Answer questions 1-4 according to the following figure.
1. Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?
(A)less than 50 units
(B) 50 units
(C) between 50 units and 100 units
(D)greater than 100 units

2. Suppose a tax of $2 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed? (A) $3 (B) between $3 and $5 (C) between $5 and $7 (D) $7

3. Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed? (A) $3 (B) between $3 and $5 (C) between $5 and $7 (D) $7

4. Suppose a tax of $2 per unit is imposed on this market. Which of the following is most close to the true answer? (A) One-fourth of the burden of the tax will fall on buyers, and three-fourths of the burden of the tax will fall on sellers. (B) One-third of the burden of the tax will fall on buyers, and two-thirds of the burden of the tax will fall on sellers. (C) One-half of the burden of the tax will fall on buyers, and one-half of the burden of the tax will fall on sellers. (D) Three-fourths of the burden of the tax will fall on buyers, and one-fourth of the burden of the tax will fall on sellers.

5. A binding price floor will reduce a firm's total revenue (A) always. (B) when demand is elastic. (C) when demand is inelastic. (D) never.

6. Suppose a tax of $0.50 per unit on a good creates a deadweight loss of $100. If the tax is increased to $2.50 per unit, the deadweight loss from the new tax would be (A) $500. (B) $1,000. (C) $2,000. (D) $2,500.

7. If the tax on a good is increased from $1 per unit to $4 per unit, the deadweight loss from the tax increases by a factor of (A) 5. (B) 9. (C) 16. (D) 24.

8. A 10 percent increase in gasoline prices reduces gasoline consumption by about (A) 6 percent after one year and 2.5 percent after five years. (B) 2.5 percent after one year and 6 percent after five years. (C) 10 percent after one year and 20 percent after five years. (D) 0 percent after one year and 1 percent after five years.

9. The federal government is concerned about the negative effects of cigarette smoking in the United States. Suppose Congress is considering two plans. One plan would limit the production of cigarettes. The other would require manufacturers to include graphic photos on cigarette packages of people suffering cancer's effects. Which of the following statements is true? (A) Both programs would increase the price of cigarettes. (B) Both programs would reduce the quantity of cigarettes sold. (C) Both programs would decrease revenues for cigarette manufacturers. (D) All of the above are correct.

10. Assume for the United States that the opportunity cost of each airplane is 50 cars. Which of these pairs of points could be on the United States' production possibilities frontier? (A) (200 airplanes, 5,000 cars) and (150 airplanes, 4,000 cars) (B) (200 airplanes, 12,500 cars) and (150 airplanes, 15,000 cars) (C) (300 airplanes, 15,000 cars) and (200 airplanes, 25,000 cars) (D) (300 airplanes, 25,000 cars) and (200 airplanes, 40,000 cars)

11. Consider Frank's decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in a store and spend $7,200 on room and board. Frank's total cost of going to college is (A) $33,800. (B) $42,600. (C) $49,800. (D) $57,000 Answer questions 12-15 according to the following table. The demand schedule below pertains to sandwiches demanded per week. | Price | Harry's Quantity Demanded | Darby's Quantity Demanded | Jake's Quantity Demanded | | --- | --- | --- | --- | | $3 | 3 | 4 | 3 | | $5 | 1 | 2 | x |

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