2.7-2.9 Econ Quiz

In order to be binding, a price floor must be [ ] the equilibrium price.

• above

• below

In order to be binding, a price ceiling must be [ ] the equilibrium price.

• above

• below

If a nation's income increases by 5% and quantity demanded for sports cars rises by 15%, income elasticity of demand for sports cars is

• 3

• -3

• 0.33

• -0.33

The pre-tax consumer surplus would be

• P6-L-P3

• P6-J-P5

• P3-L-P1

• P2-N-P1

The post-tax consumer surplus would be

• P6-L-P3

• P6-J-P5

• P3-L-P1

• P2-N-P1

The post-tax producer surplus would be

• P6-L-P3

• P6-J-P5

• P3-L-P1

• P2-N-P1

The tax revenue is represented by

• P5-J-N-P2

• P5-J-M-P3

• JLN

• JKL

The deadweight loss is represented by

• P5-J-N-P2

• P5-J-M-P3

• JLN

• JKL

The producer's net price (after tax) is

• P1

• P2

• P3

• P4

The cost of the tax is represented by

• P6-P5

• P5-P2

• P3-P2

• P6-P1