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##### ECON Final

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Question;PART A ? Questions 1 ? 7;Consider a market where demand is D: P = 30 ? Q and supply;is S: P = 0.5Q.;1. Equilibrium;quantity Qe is;a. \$17;b. \$18;c. \$19;d. \$20;2. Equilibrium;is price Pe;a. 10;b. 11;c. 12;d. 13;3. Consumer surplus;CS is;a. \$199;b. \$200;c. \$201;d. \$202;4. Producer surplus;PS is;a. \$98;b. \$99;c. \$100;d. \$101;5. Total;surplus TS is;a. \$220;b. \$300;c. \$323;d. \$444;6. When the;government imposes a price floor = \$20, disequilibrium between quantity;demanded and quantity supplied results in;a. Deficit =;10;b. Surplus =;10;c. Deficit =;30;d. Surplus =;30;7. Total;surplus TS? with the price floor is;a. \$220;b. \$225;c. \$230;d. \$235;PART B ? Questions 8 ? 28;Consider a market where demand is D: P = 40 ? Q and supply;is S: P = Q.;8. Equilibrium;quantity Qe is;a. 16;b. 18;c. 20;d. 22;9. Equilibrium;price Pe is;a. \$18;b. \$20;c. \$22;d. \$24;10. Consumer;surplus CS is;a. \$198;b. \$199;c. \$200;d. \$201;11. Producer;surplus PS is;a. \$198;b. \$199;c. \$200;d. \$201;12. Total;surplus TS is;a. \$390;b. \$394;c. \$396;d. \$400;Impose a specific tax T = \$4 on each unit sold in the above;market.;13. Post-tax;quantity Q? is;a. 16;b. 18;c. 20;d. 22;14. Post-tax;price P? is;a. \$18;b. \$20;c. \$22;d. \$24;15. Consumer;surplus CS? is;a. \$156;b. \$158;c. \$160;d. \$162;16. Producer;surplus PS? is;a. \$156;b. \$158;c. \$160;d. \$162;17. Tax;revenue TR of the government is;a. \$68;b. \$70;c. \$72;d. \$74;18. Total;surplus TS? is;a. \$390;b. \$394;c. \$396;d. \$400;Consider a market where demand is: P = 70 ? Q and supply is;S: P = Q.;19. Equilibrium;quantity Qe is;a. 35;b. 36;c. 45;d. 56;20. Equilibrium;price Pe is;a. \$34;b. \$35;c. \$36;d. \$37;21. Consumer;surplus CS is;a. \$610;b. \$612.5;c. \$615;d. \$648;22. Producer;surplus PS is;a. \$610;b. \$612.5;c. \$615;d. \$648;23. Total;surplus TS is;a. \$1,222;b. \$1,223;c. \$1,224;d. \$1,225;Construct a budget neutral subsidy in the above market.;24. Post-subsidy;quantity Q? is;a. 35;b. 36;c. 45;d. 56;25. Post-subsidy;price P? is;a. \$34;b. \$35;c. \$36;d. \$37;26. Consumer;surplus CS? is;a. \$610;b. \$612.5;c. \$615;d. \$648;27. Producer;surplus PS? is;a. \$610;b. \$612.5;c. \$615;d. \$648;28. Total;surplus TS is (do not forget to account for the subsidy expenditure SE);a. \$1,222;b. \$1,223;c. \$1,224;d. \$1,225;29. The;basic characteristic of the long run is that;A. barriers to entry prevent new firms from entering the industry.;B. the firm has sufficient;time to change the size of its plant.;C. the firm does not have sufficient time to cut its rate of output to;zero.;D. a firm does not have sufficient time to change the amounts of any of;the resources it employs.;30. The;law of diminishing returns indicates that;A. as extra units of a variable;resource are added to a fixed resource, marginal product will decline beyond;some point.;B. because of economies and diseconomies of scale a competitive firm's;long-run average total cost curve will be U-shaped.;C. the demand for goods produced by purely competitive industries is;downsloping.;D. beyond some point the extra utility derived from additional units of a;product will yield the consumer smaller and smaller extra amounts of;satisfaction.;31. Variable;cost is;A. the cost of producing one more unit of capital, say, machinery.;B. any cost which does not;change when the firm changes its output.;C. average total cost multiplied by the firm's output.;D. any cost that rises with output in the short run.;32. In the;above figure, curves 1, 2, 3, and 4 represent the;A. ATC, MC, AFC, and AVC curves respectively.;B. MC, AFC, AVC, and ATC curves respectively.;C. MC, ATC, AVC, and AFC;curves respectively.;D. ATC, AVC, AFC, and MC curves respectively.;33. Refer to;the above data. If product price is \$60, the firm will;A. shut down.;B. produce 4 units and realize a \$120 economic profit.;C. produce 6 units and;realize a \$100 economic profit.;D. produce 3 units and incur a \$40 loss.;34. Refer to;the above diagram for a pure monopolist. Monopoly price will be;A. e.;B. c.;C. b.;D. a.;35. Refer to;the above diagram for a pure monopolist. Monopoly output will be;A. between f and g.;B. h.;C. g.;D. f.

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