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Quiz 1A_BSC II _ A

# Quiz 1A_BSC II _ A - BSc II Sec A Microeconomics II Lahore...

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BSc II – Sec A Microeconomics II Quiz 1A Lahore School of Economics Microeconomics II BSc II – Section A Quiz 1 –  60 points Suggested Solutions: Any queries can be emailed or discussed in class Consumer surplus measures a. the extra amount that a consumer must pay to obtain a marginal unit of a good or  service. b. the excess demand that consumers have when a price ceiling holds prices below  their equilibrium. c.  the benefit that consumers receive from a good or service beyond what they  pay. d. gain or loss to consumers from price fixing. The government prefers an ad valorem tax to a specific tax that reduces the monopoly  output by the same amount because a.consumers are not harmed by the ad valorem tax b. the monopoly prefers the ad valorem tax c.consumers prefer the ad valorem tax d. the ad valorem tax transfers more revenue from the monopoly to the government - 1 -

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BSc II – Sec A Microeconomics II Quiz 1A Figure 9.3 Refer to Figure 9.3.  If the market is in equilibrium, the consumer surplus earned by the  buyer of the 100th unit is a. \$0.50. b. \$0.75. c. \$1.50. d. \$2.00. e. \$2.75. Refer to Figure 9.3.  If the market is in equilibrium, total consumer surplus is a. \$1. b. \$3. c. \$200. d. \$400. e. \$600. Refer to Figure 9.3.  If the government establishes a price ceiling of \$1.00, how many  pounds of berries will be sold? a. 200 - 2 -
BSc II – Sec A Microeconomics II Quiz 1A b. 300 c. 400 d. 600 e. 800 Which of the following policies could lead to a deadweight loss? a. price ceilings. b. price floors. c. policies prohibiting human cloning. d. all of the above. e. (a) and (b) only. If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at  16, then the deadweight loss from monopoly equals a. 21 b. 441 c. 882 d. 1764 Which of the following is NOT true about price floors?

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