Economics Final Exam
The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, then the maximum that Dana is willing to pay for the 8th gallon of ice cream is
$3
The above figure shows the labor market. A minimum wage has an effect on the market for labor if it is set at
$4
The vertical distance between points A and B represents a tax in the market. The per-unit burden of the tax on buyers is
$4
In the above figure, the lowest price for which the firm will sell its second ton of wheat is
$75
The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $4 per hour, how many hours of students' labor are unemployed?
0 hours
The table below pertains to Pieway, an economy in which the typical consumer's basket consists of 10 bushels of peaches and 15 bushels of pecans. Year Price of Peaches Price of Pecans 2005 $11 per bushel $6 per bushel 2006 $9 per bushel $10 per bushel If 2005 is the base year, then the CPI for 2005 is
100
The above figure shows the U.S. market for flip-flops. When there is no international trade, the U.S. price is ________ per flip-flop and the U.S. quantity is ________ flip-flops.
14; 500,000
The demand and the supply for a good are each neither perfectly elastic nor perfectly inelastic. The market equilibrium price is $80 and the equilibrium quantity is 70 units. An excise tax of $30 is introduced, which lowers the quantity traded to 60 units. What is the deadweight loss created by this tax?
150
The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. In the figure above, with international trade ________ million shirts per year are produced in the United States.
16
A 20 percent increase in the quantity of pizza demanded results from a 10 percent decline in its price. The price elasticity of demand for pizza is
2.0
Calculate the surplus that exists on the market at a price of 6 dollars. What is the difference between this surplus and the equilibrium quantity? Only put down this difference as a final answer, not the surplus calculated in step one!
20
In the above figure, what is the amount of the tax per compact disc?
20
The table below pertains to Pieway, an economy in which the typical consumer's basket consists of 10 bushels of peaches and 15 bushels of pecans. Year Price of Peaches Price of Pecans 2005 $11 per bushel $6 per bushel 2006 $9 per bushel $10 per bushel The cost of the basket in 2005 was
200
James owns two houses. He rents one house to the Johnson family for $10,000 per year. He lives in the other house. If he were to rent the house in which he lives, he could earn $12,000 per year in rent. How much do the housing services provided by the two houses contribute to GDP?
22,000
In the economy of Ukzten in 2010, exports were $500, GDP was $6,400, government purchases were $1500, imports were $600, and investment was $2000. What was Ukzten's consumption in 2010?
3000
Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. Compute the real GDP in 2009.
400
In the above figure, what is the total tax revenue collected by the government?
400 million
The above figure shows the U.S. market for flip-flops. With international trade, the United States imports ________ flip-flops.
400,000
When the price of widges is 88, the quantity demanded of widgets is 15 and the quantity supplied of widges is 60. What is the surplus on this market?
45
When the price of widges is 13, the quantity demanded of widgets is 17 and the quantity supplied of widges is 66. What is the surplus on this market?
49
Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. Compute the nominal GDP in 2009.
500
Suppose the U.S. population is 275 million. If 210 million people are of working age, 135 million are employed, and 6 million are unemployed, what is the labor force participation rate?
67 percent
The above figure shows the U.S. market for flip-flops. With international trade, U.S. consumers buy ________ flip-flops and U.S. producers produce ________ flip-flops.
700,000; 300,000
From 2008 to 2009, the CPI for medical care increased from 150.8 to 164.4. What was the inflation rate for medical care? Record your number as percentages, rounded to 2 decimal places. (i.e. 4.456% should be recorded as 4.46 and not 0.04).
9.02
A firm raises the price it charges. The firm's total revenue does not change. What can we conclude about the price elasticity of demand?
Demand is unit elastic.
Which of the following transactions would be included in GDP for 2010?
In February 2010, Amanda buys a ticket to visit a zoo in Florida. She visits the zoo in April 2011.
The demand and the supply for a good are each neither perfectly elastic nor perfectly inelastic. Which one of the following is NOT a consequence of introducing excise taxes?
Producer surplus increases.
Which of the following items is counted as part of government purchases?
The city of Athens, Ohio pays $10,000 to a tree-trimming firm to trim trees along city boulevards.
The government sets a price floor for corn which is above the equilibrium price of corn. As a result, ________.
a deadweight loss will be created
The imposition of tariffs on Korean steel has led to ________ in imports of Korean steel to the United States and ________ the price of steel in the United States.
a decrease; raised
A price below the equilibrium price results in
a shortage
Suppose the government wants to encourage people to exercise more, so it imposes a binding price ceiling on the market for in-home treadmills. As a result,
a shortage of treadmills will develop.
Suppose the San Francisco 49ers lower ticket prices by 15 percent and as a result the quantity of tickets demanded increases by 10 percent. This set of results shows that San Francisco 49ers tickets have
an inelastic demand
A price floor is a price
below which a seller cannot legally sell. that creates a surplus of the good if it is set above the equilibrium price.
A country will export a good if it
can sell the good to a foreigner at a higher price than the no-trade domestic price.
The demand and the supply for a sofa are each neither perfectly elastic nor perfectly inelastic. A tax on the buyers of sofas
decreases the size of the sofa market.
The demand curve for a normal good shifts leftward if income ________ or the expected future price ________.
decreases; falls
For an economy as a whole, income must equal expenditure because
every dollar of spending by some buyer is a dollar of income for some seller.
When the price is below the equilibrium price, the quantity demanded
exceeds the equilibrium quantity but the quantity supplied is less than the equilibrium quantity.
A minimum wage set above the equilibrium wage rate is a price
floor that results in a surplus of labor.
Which of the following is a final good?
flour purchased by a family at the store to bake cookies at home
The figure above shows the demand for fruit snacks. Which movement reflects a decrease in population?
from point a to point c
Tariffs
generate revenue for the government.
If you buy a DVD player produced in Japan, a
good was exported by Japan and imported by the United States.
When the consumer price index rises, the typical family
has to spend more dollars to maintain the same standard of living.
The above figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling of $1,000 per month, the ceiling will
have no effect at all on the Bigtown rental market.
The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. In the figure above, with international trade the United States ________ million shirts per year.
imports 32
Gross domestic product measures
income and expenditures
A country opens up to trade and becomes an importer of a sugar. In the sugar market, consumer surplus will ________, producer surplus will ________, and total surplus will ________.
increase; decrease; increase
As a result of an increase in the supply of a good, the equilibrium quantity ________ and the equilibrium price ________.
increases; falls
If the demand for a good is perfectly elastic, the price elasticity of demand is ________ and the demand curve is ________.
infinite; horizontal
In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,
market prices.
If the price of a CD is equal to the equilibrium price, there will be ________ of CDs and the price will ________.
neither a shortage nor surplus; not change
The price elasticity of demand is defined as the magnitude of the
percentage change in quantity demanded divided by the percentage change in price.
Producer surplus is the
price received for a good minus its marginal cost
If good A is a normal good and income increases, the equilibrium price of A ________ and the equilibrium quantity of A ________.
rises; increases
The above figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling of $500 per month, the rent ceiling will help
some renters and hurt other renters.
Marginal cost is best defined as
the extra cost of producing one more unit of output.
The labor force consists of
the number of people in the working-age population who are employed or unemployed.
If net exports is a negative number for a particular year, then
the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year.
If a price ceiling is not binding, then
there will be no effect on the market price or quantity sold.
vSuppose the demand for peaches sold from one roadside stand in Georgia is perfectly elastic. As a result, a 7 percent increase in the price charged by the owner of this stand leads to
zero peaches sold by this stand.