Mid2a_201_W02

Mid2a_201_W02 - Cal Poly Pomona EC 201 Bruce Brown NAME...

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Cal Poly Pomona, EC 201 - Bruce Brown NAME_______________________________ Exam 2, February 25, 2002 (please clearly print your family name with all capital letters) - You should mark your answers on the exam, it will be returned. - You may use an ordinary language dictionary (not electronic or economics dictionary). Use of a calculator is also allowed, but can not be shared by students. You may leave when finished. - You may ask clarifying questions about definitions or wording of the questions. If the question regards definition of a term presented in this course, it will not be answered. - This exam has 50 questions, all of equal weight. Clearly fill in the bubble on your scantron form which corresponds to the best answer. No points are deducted for incorrect answers, so each of 50 questions should be marked with one answer. - You may leave when finished. Hand in both this exam and your scantron form. I. Multiple Choice – mark the best answer on your scantron form 1) If the demand for insulin is perfectly inelastic (price elasticity of demand = 0); then: a. economic incidence of an excise tax would be entirely be on the buyers. b. economic incidence of a sales tax would be entirely be on the buyers. c. there would be no Deadweight Loss (= “excess burden”) from an excise tax or sales tax on this good. d. all of the above are true 2) Consumer Surplus is represented by: a. the area above a supply curve and below equilibrium price b. the area above a demand curve and above equilibrium price c. the area below a supply curve and above equilibrium price d. the area below a demand curve and above equilibrium price 3) Which of the following are caused by binding (“effective”) rent control laws? a. increase in the number of apartment units supplied in the future. b. a decrease in discrimination against minorities or those with characteristics that managers dislike. c. fall (reduction) in the quality of existing apartments. d. all of the above. 4) Which of the following is an efficiency-based reason for government intervention presented in class? a. markets where price is high because of a natural disaster that has shifted supply. b. markets for goods where it is impossible to exclude those who did not pay from consuming. c. markets where no external benefits exist. d. excessive competition in a market. 5) Deadweight Loss from a tax occurs because: a. the government will spend the tax revenue in a way that will create less social benefit than if spent by the private consumers and producers. b. money is transferred from the consumers to the government c. money is transferred from both the consumers and producers to the government d. the distortion in prices causes an inefficiently low quantity to be consumed 6) If there are positive consumption externalities. a. Marginal
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Mid2a_201_W02 - Cal Poly Pomona EC 201 Bruce Brown NAME...

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