econ 2 exam

Refer to Figure 8-6. When the tax is imposed in this market, buyers effectively pay what amount of the $10 tax? a. $6 b. $0 c. $10 d. $4

$6

Refer to Figure 6-18. The per-unit burden of the tax on sellers is a. $6. b. $14. c. $8. d. $10.

$6.

Refer to Figure 8-6. When the tax is imposed in this market, the price sellers effectively receive is a. $16. b. $4. c. $10. d. $6.

$6.

Refer to Figure 8-5. The loss in total welfare that results from the tax is represented by area a. A+B+D+F. b. A+B+C. c. D+H+F. d. C+H.

C+H.

Refer to Figure 8-5. The price that buyers effectively pay after the tax is imposed is . P4. b. P2. c. P1. d. P3.

P3.

Which of the following is not an example of a durable good? a. a refrigerator. b. a business suit. c. an automobile. d. a furnace.

a business suit.

A price ceiling is a. often imposed on markets in which "cutthroat competition" would prevail without a price ceiling. b. a legal maximum on the price at which a good can be sold. c. often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price ceiling. d. All of the above are correct.

a legal maximum on the price at which a good can be sold.

Refer to Figure 8-6. When the tax is imposed in this market, the price buyers effectively pay is a. $4. b. $6. c. $16. d. $10.

$16.

Refer to Table 24-10. How much was the cost of the basket in 2008? a. $78.25 b. $84.75 c. $456.50 d. $169.50

$169.50

Refer to Figure 6-18. The per-unit burden of the tax on buyers is a. $14. b. $6. c. $8. d. $24.

$8.

Refer to Figure 6-18. The effective price that sellers receive after the tax is imposed is a. $16. b. $6. c. $10. d. $24.

$10.

Refer to Figure 6-18. The price that buyers pay after the tax is imposed is a. $16. b. $8. c. $10. d. $24.

$24.

Refer to Table 24-10. If 2010 is the base year, then the consumer price index was a. 90.88 in 2008, 85.16 in 2009, and 100.00 in 2010. b. 77.40 in 2008, 85.16 in 2009, and 100.00 in 2010. c. 169.50 in 2008, 186.50 in 2009, and 219.00 in 2010. d. 50.50 in 2008, 67.50 in 2009, and 100.00 in 2010.

77.40 in 2008, 85.16 in 2009, and 100.00 in 2010.

Refer to Figure 8-5. The tax causes a reduction in producer surplus that is represented by area a. D+H. b. A. c. F. d. C+H.

D+H.

Refer to Figure 8-6. When the tax is imposed in this market, sellers effectively pay what amount of the $10 tax? a. $6 b. $4 c. $0 d. $10

$4

Refer to Figure 6-13. If the government imposes a price ceiling of $4 on this market, then there will be a. no shortage. b. a shortage of 5 units. c. a shortage of 20 units. d. a shortage of 10 units.

a shortage of 10 units.

Refer to Figure 6-13. Which of the following price floors would be binding in this market? a. $3 b. $6 c. $4 d. $5

$6

Refer to Figure 8-6. Without a tax, total surplus in this market is a. $7,200. b. $6,000. c. $3,000. d. $4,800.

$6,000.

Refer to Table 24-10. The inflation rate was a. 10.03 percent in 2009 and 17.43 percent in 2010. b. 10.03 percent in 2009 and 29.20 percent in 2010. c. 17.00 percent in 2009 and 29.20 percent in 2010. d. 17.00 percent in 2009 and 32.50 percent in 2010. Question

10.03 percent in 2009 and 17.43 percent in 2010.

Refer to Table 23-5. This country's inflation rate from 2016 to 2017 was a. 25.0%. b. 18.8%. c. 23.1%. d. 26.1%.

23.1%.

Refer to Figure 8-5. After the tax is levied, consumer surplus is represented by area a. D+H+F. b. A. c. F. d. A+B+C.

A

Refer to Figure 6-10. A price floor set at a. $16 will be binding and will result in a surplus of 4 units. b. $6 will be binding and will result in a surplus of 10 units. c. $16 will be binding and will result in a surplus of 10 units. d. $6 will be binding and will result in a surplus of 6 units.

$16 will be binding and will result in a surplus of 10 units.

Refer to Figure 7-21. Which area represents consumer surplus when the price is P1? a. A b. C c. D d. B

B

Refer to Figure 7-21. Which area represents producer surplus when the price is P1? a. C b. B c. D d. A

C

Refer to Figure 8-6. Total surplus with the tax in place is a. $6,000. b. $4,500. c. $3,600. d. $1,500.

$4,500.

Refer to Figure 8-5. The price that sellers effectively receive after the tax is imposed is a. P2. b. P1. c. P4. d. P3.

P1

Refer to Figure 6-10. A price ceiling set at a. $16 will be binding and will result in a shortage of 10 units. b. $16 will be binding and will result in a shortage of 4 units. c. $6 will be binding and will result in a shortage of 10 units. d. $6 will be binding and will result in a shortage of 6 units.

$6 will be binding and will result in a shortage of 10 units.

Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. What will be the new equilibrium quantity in this market? a. between 25 units and 50 units b. less than 25 units c. 25 units d. greater than 50 units

between 25 units and 50 units

Refer to Figure 7-21. When the price is P1, area B represents a. total surplus. b. consumer surplus. c. producer surplus. d. profits.

consumer surplus.

By far the largest category of goods and services in the CPI basket is a. food & beverages. b. transportation. c. education & communication. d. housing.

housing.

Refer to Figure 7-21. When the price is P1, area B+C represents a. total surplus. b. producer surplus. c. consumer surplus. d. None of the above is correct.

total surplus.

Refer to Table 24-10. If 2008 is the base year, then the consumer price index was a. 100.00 in 2008, 117.00 in 2009, and 132.50 in 2010. b. 100.00 in 2008, 110.03 in 2009, and 129.20 in 2010. c. 100.00 in 2008, 110.03 in 2009, and 117.43 in 2010. d. 169.50 in 2008, 186.50 in 2009, and 219.00 in 2010.

100.00 in 2008, 110.03 in 2009, and 129.20 in 2010.

Refer to Table 24-10. If 2009 is the base year, then the consumer price index was a. 90.88 in 2008, 100.00 in 2009, and 117.43 in 2010. b. 169.50 in 2008, 186.50 in 2009, and 219.00 in 2010. c. 89.97 in 2008, 100.00 in 2009, and 117.43 in 2010. d. 83.00 in 2008, 100.00 in 2009, and 132.50 in 2010.

90.88 in 2008, 100.00 in 2009, and 117.43 in 2010.

A price floor is a. a legal minimum on the price at which a good can be sold. b. often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price floor. c. a source of inefficiency in a market. d. All of the above are correct.

All of the above are correct.

Which of the following domestically produced items is not included in GDP? a. a bottle of shampoo b. a hairdryer c. a haircut d. All of the above are included in GDP.

All of the above are included in GDP.

Refer to Figure 8-5. After the tax is levied, producer surplus is represented by area a. A+B+C. b. A. c. F. d. D+H+F

F

Refer to Figure 7-21. When the price is P1, area A represents a. total benefit. b. producer surplus. c. consumer surplus. d. None of the above is correct.

None of the above is correct.

Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. Which of the following is correct? a. Buyers and sellers will share the burden of the tax equally. b. Buyers will bear more of the burden of the tax than sellers will. c. Sellers will bear more of the burden of the tax than buyers will. d. Any of the above is possible.

Sellers will bear more of the burden of the tax than buyers will.

Refer to Figure 6-17. A government-imposed price of $12 in this market is an example of a a. binding price floor that creates a surplus. b. binding price ceiling that creates a shortage. c. non-binding price floor that creates a surplus. d. non-binding price ceiling that creates a shortage.

binding price ceiling that creates a shortage.

Refer to Figure 6-17. A government-imposed price of $24 in this market is an example of a a. binding price ceiling that creates a shortage. b. non-binding price floor that creates a surplus. c. non-binding price ceiling that creates a shortage. d. binding price floor that creates a surplus.

binding price floor that creates a surplus.

Deadweight loss is the a. decline in government revenue when taxes are reduced in a market. b. decline in total surplus that results from a tax. c. decline in consumer surplus when a tax is placed on buyers. d. loss of profits to business firms when a tax is imposed. Question 34

decline in total surplus that results from a tax.

Welfare economics is the study of a. how the allocation of resources affects economic well-being. b. taxes and subsidies. c. government welfare programs for needy people. d. how technology is best put to use in the production of goods and services.

how the allocation of resources affects economic well-being.

Assume the demand for cigarettes is relatively inelastic, and the supply of cigarettes is relatively elastic. When cigarettes are taxed, we would expect a. most of the burden of the tax to fall on sellers of cigarettes, regardless of whether buyers or sellers of cigarettes are required to pay the tax to the government. b. most of the burden of the tax to fall on buyers of cigarettes, regardless of whether buyers or sellers of cigarettes are required to pay the tax to the government. c. the distribution of the tax burden between buyers and sellers of cigarettes to depend on whether buyers or sellers of cigarettes are required to pay the tax to the government. d. a large percentage of smokers to quit smoking in response to the tax.

most of the burden of the tax to fall on buyers of cigarettes, regardless of whether buyers or sellers of cigarettes are required to pay the tax to the government.

Refer to Figure 7-21. When the price is P1, area C represents a. total benefit. b. producer surplus. c. consumer surplus. d. None of the above is correct.

producer surplus.

Refer to Table 23-5. In 2016, this country's a. real GDP was $780, and the GDP deflator was 88.6. b. real GDP was $780, and the GDP deflator was 112.8. c. real GDP was $880, and the GDP deflator was 112.8. d. real GDP was $880, and the GDP deflator was 111.4.

real GDP was $780, and the GDP deflator was 112.8.

Refer to Table 23-5. In 2017, this country's a. real GDP was $1250, and the GDP deflator was 138.9. b. real GDP was $1250, and the GDP deflator was 128.0. c. real GDP was $900, and the GDP deflator was 128.0. d. real GDP was $900, and the GDP deflator was 138.9.

real GDP was $900, and the GDP deflator was 138.9.

Refer to Figure 8-5. The benefit to the government is measured by a. tax revenue and is represented by area A+B. b. the net gain in total surplus and is represented by area B+D. c. the net gain in total surplus and is represented by area C+H. d. tax revenue and is represented by area B+D.

tax revenue and is represented by area B+D.

The inflation rate you are likely to hear on the nightly news is calculated from a. the CPI. b. the Dow Jones Industrial Average. c. the unemployment rate. d. the GDP deflator.

the CPI.

Which of the following items is included in GDP? a. the sale of stocks and bonds b. the sale of used goods c. the sale of services such as those performed by a doctor d. All of the above are included in GDP.

the sale of services such as those performed by a doctor

The consumer price index is used to a. convert nominal GDP into real GDP. b. characterize the types of goods and services that consumers purchase. c. turn dollar figures into meaningful measures of purchasing power. d. measure the quantity of goods and services that the economy produces.

turn dollar figures into meaningful measures of purchasing power.