Intermediate Microeconomics: A Modern Approach, Seventh Edition

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EXAM 2 SPRING 2004 PLEDGE:____________________________ NAME:______________________________ Use this information to answer questions 1-4. Suppose that the supply curve for news stories concerning Michael Jackson is perfectly elastic at the price of $10. The demand curve is downward sloping and can be represented with the equation: Q D = 1000 – 10P. 1. (3) The equilibrium price and quantity of Michael Jackson stories is: a. P = $10, Q = 900. b. P = $10, Q = 100. c. P = $50, Q = 500. d. P = $90, Q = 100. 2. (3) Suppose the government decides to tax stories about Michael Jackson by $5. If this is the case, the price that consumers pay is ____ and the price that suppliers receive is ____. a. $10, $15. b. $15, $10. c. $10, $5. d. $5, $10. e. None of the above. 3. (3) The deadweight loss from the government tax is: a. $50. b. $100. c. $125. d. $4250. e. None of the above. 4. (3) We notice that both the price and equilibrium quantity of Michael Jackson stories rises. These increases suggest that: a. The supply curve has shifted out and the demand curve has stayed the same. b. The supply curve has shifted in and the demand curve has stayed the same. c. The demand curve has shifted out and the supply curve has stayed the same. d.
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exam2 - ECONOMICS 300 EXAM 2 SPRING 2004 PLEDGE NAME Use...

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