practiceexam2B - Consider the market for desks, where...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Consider the market for desks, where demand and supply are estimated by the following equations: Demand: Q d = -2P +120 Supply: Q s = P – 30 1. At what level of desk production would allocative efficiency be satisfied? a. 20 b. 50 c. 120 d. 30 2. If the government sets a price ceiling of $55 in the market for desks, which of the following would occur? a. There will be a shortage of 15 desks. b. There will be a surplus of 15 desks. c. The will be a shortage of 10 desks. d. There will be no surplus or shortage since the price ceiling is ineffective. 3. If, instead of a price ceiling, the government sets a quota of 10 desks in the market for desks, which of the following will occur? a. The price of desks will rise to $20. b. The price of desks will rise to $100. c. Consumer surplus will fall from $100 to $25. d. Producer surplus will rise from $200 to $250. 4. Tax incidence is a. April 15th. b. the requirement that sellers pay taxes directly to the government. c. the division of the burden of tax between the seller and buyer. d. the amount by which consumer prices fall as a result of a tax. 5. Consider the graph below. What is the tax that is imposed in this market?
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
0 10 20 30 40 50 60 70 80 90 100 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 Quantity Price a. $2 b. $4 c. $10 d. $20 6. As a result of the tax in the market above, which of the following is true? a.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/06/2012 for the course ECON 251 taught by Professor Blanchard during the Summer '08 term at Purdue University.

Page1 / 5

practiceexam2B - Consider the market for desks, where...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online