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Unformatted text preview: Econ 100B (Grossman)—Winter 2011 Midterm 2—Version A February 17, 2011 Instructions: This is a closed-book, closed-notes exam. No calculators or electronic devices are allowed. Please turn off and put away all phones and other electronic devices. There are 8 multiple-choice questions and two free-response questions. Answer as many as you can in the time allowed. I do not expect everyone to be able to answer all questions. If you get stuck on something, I suggest moving on and coming back later when/if you have time. If you have a question, please raise your hand. Good luck! Multiple choice – 25 out of 50 pts. (8 qns., 3 pts. each + 1) Answer these questions on your Scantron. Your score will only be based on the marks on your Scantron. You will not receive any credit for anything written on your exam paper. You will receive 1 extra point for correctly writing your name, perm number, version (A,B,C, or D), and TA’s name on your Scantron. Exams without the version marked will be assigned the average score for all four versions. 1. Bristol owns the only liquor store in Talkeetna, Alaska. If the demand for bottles of Belvedere Vodka in Talkeetna is given by q = 200- 2 p and Bristol faces constant marginal cost of 40, what price should she set to maximize profits? (a) p = 40 (b) p = 80 (c) p = 70 (d) p = 60 2. (continued from above) The governor of Alaska decides to help Bristol’s company, so she imposes a $20 per bottle subsidy on vodka. How does consumer surplus change?...
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This note was uploaded on 05/08/2011 for the course ECON 100B taught by Professor Kilenthong during the Spring '08 term at UCSB.
- Spring '08