Econ Section 9

According to the diagram, what is the dollar amount of the unit tax?

$1.00

The postmaster general of a country decides to double the price of first-class stamps, expecting the action to cause the revenues from sale of first-class stamps to double. What absolute value of price elasticity of demand is the postmaster general assuming in making the projection?

0

If the value of the price elasticity of supply is 3, which of the following is true?

A 10 percent decrease in price will decrease the quantity supplied by 30 percent

If the absolute value of the price elasticity of demand for Good X is 0.5, then a 10 percent decrease in the price of Good X will result in which of the following?

A 5% increase in the quantity demanded of Good X

The diagram above shows the demand curve for a good, If the price increases from P1 to P2, and the quantity consumed decreases from Q1 to Q2, consumer surplus decrease by the are

P1P2BC

What is the price paid by consumers and the net price received by producers after the tax is paid?

Paid by Consumers: $10.45, Received by Producers: $9.45

The cross-price elasticity of demand for Goods X and Y is -2.8. Based on this information, what is true about Good X and Good Y?

The goods are complements

The graph provided shows the imposition of a per-unit tax on producers. Which areas represent government tax revenue, producer surplus, and deadweight loss after the imposition of tax?

The government tax revenue is P5P2NJ; the producer surplus is P2P1N; the deadweight loss is JNL

Assume that the price elasticity f demand for good X is constant and equal to -0.5 and the price elasticity of demand for good Y is constantly and equal to -2. Assume that good And Y have identical upward-sloping elastic supply curves. If a per-unit excise tax of the same amount is levied on good X and good Y, which of the following would be true?

The tax share paid by consumers of good X would be relatively higher than that paid by consumers of good Y

Which of the following statements relating to income elasticity is true?

With an income elasticity coefficient of 5, a 10 percent increase in income will lead to a 50 percent increase in the quantity demanded of the good

In the figure above, at which of the given points is demand most elastic?

Z

based on the graph above, the consumer surplus at the market equilibrium price and quantity is shown by which area?

ZMN

Which of the following best describes how a consumer maximizes total utility from the consumption of a bundle of goods and services?

by choosing the combination of goods such that the marginal utility per dollar spent on the last unit of each good is equal

Assume that a 2 percent increase in the price of bologna causes a 5 percent decrease in the demand for cheese. What is the cross-price elasticity of demand between the two goods, and how are these goods related?

cross-price elasticity of demand equals -2.5, and these goods are substitutes

Assume that the price elasticity of supply for good Y is 0.5. If the price of good Y decreases by 30 percent, the quantity supplied Good Y will

decrease by 15 percent

In a given time period, a person consumes more and more of a good or service and, as a result, enjoys each additional unit less and is willing to pay less for each additional unit. This behavior is consistent with the law of

diminishing marginal utility

A 10 percent increase in Sandra's consumption of milk to decrease from 10 cartons to 6 cartons. Sandra's elasticity of demand for milk is

less than zero and therefore milk is an inferior good

The additional satisfaction received from consuming an additional unit of a good is called the

marginal utility

Assume that the supply of corn is relatively price inelastic, while the demand for corn is relatively price elastic, If the government imposes a per-unit excise tax on the production of corn, the incidence of the tax will fall

more on sellers than on buyers

If a 10 percent increase in the price of a good leads to a 25 percent decrease in the quantity demanded of the good, demand is

relatively elastic

Assume that the price of orange juice increases by 40 percent following a crop failure. If the quantity demanded fails by 10 percent, which of the following is true?

the absolute value of the price elasticity of demand for orange juice is 0.25

The cross-price elasticity of demand between Good X and Good Z measures the percentage change in the quantity demanded of Good X in response to a percentage change in

the price of Good Z

Which of the following is true if consuming one unit of a good yields 100 utils and consuming the second unit of the good increases satisfaction by 20 utils?

the total utility of consuming two units is 120

Assume that the market demand for a good is perfectly inelastic, the market supply for the good is perfectly elastic, and the market is in equilibrium. If there is a decrease in the price of key input used in the production of the good, which of the following will occur?

there will be no change in the producer surplus

Consumer surplus exists because of the

willingness of some consumers to pay a price higher than the market price for some units of a good