CAS EC 101 Study Guide - Midterm Guide: Economic Surplus, Coase Theorem, Externality
Midterm #2 Sample Questions (solutions are at the end) #2
____ 10. Caitlin would be willing to pay $50 to see Les Misérables, but buys a ticket for only $30. Caitlin values the
performance at
a.
$20.
b.
$30.
c.
$50.
d.
$80.
Graph 7-1
____ 11. Refer to Graph 7-1. When the price rises from P1 to P2, consumer surplus
a.
increases by an amount equal to A.
b.
decreases by an amount equal to B + C.
c.
increases by an amount equal to B + C.
d.
decreases by an amount equal to C.
____ 12. Total surplus in a market equals
a.
Value to buyers - Amount paid by buyers.
b.
Amount received by sellers - Costs of sellers.
c.
Value to buyers - Costs of sellers.
d.
Amount received by sellers - Amount paid by buyers.
Graph 8-3
____ 13. According to Graph 8-3, the price buyers pay after the tax is
a.
$16.
b.
$12.
c.
$8.
d.
$4.
____ 14. According to Graph 8-3, the reduction in consumer surplus caused by the tax would be
a.
$100.
b.
$80.
c.
$70.
d.
$60.
____ 15. The amount of deadweight loss from taxes depends on
a.
the price elasticity of demand and supply.
b.
how much of the tax revenue the government plans to spend.
c.
the product the government is planning to tax.
d.
All of the above are correct.
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CAS EC 101 Full Course Notes
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Document Summary
Midterm #2 sample questions (solutions are at the end) #2. Caitlin would be willing to pay to see les mis rables, but buys a ticket for only . Caitlin values the performance at: , , , . Total surplus in a market equals: value to buyers - amount paid by buyers, amount received by sellers - costs of sellers, value to buyers - costs of sellers, amount received by sellers - amount paid by buyers. According to graph 8-3, the price buyers pay after the tax is: , , , . According to graph 8-3, the reduction in consumer surplus caused by the tax would be: , , , . According to graph 9-3, the change in total surplus in argentina because of trade is: a, b, c, d. Use the figure shown to answer the following questions. Which price and quantity combination represents the social optimum: p1, q1, p2, q1, p1, q2, p2, q2.
