$0.80 Carlos \$0.75 \$0.25 \$0 ____ 2. Refer to Table 7-3. If the market price of an orange is \$1.20, the market quantity of oranges demanded per day is Figure 7-1 ____ 3. Refer to Figure 7-1 . When the price is P 1 , consumer surplus is

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____ 4. Suppose the demand for nachos increases. What will happen to producer surplus in the market for nachos? Figure 7-9 ____ 5. Refer to Figure 7-9 . If the price decreases from \$22 to \$16, consumer surplus increases by a. \$120. b. \$360. c. \$480. d. \$600. Figure 7-11. On the graph below, Q represents the quantity of the good and P represents the good's price.
____ 6. Refer to Figure 7-11 . At the equilibrium, producer surplus amounts to Figure 8-4 ____ 7. Refer to Figure 8-4 . The tax is levied on ____ 8. Refer to Figure 8-4 . Producer surplus before the tax was levied is represented by area

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Figure 8-5 ____ 9. Refer to Figure 8-5 . The amount of the tax on each unit of the good is a. \$6. b. \$8. c. \$10. d. \$12. Figure 8-6 ____ 10. Refer to Figure 8-6 . Which of the following statements summarizes the incidence of the tax?
____

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