ECON 2100 Final: ECON 2100 Kennesaw State ECON2100 Summer2010 FinalExamC

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turquoisegnu128

31 Jan 2019

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Econ 2100 (summer 2010 sections 05 and 06) The ____________________ is defined as a period of time during which the amount hired/used of at least one input is equal to some predetermined level (based upon a previous decision). Consider a market in which demand is relatively inelastic and supply is relatively elastic. The short run supply curve of a firm operating in a perfectly competitive market is the portion of the marginal cost curve which lies above the average variable cost. Curve. the portion of the marginal cost curve which lies below the average total cost curve. a horizontal line at the prevailing market price. A decrease in the price of plastic (an input used in the production of dvd players). An increase in the market price of dvd players. A increase in the number of sellers of dvd players. An improvement in the technology used to produce dvd players.

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If a tax is imposed on a market with inelastic demand and elastic supply, then the burden of the tax will be shared equally

a) between buyers and sellers.

b) buyers will bear most of the burden of the tax.

c) sellers will bear most of the burden of the tax.

d) it is impossible to determine how the burden of the tax will be shared.

silverraccoon818

2. If the government decides to levy a small excise tax on the buyers in a perfectly competitive market in which the elasticity of demand is greater than the elasticity of supply, then we can conclude that: (A) The buyers will bear all of the tax (B) The sellers will bear all of the tax (C) The buyers will bear more of the tax than sellers ((D) The sellers will bear more of the tax than buyers YE) The government will bear most of the tax (F) It is not possible to tell who will bear most of the tax without additional information (G) The tax will be shared equally between the buyers and the sellers (H) There will be a smaller amount of excess burden than there would have been if the elasticity of supply is greater than the elasticity of demand (I) all of the above (J) none of the above

Please explain/prove your answers. Are the following statements true or false?

A. A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

B. If the government places a $2 tax in the market, the seller bears $2 of the tax burden.

C. Buyers and sellers rarely share the burden of a tax equally.

D. When a tax of $1.00 per gallon is imposed on sellers of gasoline, the supply curve for gasoline shifts upward, but by less than $1.00.

E. If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour, then a shortage of labor will exist.

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ECON 2100 Final: ECON 2100 Kennesaw State ECON2100 Summer2010 FinalExamC

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