Dr. Dakshina De Silva
Name ……………………….
ECON 3320 (Spring 2007 Exam # 1)
ID#
……………………….
Form1
Suppose demand and supply equations are given by:
Q
d
= 600 – 3
P
x
and
Q
S
= 3
P
x
1) Suppose a $ 100 excise tax is imposed on the good. The new price received by the
seller is
a)
50
b) 60
c) 70
d) 80
Answer: A
2) After tax, new price paid by the buyers is
a)
60
b) 100
c) 150
d) 160
Answer: C
3) The quantity sold after taxes is
a)
150
b)180
c)200
d) 480
Answer: A
4) The total tax revenue is
a)
10,000
b) 15,000
c) 18,000
d) 20,000
Answer: B
5) The buyers’ share of tax is
a)
0.25
b) 0.5
c) 0.75
d) 0.8
Answer: B
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View Full Document6)
In a competitive market, the market demand is Q
d
= 60  6P and the market supply is
s
= 4P.
A price ceiling of $3 will result in
a)
A shortage of 18 units.
b)
A shortage of 30 units.
c)
A surplus of 30 units.
d)
A surplus of 12 units.
e)
neither a shortage nor a surplus.
Answer: B
7)
In a competitive market, the market demand is Q
d
= 60  6P and the market supply is
Q
s
= 4P.
The full economic price (How much a buyer willing to pay) under a price
ceiling of $3 is
a)
6.
b)
7.
c)
8.
d)
9.
Answer: C
8)
Suppose the demand for good X is given by Q
d
x
= 10 +
α
x
P
x
+
α
y
P
y
+
α
M
M.
If
α
M
is
negative, then good y is:
a)
a normal good.
b)
an inferior good.
c)
a complement.
d)
a substitute.
Answer: B
9)
The supply function for good X is given by
Q
x
s
= 1,000 + P
X
 5 P
Y
 2P
W
, where P
X
is the price of X, P
Y
is the price of good Y and P
W
is the price of input W.
If the price of
input W increases by $10, then the supply of good X
a)
will increase by 10 units.
b)
will increase by 20 units.
c)
will decrease by 10 units.
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 Spring '08
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 Supply And Demand, J Mitchell

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