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? 3. (3) Total revenue is maximized when. 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:
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