Econ 251 Quiz 2

Econ 251 Quiz 2 - Econ 251 Quiz #2 Due Wednesday, Sep. 22...

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Econ 251 Quiz #2 Due Wednesday, Sep. 22 in class 1. Referring to the figure above, the price elasticity of demand when the price increases from $5 to $7 is a. 2 b. 1 c. 1.33 d. 1.66 2. When the price increases from $5 to $7 in the previous problem, revenue _____________, indicating that demand is ________ in that range. a. Increases; elastic b. Decreases; inelastic c. Decreases; elastic d. Increases; inelastic Demand equation: P = 16 – Q d Supply equation: P = 1 + 2Q s 3. The demand and supply equations above describe the market for iPhone cases, what is the marginal cost of producing the 10 th iPhone case? a. $6 b. $21 c. $31 d. $35
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4. From the above demand and supply equations, the equilibrium price (P*), quantity (Q*), and consumer surplus (CS) are a. P*=$5, Q*=6, CS=$25. b. P*=$5, Q*=11, CS=$50. c. P*=$11, Q*=5, CS=$12.5. d. P* = $11, Q* = 5, CS = $30 5. If the government imposes a price ceiling at $5 in the same market for iPhone cases, what would deadweight loss in the above market for iPhone cases be? a.
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Econ 251 Quiz 2 - Econ 251 Quiz #2 Due Wednesday, Sep. 22...

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