microeconomics

1. Suppose that an increase in the price of carrots from $1.20 to $1.40 per pound raises the amount of carrots that carrot farmers produce from 1.2 million pounds to 1.6 million pounds. Using the midpoint method, what would be the elasticity of supply?

a. 0.50
b. 1.86
c. 0.54
d. 2.00

2. Suppose that the equilibrium quantity in the market for widgets has been 200 per month. Then a tax of $5 per widget is imposed. As a result, the government is able to raise $750 per month in revenue. By how much has the equilibrium quantity of widgets fallen?

a. 25 per month
b. 50 per month
c. 75 per month
d. 100 per month

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  1. Answer for 2 is 50

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