econ302-q5b-summer09-answer%20key

econ302-q5b-summer09-answer%20key - Econ302 Quiz 5 June 10,...

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Econ302 Quiz 5 June 10, 2009 Form B Answer Key 1. Price ceilings can result in a net loss in consumer surplus when the ______________ curve is ______________. a. demand; very elastic b. supply; very inelastic c. demand; very inelastic d. none of the above; price ceilings always increase consumer surplus. Figure 1 2. Refer to Figure 1. If the government establishes a price ceiling of $1.00, consumer surplus will a. fall by $50. b. fall by $150. c. remain the same. d. rise by $150. e. rise by $50.
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Figure 2 3. Refer to Figure 2. The government sets a price support of $20. The amount the government pays in the market to implement this policy is a. $20. b. $3000. c. $4000. d. $12000. e. $6,000. 4. Refer to Figure 2. The total change in welfare from the price support policy is a. -$6000. b. -$4500. c. -$5250. d. $4500.
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e. $5250. 5. Consider a good whose own price elasticity of demand is -0.5 and price elasticity of supply is 1.5. The fraction of a specific tax that will be passed through to consumers is:
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econ302-q5b-summer09-answer%20key - Econ302 Quiz 5 June 10,...

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