Problem_Set_1

Problem_Set_1 - Economics 2 Problem Set I Practice Only I....

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Economics 2 Problem Set I Practice Only I. Multiple Choice Questions (Briefly explain your answers) 1. Suppose the King of Foodnation decided that every one should be able to have a piece of cheese with their meal. Therefore, the King provides 50% of the price every one pays for their cheese. Most likely, the result of the King’s action will be a. an increase in total economic surplus b. a decrease in total economic surplus c. no effect on economic surplus d. a decrease in consumer surplus e. an increase in producer surplus 2. The more elastic supply is, the ______ the burden of the tax borne by _____. a. larger; consumers b. larger; producers c. smaller; consumers d. smaller; consumers and producers e. larger; consumers and producers 3. If a per unit tax is imposed on sellers, the more elastic demand is, the a. less likely the deadweight loss will be affected. b. smaller the deadweight loss. c.
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This note was uploaded on 12/26/2009 for the course ECON ECON 2 taught by Professor Hamilton during the Spring '09 term at UCSD.

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Problem_Set_1 - Economics 2 Problem Set I Practice Only I....

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