Int Midterm Review

What is the equilibrium price in 1b?

What is the equilibrium quantity in 1b?

Is the market efficient?

• Yes

• No

The benefit suppliers receive in the market is called

• consumer surplus

• producer surplus

• total surplus

• deadweight loss

1d. Demand is

• elastic

• inelastic

• unit elastic

• perfectly inelastic

1d. Cross Price elasticity. These goods are:

• normal

• inferior

• substitutes

• complements

1d. Income elasticity. This goods is:

• normal

• inferior

• substitutes

• complements

1d. Supply is

• elastic

• inelastic

• unit elastic

• perfectly inelastic

1e. Who would have the higher tax incidence?

• Consumers

• Sellers

2a. The price of apples (x1) is $0.50 and the price of bananas is $1.00 (x2). What is the marginal rate of transformation (MRT)?

• 2

• 0.5

• 1

• 1.50