201-tutorial-4 - Econ 201 Tutorial#4 Date Week of Oct 11-17...

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Date: Week of Oct. 11-17, 2010 Coverage: Mainly Chapter 5 Welfare Economics, Externalities and Non-Classical Markets I. Multiple Choice Questions: 1. If the government imposes a price ceiling below the equilibrium price, then a. the quantity consumed will rise. b. consumer surplus will fall. c. consumer surplus may rise or fall. d. the price will rise. e. consumer surplus will rise. 2. If the government introduces a subsidy into a market, then a. consumer surplus will rise. b. the quantity consumed will rise. c. consumer surplus will fall. d. both a and b. e. both b and c. 3. Suppose demand is Qd=12-2P and supply is Qs=P. Producer surplus in equilibrium is a. $4 b. $8 c. $12 d. $16 e. $18 4. Continue from #3: The value of consumer surplus is a. $4 b. $8 c. $12 d. $16 e. $18 5. Currently Joe and Hana are consuming the same amount of strawberries, but Joe's demand curve is much more elastic than Hana's. Which statement is true? a. Hana's consumer surplus exceeds Joe's. b. Any comparison of consumer surplus depends on the price of strawberries. c. Hana's consumer surplus equals Joe's. d. No statement can be made comparing consumer surpluses. e. Joe's consumer surplus exceeds Hana's. 6. At the efficient quantity of a good, a. producer surplus exceeds consumer surplus by the greatest possible amount. b. total consumer surplus is zero. c. the sum of consumer surplus and producer surplus is maximized. d.
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201-tutorial-4 - Econ 201 Tutorial#4 Date Week of Oct 11-17...

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