ECF1100 Mid-Semester Test (01) with Answer.docx

Supply is highly inelastic and demand is elastic b

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supply is highly inelastic and demand is elastic B. supply is highly elastic and demand is inelastic C. any market where both supply or demand is highly inelastic D. any market where both supply or demand is highly elastic 21. In the end, tax incidence: A. is determined by the policymakers B. falls entirely on the buyers C. depends on the relative elasticities of supply and demand D. falls entirely on the sellers 22. Which of the following is NOT an argument for restricting trade? A. the jobs argument B. the national security argument C. the infant industry argument D. the efficiency argument 23. When a country allows trade and becomes an importer of a good, consumer surplus: A. will increase and producer surplus will increase B. will decrease and producer surplus will decrease C. will increase and producer surplus will decrease D. will decrease and producer surplus will increase 24. If an increase in the number of workers leads to all workers becoming less productive, this situation is called: A. diminishing profitability B. diminishing marginal product C. increasing marginal product D. lessening production 25. The value of the marginal product of labour is equal to the change in: A. total revenue with the addition of the last worker B. total cost with the addition of the last worker C. total profit with the addition of the last worker D. marginal cost with the addition of the last worker 26. Identify the conditions where the labour demand curve will shift? (i) there is a change in productivity (ii) there is a change in output prices (iii) there is a change in wage levels A. (i) and (ii) B. (ii) and (iii) C. (i) and (iii) Page 5 of 7
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D. (i), (ii) and (iii) 27. Which of the following events would shift the labour supply curve? A. changes attitudes towards leisure B. changes in the number of women willing to work C. changing attitudes towards work D. all of the above Graph 3 This graph refers to the market for saddles in Argentina. 28. According to the Graph 3, the equilibrium price and the equilibrium quantity of saddles in Argentina before trade would be: A. P 1 , Q 2 B. P 1 , Q 1 C. P 0 , Q 0 D. P 0 , Q 1 29. According to the Graph 3, the price and quantity demanded of saddles in Argentina after trade would be: A. P 1 , Q 2 B. P 1 , Q 1 C. P 0 , Q 0 D. P 0 , Q 1 Page 6 of 7
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Graph 4 30. In Graph 4, consumer surplus after the tariff would be: A. A B. A + B C. A + C + G D. A + B + C + D +E + F --- End of Paper --- Page 7 of 7
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