110s09mid2key - Brigham Young University Department of...

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1 Brigham Young University Department of Economics Economics 110 – Principles of Economics Professor Kerk Phillips – Spring Term 2009, section 1 Midterm #2 key 5/28 (Thu) – 5/29 (Fri) Testing Center This test is multiple choice, fill in your answers on the answer sheet and do not write on this exam. It is closed book and closed notes. There is no time limit and you may use calculators; either those provided by the testing center or your own as long as it is not a programmable calculator. Read all questions carefully before answering. 1. A decrease in the sales tax on gasoline would lead to a ___ in the total price paid by motorists, and a ___ in the net price received by gas stations. a) decrease, decrease b) increase, decrease c) decrease, increase d) increase, increase e) none of the above 2. A binding price floor causes… a) a shortage of the good b) a surplus of the good c) an equilibrium allocation where supply equals demand d) sometimes a shortage and sometimes a surplus e) none of the above 3. A real world example of a binding price ceiling is… a) the US sugar import quota b) price supports for agricultural products c) minimum wage laws d) all of the above e) none of the above 4. If the elasticity of supply is less than the elasticity of demand, then the burden of the tax … a) falls more heavily on consumers than producers b) falls more heavily on producers than consumers c) falls equally on consumers and producers d) is almost zero e) none of the above
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2 Use the following figure to answer questions 5 & 6. The supply and demand curves are straight lines. Prices are in dollars. S D 35 60 P Q 100 5. The amount of consumer surplus is: a) $3500 b) $2500 c) $1750 d) $1250 e) none of the above. 6.
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This note was uploaded on 02/28/2012 for the course ECON 100 taught by Professor Kerkl.phillips during the Winter '10 term at BYU.

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110s09mid2key - Brigham Young University Department of...

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