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# exam2d - Introduction to Microeconomics Exam 2 April 2010...

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Introduction to Microeconomics Exam 2 April 2010 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Which of the following scenarios is not consistent with the Laffer curve? a. The tax rate is very high, and tax revenue is very high. b. The tax rate is moderate (between very high and very low), and tax revenue is relatively high. c. The tax rate is very low, and tax revenue is very low. d. The tax rate is very high, and tax revenue is very low. ____ 2. In which of these cases will the tax burden fall most heavily on buyers of the good? a. The demand curve and the supply curve are both relatively flat. b. The demand curve is relatively steep and the supply curve is relatively flat. c. The demand curve is relatively flat and the supply curve is relatively steep. d. The demand curve and the supply curve are both relatively steep. Table 13-9 Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts. The owner rents several small rooms in an office building in the suburbs for \$600 a month and has leased computer equipment that costs \$480 a month. Output (Instructional Modules per Month) Fixed Costs Variable Costs Total Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost 0 \$1,080 1 \$1,080 \$ 400 \$1,480 \$400 2 \$965 \$450 3 \$1,350 \$2,430 4 \$1,900 \$475 5 \$2,500 \$216 6 \$4,280 \$700 7 \$4,100 8 \$5,400 \$135 9 \$7,300 10 \$10,880 \$980 ____ 3. Refer to Table 13-9 . What is the average fixed cost for the month if 9 instructional modules are produced? a. \$150.00 b. \$811.11 c. \$108.00 d. \$120.00 Figure 6-12

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D S S after tax 2 4 6 8 10 12 14 16 quantity 1 2 3 4 5 6 7 8 9 price ____ 4. Refer to Figure 6-12 . The effective price received by sellers after the tax is imposed is a. \$5. b. \$4. c. \$3. d. \$7. ____ 5. Suppose that the equilibrium price in the market for widgets is \$5. If a law increased the minimum legal price for widgets to \$6, a. any possible increase in producer surplus would be smaller than the loss of consumer surplus. b. the resulting increase in consumer surplus would be larger than any possible loss of producer surplus. c. the resulting increase in consumer surplus would be smaller than any possible loss of producer surplus. d. any possible increase in producer surplus would be larger than the loss of consumer surplus. Figure 7-8 D S' S D' 25 50 75 100 125 150 175 200 Quantity 25 50 75 100 125 150 175 200 225 250 275 300 Price
____ 6. Refer to Figure 7-8. If the supply curve is S, the demand curve is D, and the equilibrium price is \$100, what is the producer surplus? a. \$1,250 b. \$5,000 c. \$625 d. \$2,500 ____ 7. The minimum points of the average variable cost and average total cost curves occur where a. the marginal cost curve lies below the average variable cost and average total cost curves. b.

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exam2d - Introduction to Microeconomics Exam 2 April 2010...

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