Exam 3 Questions- Extra Credit

Exam 3 Questions- Extra Credit - Name: Jonathan Beeco Due:...

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Name: Jonathan Beeco Section: 036 Due: 14 th  November Extra Credit Questions on Taxation and Externalities 1.  Which of the following are the most inelastic? a.   d ε  = -2 b.   d  = -0.5 c.   d  = -0.2 d.   d  =  - e.   d  = 0 2.  Which of the following correspond to perfectly inelastic supply? a.   s  = 1 b.   s  = 0 c.  s  =  d.  none of the above e.  b and c are both correct 3.  Taxing a market where the good is in perfectly inelastic supply will result in which of the  following: a.  no change in price b.  an increase in price c.  no deadweight loss d.  (a) and (c) are correct e.  (b) and (c) are correct 4.  Taxing a market where there is a perfectly inelastic demand for the good will result in which of  the following? a.  no change in price b.  an increase in price c.  no deadweight loss d.  (a) and (c) are correct e.  (b) and (c) are correct 5.  What can be said about consumer surplus before and after a tax when the supply of the good  being taxed is perfectly inelastic? a.  it will increase, because the supply side will bear the full burden of the tax b.  it will decrease, because the price will rise c.  it will remain unchanged because the supply side will bear the full burden of the tax d.  it will increase, because the price will remain unchanged
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e.  none of the above are true 6. The price of widgets is $10 before a tax is imposed, after the tax the price consumers pay is  $15 and the price producers receive is $8, what can you conclude about the relative  elasticities of demand and supply? a.
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This note was uploaded on 04/07/2008 for the course ECON 211 taught by Professor Johnson during the Fall '07 term at Clemson.

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Exam 3 Questions- Extra Credit - Name: Jonathan Beeco Due:...

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