Quiz 1B_BSC II_A

Quiz 1B_BSC II_A - BSc II Sec A Microeconomics II Lahore School of Economics Microeconomics II BSc II Section A Quiz 1 60 Points Quiz 1B Suggested

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BSc II – Sec A Microeconomics II Quiz 1B 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 Producer surplus is measured as the a. area under the demand curve above market price. b. entire area under the supply curve. c. area under the demand curve above the supply curve. d. area above the supply curve up to the market price. In an unregulated, competitive market producer surplus exists because some a. consumers are willing to pay more than the equilibrium price. b. producers are willing to take more than the equilibrium price. c. producers are willing to sell at less than the equilibrium price. d. consumers are willing to purchase, but only at prices below equilibrium price. Price ceilings can result in a net loss in consumer surplus when the ______________ curve  is ______________. a. demand; very elastic b. demand; very inelastic c. supply; very inelastic d. none of the above; price ceilings always increase consumer surplus. If a monopoly discovers that the demand for its output has become more elastic at the  original output level, then it will respond by a. producing more and setting a higher price b. setting a lower price c. setting a higher price. d. producing more while leaving price unchanged - 1 -
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BSc II – Sec A Microeconomics II Quiz 1B Figure 9.4 Suppose the market in Figure 9.4 is currently in equilibrium.  If the government establishes  a price floor of $50, how many widgets will be sold? a. 20 b. 30 c. 40 d. 50 e. 60 Refer to Figure 9.4.  If the government establishes a price floor of $40 and government  purchases the surplus over quantity demanded, producer surplus will a. fall by $275. b. fall by $500. c. remain the same. d. rise by $275. e. rise by $500. - 2 -
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BSc II – Sec A Microeconomics II Quiz 1B Refer to Figure 9.4.  If the government establishes a price floor of $40 and purchases the  surplus, total consumer and producer surplus will be a. $15. b.
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This note was uploaded on 02/13/2012 for the course ECON 121 taught by Professor Adam during the Spring '11 term at Bunker Hill.

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Quiz 1B_BSC II_A - BSc II Sec A Microeconomics II Lahore School of Economics Microeconomics II BSc II Section A Quiz 1 60 Points Quiz 1B Suggested

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