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Relative to the free market equilibrium, producer surplus after the implementation of this program has _______________ to  _____________. (Fill in the blanks.)

You have taken ECON 1101 Principles of Microeconomics and now as a marketing intern for a small local theater you need to recommend a price change to the manager of a theater who wants to increase its total revenue.  During their last season performance, the theater charged $8 per ticket and they sold 110 tickets. You find out that a similar theater (a competitor) charged $12 per ticket and they sold 90 tickets. Using the midpoint formula, the price elasticity of demand (in absolute value) in this locality is _________. Therefore, demand is _________. You would recommend a price _________________ because the total revenue would then __________. (Fill in the blanks.)

Consider the market for the Apple watch. Suppose that demand is perfectly elastic in the short run and supply is perfectly inelastic. If a tax is imposed in the market, the entire burden of the tax falls on___________, while ___________ surplus does not change. (Fill in the blanks.)

Who are the buyers in the economy?

Question 37 is based on the graph above, which represents the demand and supply curves in the market for some good. Suppose the government imposes a $8 tax. What is the total surplus in this market after the introduction of this policy?

Use the information below to answer questions 9 – 11. You are the Independent System Operator (ISO) in an electricity market. You have received the bid information in the table below for a double auction. Each buyer’s bid is an offer to buy one Mhw of electricity. Each seller’s bid is an offer to sell one Mhw of electricity. Buyer Bid (Offer to buy in $) Seller Bid (Offer to sell in $) Ali $200 Zitong $10 Alya $55 Zaved $70 Aysha $70 Zavi $200 Adnan $80 Zeenat $55 Abdul $10      

 Consider the following statements about income elasticity: For inferior goods, income elasticity is negative. For necessity goods, income elasticity is above one. When income elasticity for a good is more than one, the share of income spent on the good is higher with higher income.

Suppose that the price elasticity of demand for oil is 1.5 in the short run and 3.00 in the long run. If the price of gas increases from $2.00 to $2.50 per gallon, the quantity of gas demanded decreases by _________ in the short run and _________ in the long run. (Use the midpoint method for your calculations and fill in the blanks.)

Suppose Oreos and Chips Ahoy are substitutes.  Which of the following statements is correct about the markets for Oreos and Chips Ahoy when there is a large increase in the price of chocolate chips that go in the Chips Ahoy?

A new government health report shows that eating too much carbohydrates may increase cholesterol levels. Cronuts are considered a high carbohydrate food.