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ECON 202 – 2nd Quiz KEY
\$ 12.00

19. When a tax is placed on a product, the price paid by buyer

18. Using the above figure, if your city imposes a tax of \$100 per apartment:

17. Suppose that a new advertising campaign extolling the virtues of apple juice is successful, and a major freeze destroys half of the country's apple crop. What happens to the price and quantity of apple juice?

16. If the equilibrium price of a good decreases and the equilibrium quantity of the good decreases, we can conclude that

15. A good for which demand decreases when income decreases is known as a(n) ________ good.

14. Assume that coffee and tea are substitutes. When the price of coffee increases

13. A government sometimes creates a surplus of a product by setting a minimum price at which the product may be sold to consumers. This is called a

12. Suppose that there has been a decline in the price of pork. What effect will this have on the market for beef?

11. An important determinant of the amount of grains harvested next year by Ethiopian farmers is the amount of seeds planted this year. Given that Western nations have guaranteed to donate five hundred tons of grain next year, this year the Ethiopian farmers will:

10. A ban on imports will ________ the price domestic consumers pay for the good, and ________ the amount of the good consumed by domestic consumers.

9. Suppose that the government sets a maximum price for milk at \$5 a gallon and the equilibrium price of a gallon is \$3. How much quantity traded will this maximum price lead to?

8. A tax wedge is a consequence of a tax on a good because the tax

7. The Law of Demand can be explained as

6. From Figure 1 on the figure sheet, which of the following is the best example of the results in this graph? In the lumber market there has been

5. From Figure 1 on the figure sheet, the market for good X is initially in equilibrium at \$5.00. The government then places a per-unit tax on good X, as shown by the shift of S1 to S2. As a result,

4. A price ceiling

3. An effective minimum wage law will

2. A supply curve is defined as the relationship between

1. Suppose that in October the price of a cup of cafe latte was \$1.50 and 400 lattes were consumed. In November the price of a latte was \$2.00 and 200 lattes were consumed. What might have caused this change?

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