2007midtermMC-ans

2007midtermMC-ans - 1 .citsale si dnamed )D .citsaleni si...

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Econ 110 (L3) Midterm Exam Spring, 2007 Name___________________________________ ID______________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A tax is imposed on the sellers of a product. The consumer will pay the full amount of the tax if A) demand is perfectly elastic. B) demand is perfectly inelastic. C) demand is inelastic. D) demand is elastic. 1) 2) In the above figure, a price ceiling of $4 would A) result in a surplus in the short run but have no effect in the long run. B) result in a shortage in the long run. C) have no effect. D) result in a surplus in the long run. 2) 1
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3) The figure illustrates the demand for magazines. Newsagents will maximize their total revenue when they ________. A) sell 750 magazines a day B) charge $2.50 a magazine C) sell as many magazines as they can D) sell 375 magazines a day 3) 4) A fall in the price of lemons from $10.50 to $9.50 per bushel increases the quantity demanded from 19,200 to 20,800 bushels. The price elasticity of demand is A) 0.80. B) 1.20. C) 8.00. D) 1.25. 4) 2
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5) In the above figure, the price paid by the buyer before the tax is ________ per compact disc, and the price paid by the buyer after the tax is ________ per compact disc. A) $20; $20 B) $30; $30 C) $20; $30 D) $30; $20 5) 6) Assuming that your demand for gasoline is inelastic, when the price of gasoline falls, which of the following is most likely to occur? A) Your demand curve for gasoline will shift rightward. B) Your total expenditure on gasoline will decrease. C) Your total expenditure on gasoline will increase. D) Your demand curve for gasoline will shift leftward. 6) 3
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7) What area in the above figure is the producer surplus at the efficient quantity? A)
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This note was uploaded on 05/21/2011 for the course ECON 110 taught by Professor Tan during the Spring '07 term at HKUST.

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2007midtermMC-ans - 1 .citsale si dnamed )D .citsaleni si...

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