Lec 13 Questions - Econ 101 Class 13 Questions 1 Durham...

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Econ 101 Class 13 Questions 1. Durham gets water from three sources. The table shows cost and capacity of each source. Source Capacity (millions of gallons per day Cost per Gallon Spring 2 $0.01 Lake Michie 2 $0.015 Kerr Lake 2 $0.03 If Durham residents normally use 5 million gallons of water per day, Durham should charge______ per gallon for water. A. $.01 B. $.015 C. $.016 D. $.03 ** 2. In Asheville, there are two sources of electric power. A hydroelectric plant produces power at a cost of $0.04 per KWH. A coal fired generator produces power at a cost of $0.07 per KWH. Which of the following describes an efficient policy for pricing electricity? The electricity price paid by Ashville customers should… A. Equal the average of the costs at the two production facilities. B. Equal the lower hydroelectric price provided the hydroelectric plant can meet total customer
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Unformatted text preview: demand. ** C. Equal the higher coal-fired plant price no matter how large customer demand. D. Equal the marginal cost of electricity at the plant that supplies them. 3. Buyers are likely to bear a higher burden from a tax on a good when… A. The good is produced with highly mobile inputs. ** B. Consumers have available good substitutes for the good. C. It takes a long time to change the quantity supplied of the good. D. The demand for the good is highly elastic. 4. Sellers are more likely to bear the burden of a tax imposed on ____ because ____. A. Tobacco products, because demand is highly inelastic. B. Tobacco products, because farmers can easily switch to other crops. C. Imported oranges, because domestic oranges are good substitutes. ** D. Imported oranges, because citrus growers can easily switch to other crops....
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  • Fall '07
  • BALABAN
  • Economics, Marginal concepts, Durham

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