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fall2010exam2B - Name Class Date ID B Introduction to...

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Name: ________________________ Class: ___________________ Date: __________ ID: B 1 Introduction to Microeconomics - Exam 2 Multiple Choice Identify the choice that best completes the statement or answers the question. Figure 8-1 ____ 1. Refer to Figure 8-1. Suppose the government imposes a tax of P’ - P’’’. The area measured by I+Y represents the a. total surplus before the tax. b. loss in consumer surplus due to the tax. c. deadweight loss due to the tax. d. loss in producer surplus due to the tax. ____ 2. When a factory is operating in the short run, ____ 3. Suppose that for a particular business there are no implicit opportunity costs. Then
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Name: ________________________ ID: B 2 Figure 8-2 The vertical distance between points A and B represents a tax in the market. ____ 4. Refer to Figure 8-2. The per-unit burden of the tax on sellers is Figure 7-7 ____ 5. Refer to Figure 7-7. Which area represents producer surplus when the price is P2? a. AHGB b. ACH c. BCG d. ABGD
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Name: ________________________ ID: B 3 ____ 6. Other things equal, the deadweight loss of a tax ____ 7. Corrective taxes that are imposed upon the producer of a nasty smell can be successful in reducing that smell because the tax makes the producer ____ 8. Economists disagree on whether labor taxes cause small or large deadweight losses. This disagreement arises primarily because economists hold different views about a. the importance of labor taxes imposed by the federal government relative to the importance of labor taxes imposed by the various states. b. the elasticity of labor demand. c. the elasticity of labor supply. d. the size of labor taxes. Table 13-10 Jimmy’s Gigaplots Factory Quantity of gigaplots Fixed Cost Variable Cost Total Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost 1 $13 $38 2 $28 3 $70 4 $64 5 $110 6 $108 7 $133 8 $185 ____
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