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1Exam #2Principles of Microeconomics – Econ1014Fall 2012Blue versionDo not open this exam or begin writing until you are told to begin.When you are told to begin, first write your name, student ID and examversion on your scantron form and fill in the bubbles for your name andID.Be sure to read directions carefully, use your exam copy to help you solvethe problems and transfer all your answers to the scantron form. Onlyanswers bubbled into the scantron form before time is called will beaccepted. No work on the exam copy itself will be graded.You will not be given time to fill in any scantron answers after time iscalled, so make sure to do this before time is called.You are allowed to use only a pencil, eraser and ruler for the exam. Anyother materials used or in sight are prohibited. In particular, you are NOTallowed the use of a calculator or any translation device.Failure to followthese directions is considered cheating and will result in a grade of zerofor this exam.You must stop writing and put down your pen or pencil immediatelywhen you are told it is time to stop the exam. Failure to follow thesedirections is considered cheating and will result in a grade of zero for thisexam.There will be 40 questions worth 1 point each and 8 questions worth 2points each out of a total of 56 points. Your score will then be weighted togive you a possible 200 points for the entire exam.Please choose the best answer possible in each case.
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21. (2 points) Refer to figure A: Using the point-slope formula, what is the price elasticity of demand when the market price is $8 per gallon? 1.-1 2.3/2 3.-2/3 4.-12/40 5.None of the above 2. Refer to Figure A: At which price are consumers of gasoline most price responsive? 1.$16 per gallon 2.$10 per gallon 3.$4 per gallon 4.Consumers are equally responsive to price changes at all prices along a single demand curve. 5.Impossible to determine with the information given 3. Refer to Figure A: Assuming no market failures have occurred, what is the economically efficient amount of gasoline consumption? 1.40 million gallons 2.60 million gallons 3.20 million gallons 4.Impossible to determine with the information given 5.None of the above 012345678910111213141516171819200102030405060708090100110120Price per gallon($)Quantity (millions of gallons of gasoline)SupplyDemandFigure A: Use this graph to answer the following 10 questions