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ECO100: Past Year’s Final Exam Solutions
Question 1
Which of the following shocks described below will cause the market demand curve for steak in Ontario to shift to
the right? Select all that apply.
a. A decrease in income.
b. An increase in income.
c. A decrease in the price of steak.
d. An increase in the price of steak.
e. The price of chicken (a popular substitute for steak) increases.
f. The price of chicken (a popular substitute for steak) decreases.
g. Public health officials urge Canadians to reduce their consumption of red meat, including steak.
h. Health study finds that beef (including steak) has lower levels of cholesterol than pork, urges the public to
eat more beef.
i. Ontario’s population grows by 25%.
j. Ontario’s population falls by 20%.
Question 2
Suppose the demand and supply curves in the market for burritos have the following functional forms: QD = 88 – 3P
and QS = 34 + 3P. The equilibrium quantity sold in equilibrium is _______ burritos, at a price equal to $______ for
each burrito. Hint: it might help to draw a simple graph.
At a price of $____ there would be an excess _______ (supply/demand) of 18 burritos.
Answer: Q = 61 burritos, P = $9, P = $12, supply
Question 3
Suppose the market for liquor is perfectly competitive, where market demand and market supply curves have the
following functional form: P = 460 – 4QD and P = -120 + 6QS, where P is measured in cents. Round all your answers
in this question to the nearest integer. If applicable, do not include the comma in your answer.
If the government imposes a 60 cent tax per unit of liquor, the total tax revenues generated is _______ cents.
Consumers will pay ______ cents of the tax, which represents _____% of the tax. Producers will pay _____ cents of
the tax, which represents ______% of the tax.
Answer: revenue = 3120, consumers pay = 24 cents, producers pay = 36 cents, consumers pay 40%, producers pay
60%