practiceexam2A

# practiceexam2A - 1 The minimum wage is an example of a a...

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Unformatted text preview: 1. The minimum wage is an example of a. a price ceiling. b. a price floor. c. a quota. d. a shortage. 2. In which of the following markets would consumers bear the greatest burden of a tax? a. A market where ε d = 0 and ε s = 3. b. A market where ε d = 126 and ε s = 100. c. A market where ε d = 1 and ε s = 1. d. A market where ε d = ∞ and ε s = 19. 3. In which of the following markets would the deadweight loss from taxation be the smallest? a. A market where ε d = 0 and ε s = 3. b. A market where ε d = 126 and ε s = 100. c. A market where ε d = 1 and ε s = 1. d. A market where ε d = ∞ and ε s = 19 4. A quota of 800 million barrels a week has been set in the oil market. The equilibrium in the market for oil is 1 billion barrels a week at an equilibrium price of \$100 per barrel. Which of the following would you expect to see as a result of the quota? a. The price of oil will stay at \$100, but the quantity demanded will be higher than the quantity supplied. b. The price of oil will stay at \$100, but the quantity supplied will be higher than the quantity demanded. c. The price of oil will fall below \$100. d. The price of oil will rise above \$100. 5. Lisa’s income is \$15. The price of milk (per gallon) is \$3 and the price for chocolate is \$6 per pound. What is the equation of Lisa’s budget line? (M = quantity of milk and C = quantity of chocolate) a. 3C + 6M = 15 b. 45-18C = 6M c. 3M + 6C = 15 d. 2C + M = 15 6. Lisa’s income is \$15. The price of milk (per gallon) is \$3 and the price for chocolate Lisa’s income is \$15....
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## This note was uploaded on 02/06/2012 for the course ECON 251 taught by Professor Blanchard during the Summer '08 term at Purdue.

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practiceexam2A - 1 The minimum wage is an example of a a...

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