Microeconomics Test Relearning
Unit II Part 1 Test
QUESTION
TOPIC
1, 3-5
Elasticity
1. Review Krugman Elasticity relearning
2. Read “Where Have all the Farmers Gone? on p. 477 of the above pdf. Draw two correctly labeled
graphs to illustrate Krugman’s two reasons.
3. Review Mankiw ch. 4 89-91.
4. Mankiw lists four determinants of price elasticity of demand. List two examples for each. Then,
choose any three examples you listed and describe an example in at least 2 sentences
5. Complete the calculations for the examples in the “Elasticity relearning” pdf.
2
Elasticity of Supply
1. Read 477-479 in Krugman Elasticity relearning.
2. Describe two examples from each of the two determinants.
6-8, 11, 16-21 MERIT/TRICE
1. read pages 71-76 in Krugman “Supply and demand relearning.”
2. do Check for Understanding on p. 75
3. Draw a correctly labeled graph of a market for equilibrium for each of THREE determinants of supply
and TWO determinants of demand. Write two sentences for each explaining why the curve shifts.
9, 10, 13, 14
Producer/Consumer surplus
1. Draw a correctly label graph of a market in equilibrium. Label the CS and PS at equilibrium price. Then,
add a new price, price 2, on the graph. Indicate how CS and PS have changed.
2. Draw a correctly label graph of a market in equilibrium with numbers on both the price and quantity
axes. Calculate the CS and PS.
12, 22-23
Price Controls
1. Draw a correctly label graph of a market in equilibrium. Add a price ceiling. Show on the graph the
new QS and QD because of the ceiling.
2. Draw a correctly label graph of a market in equilibrium. Add a price floor. Show on the graph the new
QS and QD because of the floor.
3. Explain a real-world example of either a price floor or ceiling
15-17, 19, 20 change in Q d/s vs. change in s/d
1. Draw a correctly label graph of a market in equilibrium. Show a change in price on the graph. Explain
how this new price causes a change in QUANTITY supplied and demanded and NOT a change in supply
or a change in demand
24, 25
taxes
1. Draw a correctly labeled graph of a market in equilibrium. Add a tax and show the price buyers pay,
the price sellers receive, the amount of the tax, and the deadweight loss.
2. Explain how elasticity impacts the deadweight loss and the tax revenue. Refer to specific examples of
both elastic and inelastic demand or supply in your explanation.