When a consumers income increases the budget line a

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7)When a consumer’s income increases, the budget lineA)rotates outward and becomes steeper.B)rotates outward and becomes flatter.C)shifts outward and its slope does not change.D)shifts inward and its slope does not change.E)More information is needed to answer the question.
8)If demand for the firm’s output increases so that the price and marginal revenuerise, then
9)The government imposes a sales tax on a product. Sellers must send the tax to thegovernment. If demand for the product is perfectly inelastic, the incidence of a salestax falls on
10) Which of the following shifts Burrito Brothers’ATCcurve upward?IAn increase in the hourly wage that Burrito Brothers pays its workers.IIA increase in marginal product of Burrito Brothers workers.IIIAn increase in the fixed amount of liability insurance premiums that BurritoBrothers pays for its business.
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Chapter 7 / Exercise 11
Exploring Microeconomics
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ECO 2023 F I NAL EXAMF A LL 200611) The above figure shows the market for blouses. The government decides to imposea sales tax on sellers. Using the figure, the deadweight loss equalsA)$10,000.B)$20,000.C)$30,000.D)$40,000.E)None of the above answers is correct.
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12) The price elasticity of demand for wheat is 0.42. A drought cuts the supply ofwheat. What will happen to the farmers’ total revenue?
13) (This is an out-of-the-book question.) With respect to redistribution, one reason“The Big Tradeoff” exists is because
14) A lighthouse is an example of a _____ because it is _____.
ECO 2023 F I NAL EXAMF A LL 20066

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Term
Fall
Professor
Rush
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Exploring Microeconomics
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Chapter 7 / Exercise 11
Exploring Microeconomics
Sexton
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