Practice_exam1_A

Practice_exam1_A - page 1 of 8 Economics 2 Winter 2011 your...

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page 1 of 8 Economics 2 your name _______________________________ Winter 2011 your TA’s name __________________________ day and time of your discussion section ________ PRACTICE EXAM 1A DIRECTIONS: No calculators, books, or notes of any kind are allowed. All papers and notebooks must remain closed and on the floor at all times throughout the exam, and students are not allowed to leave the examination room until finished. Answer all questions in the space provided with the exam. 100 points are possible on this exam. HINTS: Feel free to use either of the following formulas if you find them useful. Area of a triangle = (1/2) (base) (height) Area of a trapezoid = (1/2) (base1 + base2) (height) PART I: MULTIPLE CHOICE—circle the correct answer (4 points each, 68 points total) 1.) In general, a tax imposed on the consumers of a good results in a.) an increase in producer surplus and an increase in total economic surplus b.) a decrease in producer surplus and a decrease in total economic surplus c.) a decrease in producer surplus and an increase in total economic surplus d.) an increase in producer surplus and a decrease in total economic surplus 2.) Which of the following is usually an accurate statement about the effect of a subsidy paid to the producers of a good? a.) the gain in producer surplus is more than the loss in consumer surplus b.) the gain in producer surplus is more than the gain in consumer surplus c.) the gain in producer surplus is more than the cost to taxpayers of the subsidy d.) the gain in producer surplus is less than the cost to taxpayers of the subsidy 3.) The change in total economic surplus from producing one more unit of a good can be calculated from a.) price minus marginal cost b.) price minus average cost c.) price minus the tax rate d.) none of the above 4.) If marginal revenue is less than marginal cost, then a monopolist could increase profit by a.) increasing output and increasing the price b.) decreasing output and decreasing the price c.) decreasing output and increasing the price d.) increasing output and decreasing the price
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page 2 of 8 Question 5 refers to the following linear demand curve, for which the point X is halfway down. 5.) At the point labeled Y, a.) marginal revenue is greater than zero and elasticity is greater than one b.) marginal revenue is less than zero and elasticity is less than one c.) marginal revenue is less than zero and elasticity is greater than one d.) marginal revenue is greater than zero and elasticity is less than one
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This note was uploaded on 10/16/2011 for the course ECON 2 taught by Professor Kim during the Spring '08 term at UCSD.

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Practice_exam1_A - page 1 of 8 Economics 2 Winter 2011 your...

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