principles of microeconomics practice exam#3 with answer keys
Exam 3
Directions: Identify the letter of the choice that best completes the statement or answers the question. Then mark your response on the answer sheet. Unless otherwise stated, demand curves are negatively sloped and supply curves are positively sloped. The midpoint and point formulae for elasticity are, respectively:
____ 1. If the government wants to reduce smoking, it should impose a tax on
a.
buyers of cigarettes.
b.
sellers of cigarettes.
c.
either buyers or sellers of cigarettes.
d.
whichever side of the market is less elastic.
Figure 6-23
____ 2. Refer to Figure 6-23. The amount of the tax burden borne by producers is _____ per unit.
a.
$4.
c.
$6.
b.
$5.
d.
$10.
Figure 6-24
Suppose the government imposes a $2 per unit tax on this market.
____ 3. Refer to Figure 6-24. Suppose D1 represents the demand curve for gasoline in both the short run and long run, S1 represents the supply curve for gasoline in the short run, and S2 represents the supply curve for gasoline in the long run. After the imposition of the $2, the price paid by buyers will be
a.
higher in the long run than in the short run.
b.
higher in the short run than in the long run.
c.
equivalent in the short run and the long run.
d.
unable to be determined without additional information.
Table UGA24UF20
P = 330 - 2Q
P = 100
____ 4. Refer to Table UGA24UF20. What is the deadweight loss if the government imposes a $30 per unit tax?
a.
$0
c.
$3,000
b.
$13,225
d.
$225
____ 5. Refer to Table UGA24UF20. What is the price paid by consumers after a $30 per unit tax is imposed?
a.
$130
c.
$100
b.
$115
d.
$70
____ 6. Melissa buys an iPod for $120 and gets consumer surplus of $80. If she had bought the iPod on sale for $90, what would her consumer surplus have been?
a.
$120
c.
$90
b.
$80
d.
$110
____ 7. Consider how health insurance affects the quantity of healthcare services performed.
Directions: Identify the letter of the choice that best completes the statement or answers the question. Then mark your response on the answer sheet. Unless otherwise stated, demand curves are negatively sloped and supply curves are positively sloped. The midpoint and point formulae for elasticity are, respectively:
____ 1. If the government wants to reduce smoking, it should impose a tax on
a.
buyers of cigarettes.
b.
sellers of cigarettes.
c.
either buyers or sellers of cigarettes.
d.
whichever side of the market is less elastic.
Figure 6-23
____ 2. Refer to Figure 6-23. The amount of the tax burden borne by producers is _____ per unit.
a.
$4.
c.
$6.
b.
$5.
d.
$10.
Figure 6-24
Suppose the government imposes a $2 per unit tax on this market.
____ 3. Refer to Figure 6-24. Suppose D1 represents the demand curve for gasoline in both the short run and long run, S1 represents the supply curve for gasoline in the short run, and S2 represents the supply curve for gasoline in the long run. After the imposition of the $2, the price paid by buyers will be
a.
higher in the long run than in the short run.
b.
higher in the short run than in the long run.
c.
equivalent in the short run and the long run.
d.
unable to be determined without additional information.
Table UGA24UF20
P = 330 - 2Q
P = 100
____ 4. Refer to Table UGA24UF20. What is the deadweight loss if the government imposes a $30 per unit tax?
a.
$0
c.
$3,000
b.
$13,225
d.
$225
____ 5. Refer to Table UGA24UF20. What is the price paid by consumers after a $30 per unit tax is imposed?
a.
$130
c.
$100
b.
$115
d.
$70
____ 6. Melissa buys an iPod for $120 and gets consumer surplus of $80. If she had bought the iPod on sale for $90, what would her consumer surplus have been?
a.
$120
c.
$90
b.
$80
d.
$110
____ 7. Consider how health insurance affects the quantity of healthcare services performed.