Intermediate Microeconomics: A Modern Approach, Seventh Edition

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ECONOMICS 300 EXAM 2 SPRING 2005 PLEDGE:____________________________ NAME:______________________________ 1. (3) If the market price is $5 and a demand curve has the equation Q D = 50 – 2P, then the net consumer’s surplus is: a. 400 b. 500 c. 600 d. 800 2. (4) Bill wears two types of cologne, Hugo and D&G. A bottle of Hugo costs $10, while a bottle of D&G costs $20. Bill views these two goods as perfect substitutes and his indifference curves all have the slope of -1. Which of the following statements are true? a. Bill's income expansion path will follow the axis on which D&G is plotted. b. Bill's Engel curve for Hugo has a slope of 10. c. Bill's Engel curve for D&G has a positive slope of 20. d. Hugo is an inferior good. e. None of the above. 3. (3) Total revenue is maximized when. a. Marginal revenue is equal to one. b. Price elasticity is equal to negative one. c. Price elasticity is equal to zero. d. Quantity demanded is equal to zero. 4. (6) When the price of apples is 50 cents a pound, the total quantity demanded is 100 pounds. If the price elasticity is –2 at that price, what quantity would be demanded if the price fell to 20 cents a pound?
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2 5. (3) If preferences are quasilinear, then one interpretation of the net consumer surplus is: a. The amount of money needed to induce the consumer not to consume any of
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This homework help was uploaded on 01/31/2008 for the course ECON 300 taught by Professor Nonnenmacher during the Spring '08 term at Allegheny.

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05 exam2 - ECONOMICS 300 EXAM 2 SPRING 2005 PLEDGE NAME 1(3 If the market price is $5 and a demand curve has the equation QD = 50 2P then the net

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