ECON 212 Exam 2 (UNL) WITH 100% VERIFIED
SOLUTIONS
The cross-price elasticity of electricity with respect to the price of natural gas has been
estimated as being equal to 0.2. This implies that correct answers electricity and natural gas
are substitutes.
If the income elasticity of demand for a good is negative, the good is said to be a(n): correct
answers inferior good.
The long-run price elasticity of supply of crude oil is _____ the short-run price elasticity of
supply of crude oil. correct answers greater than
The supply curve for a good will be more elastic if: correct answers production inputs are
readily available at a relatively low cost
If two goods are complementary, one can assume that the cross-price elasticity of demand for
these goods is: correct answers less than 0
Consumer surplus is represented by the area _____ the demand curve and _____ the market
price. correct answers below; above
Rapidly increasing health costs have been a major political concern since at least 1992.
Suppose the government sets the maximum price for a normal doctor's visit at $20 to control
rising health costs but the current market price is $40. What will happen? correct answers
More people will try to visit the doctor, but there will be fewer doctors willing to see patients
at that price.
If the minimum wage is a binding price floor, then: correct answers the number of workers
who want to work will be greater than the number of jobs available.
A price ceiling on a good often results in: correct answers black market or underground
transactions of the good
Inefficient allocations of goods to consumers often result from: correct answers price ceilings
The system of taxicab medallions in New York City is an example of a: correct answers
quantity control
The difference between the demand price and the supply price at the quota limit amount is
the: correct answers quota rent
If an excise tax is imposed on automobiles and collected from consumers: correct answers the
demand curve will shift downward by the amount of the tax
If demand is perfectly inelastic and the supply curve is upward sloping, then the burden of an
excise tax is: correct answers borne entirely by consumers
SOLUTIONS
The cross-price elasticity of electricity with respect to the price of natural gas has been
estimated as being equal to 0.2. This implies that correct answers electricity and natural gas
are substitutes.
If the income elasticity of demand for a good is negative, the good is said to be a(n): correct
answers inferior good.
The long-run price elasticity of supply of crude oil is _____ the short-run price elasticity of
supply of crude oil. correct answers greater than
The supply curve for a good will be more elastic if: correct answers production inputs are
readily available at a relatively low cost
If two goods are complementary, one can assume that the cross-price elasticity of demand for
these goods is: correct answers less than 0
Consumer surplus is represented by the area _____ the demand curve and _____ the market
price. correct answers below; above
Rapidly increasing health costs have been a major political concern since at least 1992.
Suppose the government sets the maximum price for a normal doctor's visit at $20 to control
rising health costs but the current market price is $40. What will happen? correct answers
More people will try to visit the doctor, but there will be fewer doctors willing to see patients
at that price.
If the minimum wage is a binding price floor, then: correct answers the number of workers
who want to work will be greater than the number of jobs available.
A price ceiling on a good often results in: correct answers black market or underground
transactions of the good
Inefficient allocations of goods to consumers often result from: correct answers price ceilings
The system of taxicab medallions in New York City is an example of a: correct answers
quantity control
The difference between the demand price and the supply price at the quota limit amount is
the: correct answers quota rent
If an excise tax is imposed on automobiles and collected from consumers: correct answers the
demand curve will shift downward by the amount of the tax
If demand is perfectly inelastic and the supply curve is upward sloping, then the burden of an
excise tax is: correct answers borne entirely by consumers
