1. Gordie has income of $100.00 which he can spend on fish sticks and hockey sticks. If the price of fish sticks is $2.00 each and the price of hockey sticks is $10.00 each, then the equation for his budget line is a. QH = 10 5QF . b. QH = 50 .2QF . c. QH = 10 .2QF . d. QH = 50 5QF .

2. Marginal revenue is the a. amount of additional revenue from a unit increase in output. b. amount of additional revenue from an increase in demand. c. amount of additional revenue from a unit increase in price. d. amount of additional revenue from a unit increase in profit.

3. Consider the market for corn. The supply of corn (in millions of bushels) is given by Qs = 2P. The demand for corn is given by Qd = 12 - P. Suppose the government introduces a price floor of 6 in order to provide assistance to farmers. The deadweight loss from this price ceiling is equal to a. 1 b. 2 c. 3 d. 4 e. It cannot be determined with the data given.

4. The short-run supply curve of the competitive firm is a. the firm's MC curve. b. the firm's AVC curve. c. the firm's MC curve above the minimum point on the AVC curve. d. the firm's MC curve above the minimum point on the AFC curve.

5. The National Bureau for Economic Research estimates that a 10 percent increase in the prices of either alcohol or tobacco would reduce the quantity demanded by 4.2 percent. This means that NBER estimates the price elasticity for these goods is about: a. 4.2. b. 0.42. c. 42. d. It cannot be determined with the data given.

6. Which of the following is likely to affect demand elasticity? a. Availability of substitutes. b. Time of adjustment to a price change. c. Degree to which an item is a necessity. d. Proportion of income spent on an item. e. All of the above.