econ 211 test 2 answers

econ 211 test 2 answers - Econ 211 Instructor: Patrick...

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Econ 211 Instructor: Patrick McLaughlin Test 2 : Choose the correct answer to each question and fill in the corresponding bubble on your answer sheet. There is only one answer to each question. There are 30 questions total; you have until the end of the period to finish. Good luck. 1. If OPEC cuts oil production in order to increase their total revenue, they know that the demand for oil in the global market is a. perfectly elastic. b. inelastic. c. unit elastic. d. elastic. e. equal to elasticity of supply 2. Total expenditure on a good is equal to a. The total supply b. The total demand c. The price times the quantity d. The height of the supply curve e. None of the above 3. Suppose a tax is imposed on sellers. The more inelastic the demand for a taxed item (hint: draw graphs), a. the smaller the deadweight loss from the tax. b. the larger the decrease in consumption because of the tax. c. the smaller the share of the tax paid by consumers. d. the smaller the revenue collected by the government e. All of the above are correct. 4. The above figure shows the market for blouses. The government decides to impose a sales tax on sellers. From the figure, which of the following must be true? a. Price elasticity of demand and elasticity of supply must be equal in absolute value terms. b. Consumers pay half of the tax, and suppliers pay half of the tax. c. The tax is $20 per blouse. d. All of the above are true.
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e. Only answers B) and C) are true 5. The above figure shows the market for gasoline. The government imposes a sales tax on sellers. The amount of revenue the government collects from the tax is: a. $0 b. $1000 c. $3000 d. $2000 e. $1500 6. In the above figure, which wage rate could be an effective (effective means has an effect; this is not the same as efficient) minimum wage in this labor market and what would be the resulting level of employment? a. A wage of W 2 and L 2 of labor would be employed. b. A wage of W 1 and L 2 of labor would be employed. c. A wage of W 2 and L 1 of labor would be employed. d. A wage of W 1 and L 1 of labor would be employed.
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e. None of the above 7. As Mary's income increases by 20 percent, her demand for canned tomato paste decreases by 10 percent. For Mary, canned tomato paste is ________ good. a. an inferior b. a normal c. a substitute d. a complement e. none of the above 8. In the above figure, if the market produces the efficient amount of purses then producer surplus equals triangle a. dce . b.
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econ 211 test 2 answers - Econ 211 Instructor: Patrick...

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