quiz iii consumer and producer surplus. 1. determine the consumer surplus at the equilibrium price...
Post on 05-Jan-2016
212 Views
Preview:
TRANSCRIPT
Quiz III
Consumer and Producer Surplus
1. Determine the consumer surplus at the equilibrium price shown below.
0 10 20 30 40 50 60 70 80 90 100 110 120 130
1
2
3
4
5
6
7
8P
Q
S
D
2. Determine the total (consumer and producer) surplus at the equilibrium price shown below.
0 10 20 30 40 50 60 70 80 90 100 110 120 130
1
2
3
4
5
6
7
8P
Q
S
D
3. The deadweight loss resulting from an excise (consumption tax) is greater when:
• A. Demand and supply are inelastic
• B. Demand is less elastic
• C. Demand is more elastic
• D. Supply is inelastic elastic
• E. Demand is more inelastic
4. An excise (consumption) tax will generate more tax revenue when the demand for the good it is imposed on :
• A. is elastic
• B. is inelastic
• C. is vertical
• D. is more sensitive to a price change
• E. has a high income elasticity
5. You go to the mall with the intention of buying a certain sweater for $50. (You would not buy it if it were sold at a higher price.) The sweater is on sale; if you buy one at the full price of $50 you will get a second one for free. Your purchase will likely result in a consumer surplus:
• A. equal to $50 because you are getting a $50 sweater for free
• B. equal to zero because $50 was the maximum price you were willing to pay
• C. less than $50• D. more than $50 but less than $100• E. $100 because that is how much they are really
worth
top related