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.

  Question 36 is based on the diagram above, which represents the production possibilities frontier for an economy where only butter and guns are produced.    Point(s) ________represent efficiency in the economy and which point(s) ________ represent(s) underemployment and point______ represents  unattainable. (Fill in the blanks. The comma separates the answer choice that fills the first blank from the answer choice that fills the second blank.)

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.)

What will be the total expenditures of the government on the program?

Use the diagram above and the following scenario to answer questions 26 – 28. When the price equals $8 in the above market there is excess supply. Suppose the government has a buyout program where it purchases all the excess supply needed to prevent the price from falling below $8.

If the government is concerned about the excessively low price in the unregulated free market equilibrium above, it could impose a __________. If the government sets the value at $10, there is _________ and the amount is equal to __________. (Fill in the blanks.)

The graph above represents the demand and supply curves in the market for Uber Eats delivery services. Use it to answer questions 14 – 19.

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      

PLEASE SHOW YOUR ONE 8 X 11 SCRATCH PAPER AGAIN BEFORE YOU SUBMIT THE EXAM, USING YOUR WEBCAM. Note: Do not send the ECON 1101 team an email with your scratch paper.

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?