Figure 8-3

The vertical distance between points A and C represents a tax in the market.

20. Refer to Figure 8-3. The equilibrium price before the tax is imposed is

a.	P1.
b.	P2.
c.	P3.
d.	P4.

21. Refer to Figure 8-3. The price that buyers effectively pay after the tax is imposed is

a.	P1.
b.	P2.
c.	P3.
d.	P4.

22. Refer to Figure 8-3. The price that sellers effectively receive after the tax is imposed is

a.	P1.
b.	P2.
c.	P3.
d.	P4.

23. Refer to Figure 8-3. The per unit burden of the tax on buyers is

a.	P3 - P1.
b.	P3 - P2.
c.	P2 - P1.
d.	P4 - P3.

24. Refer to Figure 8-3. The per-unit burden of the tax on sellers is

a.	P3 - P1.
b.	P3 - P2.
c.	P2 - P1.
d.	P4 - P3.

25. Refer to Figure 8-3. The amount of the tax on each unit of the good is

a.	P3 - P1.
b.	P3 - P2.
c.	P2 - P1.
d.	P4 - P3.

26. Refer to Figure 8-3. The amount of tax revenue received by the government is equal to the area

a.	P3ACP1.
b.	ABC.
c.	P2DAP3.
d.	P1CDP2.

27. Refer to Figure 8-3. The amount of deadweight loss associated with the tax is equal to

a.	P3ACP1.
b.	ABC.
c.	P2ADP3.
d.	P1DCP2.

28. Refer to Figure 8-3. The loss in consumer surplus caused by the tax is measured by the area

a.	P1P3AC.
b.	P3ABP2.
c.	P1P3ABC.
d.	ABC.

29. Refer to Figure 8-3. The loss in producer surplus caused by the tax is measured by the area

a.	ABC.
b.	P1P3ABC.
c.	P1P2BC.
d.	P1C0.

30. Refer to Figure 8-3. Which of the following equations is valid for the tax revenue that the tax provides to the government?

a.	Tax revenue = (P2 - P1)xQ1
b.	Tax revenue = (P3 - P1)xQ1
c.	Tax revenue = (P3 - P2)xQ1
d.	Tax revenue = (P3 - P1)x(Q2 - Q1)

31. Refer to Figure 8-3. Which of the following equations is valid for the deadweight loss of the tax?

a.	Deadweight loss = (1/2)(P2 - P1)(Q2 + Q1)
b.	Deadweight loss = (1/2)(P3 - P1)(Q2 + Q1)
c.	Deadweight loss = (1/2)(P3 - P2)(Q2 - Q1)
d.	Deadweight loss = (1/2)(P3 - P1)(Q2 - Q1)

Table 13-5

The Flying Elvis Copter Rides

Quantity	Total Cost	Fixed Cost	Variable Cost	Marginal Cost	Average Fixed Cost	Average Variable Cost	Average Total Cost
0	$50	$50	$0	--	--	--	--
1	$150	A	B	C	D	E	F
2	G	H	I	$120	J	K	L
3	M	N	O	P	Q	$120	R

32. Refer to Table 13-5. What is the value of A?

a.	$25
b.	$50
c.	$100
d.	$200

33. Refer to Table 13-5. What is the value of B?

a.	$25
b.	$50
c.	$100
d.	$200

34. Refer to Table 13-5. What is the value of C?

a.	$25
b.	$50
c.	$100
d.	$200

35. Refer to Table 13-5. What is the value of G?

a.	$30
b.	$120
c.	$220
d.	$270

36. Refer to Table 13-5. What is the value of L?

a.	$60
b.	$135
c.	$240
d.	$270

37. Refer to Table 13-5. What is the value of O?

a.	$40
b.	$140
c.	$360
d.	$410

38. The most likely explanation for economies of scale is

a.	coordination problems.
b.	specialization of labor.
c.	increasing marginal cost.
d.	decreasing marginal cost.

39. In the long run Firm A incurs total costs of $1,050 when output is 30 units and $1,200 when output is 40 units. Firm A exhibits

a.	diseconomies of scale because total cost is rising as output rises.
b.	diseconomies of scale because average total cost is rising as output rises.
c.	economies of scale because total cost is rising as output rises.
d.	economies of scale because average total cost is falling as output rises.

40. When a firm experiences constant returns to scale,

a.	long-run average total cost is unchanged, even when output increases.
b.	long-run marginal cost is greater than long-run average total cost.
c.	long-run marginal cost is less than long-run average total cost.
d.	the firm is likely to experience coordination problems.