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ECON 1BO3 - TEST 2 V1 [QUESTIONS] - Winter 2010

# ECON 1BO3 - TEST 2 V1 [QUESTIONS] - Winter 2010 - Page 1 of...

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Page 1 of 11 McMaster University Department of Economics ECON 1B03 Midterm Test #2 VERSION 1 Instructor: Professor H Holmes Duration: 1.5 hours Total Number of Pages: 11 INSTRUCTIONS : Answer all questions on the scan sheets. USE AN HB PENCIL ONLY. Make sure you carefully fill in the bubbles. YOU MUST FILL IN YOUR STUDENT NUMBER, AND VERSION NUMBER ON THE SCAN SHEET OR YOUR GRADE WILL NOT BE RECORDED AND YOU WILL LOSE THE BONUS MARK. You may use the Casio FX calculator. Hand in the scan sheet and this test copy. TOTAL MARKS AVAILABLE : 45 NAME:____________________________________________________ STUDENT #: _______________________________________________ MUGSI ID: ________________________________________________

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Page 2 of 11 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. A price ceiling a. is a legal maximum on the price at which a good can be sold. b. is a legal minimum on the price at which a good can be sold. c. occurs when the price in the market is temporarily above equilibrium. d. will usually result in a market surplus. Figure 6-2 ____ 2. Refer to Figure 6-2 . A binding price ceiling would exist at a price of ____ 3. When binding price ceilings are imposed in a market ____ 4. Assume that the demand and supply curves for cars are elastic. If the government imposed a \$500 tax on the buyer of each car, we can assume that the
Page 3 of 11 Figure 6-10 ____ 5. Refer to Figure 6-10 . The equilibrium price in the market after the tax is imposed is a. \$1.00. b. \$3.50. c. \$5.00. d. \$6.00. ____ 6. Refer to Figure 6-10 . The price buyers will pay after the tax is imposed is ____ 7. Refer to Figure 6-10 . The price sellers receive after the tax is imposed is ____ 8. Refer to Figure 6-10 . The amount of the tax imposed in this market is ____ 9. Refer to Figure 6-10 . The amount of the tax that buyers would pay would be a. \$1.00. b. \$1.50. c. \$2.50. d. \$3.00.

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