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Quiz 2
Quiz 2
1. Question 1
The price of a product changes from $8 to $9, and as a result, the quantity of the product demanded falls
from 20 to 15. What do you know about the price elasticity of this good?
2. Question 2
Which of the following is an effect/are effect of the imposition of a price ceiling? Select all that apply.
3. Question 3
The price of good X increases by 50%, and the consumption of good X decreases by 25%. What is the
price elasticity of demand of X?
0.25
0.5
0.75
2.0
4. Question 4
Which of the following figures is an accurate depiction of a price floor P_1 set by the government?
5. Question 5
Imposition of an excise tax on a good has what effect on the supply curve of a good?
6. Question 6
Assuming upward sloping supply curve and downward sloping demand curve, imposition of an excise tax
has which of the following effects on the equilibrium quantity of a good?
7. Question 7
A price floor is a government mandated minimum price in a market, and a price ceiling is a government
mandated maximum price in a market.
True
False
8. Question 8
Assuming upward sloping supply curve and downward sloping demand curve, imposition of an excise tax
has which of the following effects on the equilibrium price of a good?
9. Question 9
The price of potatoes is $5 and the equilibrium quantity is 250. Now, the government imposes an excise tax
of $1.50 on potatoes. The quantity demanded at the new equilibrium is 200. The tax revenue for the
government as a result of this tax is $300.
True
False
Cannot be determined
10. Question 10
Which of the following factors crucially determines the magnitude of incidence of an excise tax on the
consumers?
11. Question 11
Absolute value of elasticity along a linear demand curve decreases from left to right.
True
False
12. Question 12
The equilibrium price of laptops is $200. The government imposes an excise tax of $50 on the production of
laptops. Assuming demand is downward sloping and supply is upward sloping, which of the following
statements is true?
The demand for laptops will decrease due to higher production costs of laptops.
Producers will produce more laptops to make up for the fall in revenue shifting the supply curve
downwards.
Incidence of tax will be seen both on the consumers as well as the producers.
The new price consumers will have to pay for laptops is $250.