Econ 2000: Final Exam

a. seller's willingness to sell.

1.) Cost is a measure of the... a. seller's willingness to sell. b. seller's willingness to buy. c. producer shortage. d. seller's producer surplus.

c.its fixed costs but not its variable costs.

11.) A firm that shuts down temporarily has to pay Select one: a.neither its variable costs nor its fixed costs. b.both its variable costs and its fixed costs. c.its fixed costs but not its variable costs. d.its variable costs but not its fixed costs.

a. may increase, decrease, or remain the same.

14.) If the size of a tax increases, tax revenue... a. may increase, decrease, or remain the same. b.remains the same. c.decreases. d.increases.

d.$50

14.) Suppose a firm operating in a competitive market has the following cost curves: Refer to Figure 14-2. If the market price is $10, what is the firm's total revenue? a.$15 b.$30 c.$35 d.$50

a.it would be more efficient if the electric company raised its rates for electricity at peak times.

15.) On hot summer days, electricity-generating capacity is sometimes stretched to the limit. At these times, electric companies may ask people to voluntarily cut back on their use of electricity. An economist would suggest that Select one: a.it would be more efficient if the electric company raised its rates for electricity at peak times. b.it would be more efficient to have a lottery to decide who had to cut back their use of electricity at peak times. c.it would be more efficient to force everyone to cut their usage of electricity by the same amount. d.every electric customer has an incentive to prevent the system from overloading, so this voluntary approach is the most efficient.

c.$2 per unit

18.) In a competitive market the price is $8. A typical firm in the market has ATC = $6, AVC = $5, and MC = $8. How much economic profit is the firm earning in the short run? Select one: a.$3 per unit b.$0 per unit c.$2 per unit d.$1 per unit

a. It operates in a competitive market.

21.) A firm cannot price discriminate if... a.it operates in a competitive market. b.it has a constant marginal cost. c.it has declining marginal revenue. d.buyers only reveal the price they are willing to pay for the product.

c. Buyers would not be willing to buy as much as before at each relevant price.

22. Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event? a. The equilibrium price would rise. b. The supply would decrease. c. Buyers would not be willing to buy as much as before at each relevant price. d. Sellers would not be able to produce and sell as much as before at each relevant price.

c.the government gives a firm the exclusive right to sell some good or service.

22.) A government-created monopoly arises when a.the government collects taxes in a particular industry. b.government spending in a certain industry gives rise to monopoly power. c.the government gives a firm the exclusive right to sell some good or service. d.the government exercises its market control by encouraging competition among sellers.

b. the price you pay for the ticket and the value of your time.

24. When computing the opportunity cost of attending a professional football game as a spectator, you should include a. the value of your time, but not the price you pay for the ticket. b. the price you pay for the ticket and the value of your time. c. the price you pay for the ticket, but not the value of your time. d. neither the price of the ticket nor the value of your time.

d.$40,000.

26.) A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $40, its average revenue is $80, and its average total cost is $44. At Q = 500, the firm's total revenue is... a.$2,000. b.$20,000. c.$22,000. d.$40,000.

b. both demand and supply decrease.

32. Equilibrium quantity must decrease when a. demand decreases and supply increases. b. both demand and supply decrease. c. demand increases and supply does not change. d. demand increases and supply decreases.

b. supply of bicycles will shift to the left.

1. Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the a. demand for bicycle assembly workers will increase. b. supply of bicycles will shift to the left. c. firm must increase output to maintain profit levels. d. supply of bicycles will shift to the right.

a. Implicit costs do not require a direct monetary outlay by the firm, whereas explicit costs do.

1.) A difference between explicit and implicit costs is that... a. Implicit costs do not require a direct monetary outlay by the firm, whereas explicit costs do. b.explicit costs must be greater than implicit costs. c.implicit costs must be greater than explicit costs. d. explicit costs do not require a direct monetary outlay by the firm, whereas implicit costs do.

c. they would do better charging $15 than $10.

10. Aiden and Zaria charge people to park on their lawn while attending a nearby craft fair. At the current price of $10, six people park on their lawn. If they raise the price to $15, they know that only five people will want to park on their lawn. Whether they have six or five cars parked on their lawn does not affect their costs. From this information it follows that a. it does not matter if they charge $10 or $15. b. they should leave the price at $10. c. they would do better charging $15 than $10. d. they should raise the price even more.

d.$100

10.) The following table shows the production costs for The Flying Elvis Copter Rides. Refer to Table 13-7. What is the value of C? a.$25 b.$200 c.$50 d.$100

b. New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy.

11. Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation? a. The demand curve for beef must be positively sloped. b. New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy. c. Consumers have experienced an increase in income, and beef-production technology has improved. d. The price of chicken has risen, and the price of steak sauce has fallen.

d. At the current output level, the marginal social benefit exceeds the marginal private benefit.

11.) Flu shots provide a positive externality. Suppose that the market for vaccinations is perfectly competitive. Without government intervention in the vaccination market, which of the following statements is correct? Select one: a. At the current output level, the marginal social cost exceeds the marginal private cost. b. The current output level is inefficiently high. c. A per-shot tax could turn an inefficient situation into an efficient one. d. At the current output level, the marginal social benefit exceeds the marginal private benefit.

a. a situation in which the market on its own fails to allocate resources efficiently.

12. The term market failure refers to a. a situation in which the market on its own fails to allocate resources efficiently. b. a firm that is forced out of business because of losses. c. an unsuccessful advertising campaign which reduces demand for a product. d. a situation in which competition among firms becomes ruthless.

a.$1,600.

12.) Assume a firm in a competitive industry is producing 800 units of output, and it sells each unit for $6. Its average total cost is $4. Its profit is Select one: a.$1,600. b.−$1,600. c.$8,000. d.$3,200.

c. both Janine and Henry experience an increase in consumer surplus.

12.) Henry is willing to pay 45 cents, and Janine is willing to pay 55 cents, for 1 pound of bananas. When the price of bananas falls from 50 cents a pound to 40 cents a pound, Select one: a. Janine experiences an increase in consumer surplus, but Henry does not. b. neither Janine nor Henry experiences an increase in consumer surplus. c. both Janine and Henry experience an increase in consumer surplus. d. Henry experiences an increase in consumer surplus, but Janine does not.

b. Fossil fuels are scarce resources.

13. Fossil fuels are considered to be nonrenewable energy sources. Which of the following statements is correct? a. Fossil fuels are not resources. b. Fossil fuels are scarce resources. c. Fossil fuels are nonscarce resources. d. Fossil fuels are unlimited resources.

b. consumer does not purchase the good.

13.) If a consumer places a value of $13 on a particular good and if the price of the good is $16, then the... a. consumer enjoys consumer surplus if he or she buys the good. b. consumer does not purchase the good. c. market is not a competitive market. d. price of the good will fall due to market forces.

a. Da to Db.

14. Refer to Figure 4-8. All else equal, an increase in the income of buyers who consider turkey to be an inferior good would cause a move from a. Da to Db. b. y to x. c. Db to Da. d. x to y.

d. People respond to incentives.

15. Suppose the state of Rhode Island passes a law that increases the tax on beer. As a result, beer consumers who live in Rhode Island start purchasing their beer in surrounding states. Which of the following principles does this best illustrate? a. Markets are usually a good way to organize economic activity. b. Rational people think at the margin. c. Trade can make everyone better off. d. People respond to incentives.

d. Any price less than $20.00

16.) Anh is a single mother of two young children who spend their days at a daycare center while Becca goes to work. The daycare center closes at 5:30. If parents do not pick up their children at or before 5:30, the daycare center charges a late fee of $5 for every 10 minutes the parent is late. Due to traffic, Anh expects to be 40 minutes late to pick up his children. Which of the following most accurately describes the set of prices that he would be willing to pay for a variable toll road that would get him to the daycare center on time? Select one: a. Anh would not be willing to pay out of pocket to avoid traffic. b. Any price less than $25.00 c. Any price less than $30.00 d. Any price less than $20.00

a.30,000

16.) In the following figure, graph (a) depicts the linear marginal cost (MC) of a firm in a competitive market, and graph (b) depicts the linear market supply curve for a market with a fixed number of identical firms. Refer to Figure 14-4. If there are 300 identical firms in this market, what level of output will be supplied to the market when price is $1.00? Select one: a.30,000 b.60,000 c.300 d.6,000

a. more than $40; because the marginal benefit will exceed the marginal cost.

17. Suppose the cost of operating a 75-room hotel for a night is $6,000 and there are five empty rooms for tonight. If the marginal cost of operating one room for one night is $40, the hotel manager should rent one of the empty rooms only if a customer is willing to pay a. more than $40; because the marginal benefit will exceed the marginal cost. b. more than $80; because the marginal benefit will exceed the marginal cost. c. more than $80; because the average benefit will exceed the marginal cost. d. more than $40; because the average benefit will exceed the marginal cost.

d.a one-unit decrease in output will increase the firm's profit.

17.) If a competitive firm is currently producing a level of output at which marginal cost exceeds marginal revenue, then... a.total revenue exceeds total cost. b.a one-unit increase in output will increase the firm's profit. c.total cost exceeds total revenue. d.a one-unit decrease in output will increase the firm's profit.

c. Spanish consumers of chips lose and Spanish producers of chips gain.

17.) Spain is an importer of computer chips, taking the world price of $10 per chip as given. Suppose Spain imposes a $5 tariff on chips. Which of the following outcomes is possible? a.Spanish consumers and producers of chips gain. b.Total surplus in the Spanish chip market increases. c. Spanish consumers of chips lose and Spanish producers of chips gain. d.Fewer Spanish-produced chips are sold in Spain.

b. the marginal benefit of an extra diamond far exceeds the marginal benefit of an extra bottle of water.

18. People are willing to pay more for a diamond than for a bottle of water because a. the marginal cost of producing an extra diamond far exceeds the marginal cost of producing an extra bottle of water. b. the marginal benefit of an extra diamond far exceeds the marginal benefit of an extra bottle of water. c. producers of diamonds have a much greater ability to manipulate diamond prices than producers of water have to manipulate water prices. d. water prices are held artificially low by governments, since water is necessary for life.

b. Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.

18.) Under which of the following scenarios would a park be considered a common resource? a. Visitors can enter the park free of charge and there are always plenty of empty picnic tables. b. Visitors can enter the park free of charge, but frequently all of the picnic tables are in use. c. Visitors to the park must pay an admittance fee and frequently all of the picnic tables are in use. d. Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables.

d. society is getting the most it can from its scarce resources.

19. Efficiency means that a. society's goods and services are distributed fairly, though not necessarily equally, among society's members. b. society's goods and services are distributed equally among society's members. c. society is conserving resources in order to save them for the future. d. society is getting the most it can from its scarce resources.

a. consumer surplus decreases and total surplus decreases in the market for that good.

19.) When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy... a. consumer surplus decreases and total surplus decreases in the market for that good. b. consumer surplus decreases and total surplus increases in the market for that good. c. consumer surplus increases and total surplus increases in the market for that good. d. consumer surplus increases and total surplus decreases in the market for that good.

a. new firms will enter the market.

19.) When profit-maximizing firms in competitive markets are earning profits... a.new firms will enter the market. b.the most inefficient firms will be encouraged to leave the market. c.market demand must exceed market supply at the market equilibrium price. d.market supply must exceed market demand at the market equilibrium price.

c. decrease.

2. Suppose you like to make, from scratch, pies filled with bananas and vanilla pudding. You notice that the price of bananas has increased. As a result, your demand for vanilla pudding would a. be unaffected. b. change but you don't know how without more information. c. decrease. d. increase.

a.average fixed cost is 50 cents.

2.) A firm produces 400 units of output at a total cost of $1,200. If total variable costs are $1,000... a.average fixed cost is 50 cents. b.average total cost is 50 cents. c.average variable cost is $2. d.average total cost is $2.50.

a. the sum of producer surplus and consumer surplus is maximized.

2.) Efficiency in a market is achieved when... a. the sum of producer surplus and consumer surplus is maximized. b. a social planner intervenes and sets the quantity of output after evaluating buyers' willingness to pay and sellers' costs. c. all firms are producing the good at the same low cost per unit. d. no buyer is willing to pay more than the equilibrium price for any unit of the good.

d.Profit = (quantity of output) × (price − average total cost)

20.) Which of the following expressions is correct for a competitive firm? a.Marginal revenue = (change in total revenue)/(quantity of output) b.Average total cost = total variable cost/quantity of output c.Average revenue = (marginal revenue) × (quantity of output) d.Profit = (quantity of output) × (price − average total cost)

a. When ketchup prices rose, ketchup sellers increased their quantity supplied of ketchup.

21. Which of the following demonstrates the law of supply? a. When ketchup prices rose, ketchup sellers increased their quantity supplied of ketchup. b. When leather became more expensive, belt producers decreased their supply of belts. c. When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters. d. When car production technology improved, car producers increased their supply of cars.

a. the value to Savion of the option he would have chosen had Option 2 not been available.

23. Savion's aunt gave him $25 for his birthday with the condition that Savion buys himself something. In deciding how to spend the money, Savion narrows his options down to four choices: Option 1, Option 2, Option 3, and Option 4. Each option costs $25. Finally, he decides on Option 2. The opportunity cost of this decision is a. the value to Savion of the option he would have chosen had Option 2 not been available. b. the value to Savion of Options 1, 3, and 4 combined. c. $25. d. the average of the values to Savion of Options 1, 3, and 4.

a.$14

24.) The following graph depicts the market situation for a monopoly pastry shop called Bearclaws. Refer to Figure 15-5. Based upon the information shown, what price will Bearclaws charge to maximize profits? a.$14 b.$10.50 c.$7 d.$12

a. The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges.

25. Which of the following events would cause the price of oranges to fall? a. The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges. b. There is a shortage of oranges. c. The FDA announces that bananas cause strokes, and oranges and bananas are substitutes. d. At the current price, quantity demanded is greater than quantity supplied.

a. refers to how much a society can produce with its resources. Equality refers to how evenly the benefits from using resources are distributed among members of society.

26. Efficiency a. refers to how much a society can produce with its resources. Equality refers to how evenly the benefits from using resources are distributed among members of society. b. refers to how evenly the benefits from using resources are distributed between members of society. Equality refers to how much a society can produce with its resources. c. and equality both refer to how fairly the benefits from using resources are distributed between members of a society. d. and equality both refer to how much a society can produce with its resources.

a. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

27. Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market? a. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. b. Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.

c.produces an output level less than the socially optimal level.

27.) The deadweight loss associated with a monopoly occurs because the monopolist... a.maximizes profits. b.produces an output level greater than the socially optimal level. c.produces an output level less than the socially optimal level. d.equates marginal revenue with marginal cost.

d. Quantity will fall, and the effect on price is ambiguous.

28. What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages? a. Price will fall, and the effect on quantity is ambiguous. b. Price will rise, and the effect on quantity is ambiguous. c. Quantity will rise, and the effect on price is ambiguous. d. Quantity will fall, and the effect on price is ambiguous.

b.constrained by demand.

28.) When a firm operates under conditions of monopoly, its price is... a.constrained by marginal cost. b.constrained by demand. c.constrained only by its social agenda. d.not constrained.

d. for soup falls when income rises.

29. Soup is an inferior good if the demand a. for soup falls when the price of a substitute for soup rises. b. for soup rises when the price of soup falls. c. curve for soup slopes upward. d. for soup falls when income rises.

c. Price discrimination

29.) Which of the following can eliminate the inefficiency inherent in monopoly pricing? a. Arbitrage b. Cost-plus pricing c. Price discrimination d. Regulations that force monopolies to reduce their levels of output

d. exactly equals the quantity that sellers are willing and able to sell.

3. At the equilibrium price, the quantity of the good that buyers are willing and able to buy a. could be greater or less than the quantity that sellers are willing and able to sell. b. is greater than the quantity that sellers are willing and able to sell. c. is less than the quantity that sellers are willing and able to sell. d. exactly equals the quantity that sellers are willing and able to sell.

a. $100, and her economic profits are $40.

3.)Chloe gives piano lessons for $15 per hour. She also grows flowers, which she arranges and sells at the local farmer's market. One day she spends 4 hours planting $50 worth of seeds in her garden. Once the seeds have grown into flowers, she can sell them for $150 at the farmer's market. Chloe's accounting profits are... a.$100, and her economic profits are $40. b.$40, and her economic profits are $100. c.$15, and her economic profits are $140. d.$100, and her economic profits are $15.

b. decreases by 12 units.

30. Refer to Table 4-4. If these are the only four sellers in the market, then when the price decreases from $8 to $6, the market quantity supplied a. increases by 33 units. b. decreases by 12 units. c. decreases by 20 units. d. decreases by 42 units.

a. A local water company

30.) Which of the following would be most likely to have monopoly power? a.A local water company b.A convenient store c.A large hotel chain d.A large department store

d. Both the equilibrium price and quantity would increase.

31. What would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes fall and macaroni and cheese is an inferior good? a. The equilibrium price would decrease, and the equilibrium quantity would increase. b. Both the equilibrium price and quantity would decrease. c. The equilibrium price would increase, and the equilibrium quantity would decrease. d. Both the equilibrium price and quantity would increase.

c. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

33. Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market? a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. c. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. d. Equilibrium quantity and price would increase.

b. of diminishing marginal product.

4.) refer to image... a.marginal product first increases, then decreases. b.of diminishing marginal product. c.marginal product first decreases, then increases. d.of increasing marginal product.

d.The cost of the steel that is used in producing automobiles

5.) For a large firm that produces and sells automobiles, which of the following costs would be a variable cost? Select one: a.The cost of internet advertising incurred each year b.The $20 million payment that the firm pays each year for accounting services c.The rent that the firm pays for office space in a suburb of St. Louis d.The cost of the steel that is used in producing automobiles

b. He should sell the car now for $3,800.

6. Savion is restoring a car and has already spent $4,000 on the restoration. He expects to be able to sell the car for $5800. Savion discovers that he needs to do an additional $2,400 of work to make the car worth $5,800 to potential buyers. He could also sell the car now, without completing the additional work, for $3,800. What should he do? a. It does not matter which action he takes since the outcome will be the same either way. b. He should sell the car now for $3,800. c. He should keep the car since it wouldn't be rational to spend $6,400 restoring a car and then sell it for only $5,800. d. He should complete the additional work and sell the car for $5,800.

a.marginal product must be falling.

6.) If marginal cost is rising... a.marginal product must be falling. b.marginal product must be rising. c.average variable cost must be falling. d.average fixed cost must be rising.

b.$170.

7.) Diamond is an organic brocolli farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Diamond helps people organize their houses. Due to the popularity of her home-organization services, Farmer Diamond has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Diamond charges $45 an hour for her home-organization services. One spring day, Diamond spends 8 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of brocolli. Diamond's accounting profit from farming equals a.$260. b.$170. c.$130. d.−$80.

d.$533.33

8.) Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts. The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month. Refer to Table 13-10. What is the average variable cost for the month if 6 instructional modules are produced? a.$713.33 b.$180.00 c.$700.00 d.$533.33

b. $45,900.

9. Consider Miray's decision to go to college. If she goes to college, she will spend $24,000 on tuition, $12,000 on room and board, and $1,900 on books. If she does not go to college, she will earn $16,000 working in a store and spend $8,000 on room and board. Miray's cost of going to college is a. $61,900. b. $45,900. c. $53,900. d. $37,900.

d.increases and gets steeper.

9.) The following table shows the production possibilities for Charles' math tutoring company. Refer to Table 13-4. Suppose that Charles's math tutoring company has a fixed cost of $50 per month for his cell phone. Each worker costs Charles $60 per day. As output increases from 45 to 70 students, Charles's total cost curve Select one: a.increases but gets flatter. b.decreases but gets steeper. c.decreases and gets flatter. d.increases and gets steeper.

a. an increase in quantity demanded.

Figure 4-1 4. The movement from point A to point B on the graph shows a. an increase in quantity demanded. b. a decrease in demand. c. an increase in demand. d. a decrease in quantity demanded.

c. $8.40 and 48 units, respectively.

Refer to Figure 10-1. 3.) This graph represents the tobacco industry. The socially optimal price and quantity are... a. $9.00 and 60 units, respectively. b. $4.50 and 100 units, respectively. c. $8.40 and 48 units, respectively. d. $6.21 and 76 units, respectively.

a. decreased to Q2.

Refer to Figure 10-2. 4.) If this market is currently producing at Q4, then total economic well-being would be maximized if output... a. decreased to Q2. b. decreased to Q1. c. stayed at Q4. d. decreased to Q3.

d. P4a − P4b.

Refer to Figure 10-4, Graph (b) and Graph (c). The installation of a scrubber 5.) in a smokestack reduces the emission of harmful chemicals from the smokestack. Therefore, the external benefit of smokestack scrubber installation is represented by... a. Q5 − Q4. b. P3a − P3b. c. Q3 − Q2. d. P4a − P4b.

c. Box D, which represents public goods.

Refer to Figure 11-1. 6.) Emma's use of good x does not affect anyone else's use of good x. Neither Emma nor anyone else can be prevented from using the good. Good x is an example of the type of good that belongs in... a. Box A, which represents private goods. b. Box B, which represents common resources. c. Box D, which represents public goods. d. Box C, which represents common resources.

a.negative economic profits in the short run and shut down.

Refer to Figure 14-1. 13.) If the market price falls below $6, the firm will earn a.negative economic profits in the short run and shut down. b.zero economic profits in the short run. c.positive economic profits in the short run. d.negative economic profits in the short run but remain in business.

b.Q1 or Q2 only.

Refer to Figure 15-2. 23.) Profit can always be increased by increasing the level of output by one unit if the monopolist is currently operating at Select one: a.Q5 only. b.Q1 or Q2 only. c.Q3, Q4, or Q5 only. d.Q4 only.

b.Q = 45 and P = 45

Refer to Figure 15-7. 25.) To maximize total surplus, a benevolent social planner would choose which of the following outcomes? a.Q = 30 and P = 30 b.Q = 45 and P = 45 c.Q = 60 and P = 30 d.Q = 30 and P = 60

d. demand for the good conforms to the law of demand.

Refer to Figure 4-1. 5. It is apparent from the figure that the a. good is inferior. b. demand for the good decreases as income increases. c. good is a normal good. d. demand for the good conforms to the law of demand.

d. Point C to Point B

Refer to Figure 4-10. 20.) Which of the following movements would illustrate the effect of an increase in the incomes of parents with school-aged children on the market for soccer lessons? a. Point C to Point D b. Point A to Point B c. Point A to Point D d. Point C to Point B

b. an increase in the price of butter.

Refer to Figure 4-6. 16.) The shift from S' to S in the market for chocolate cake could be caused by a. an increase in income. b. an increase in the price of butter. c. an increase in the price of chocolate cake. d. a decrease in the price of flour.

b. $35

Refer to Figure 4-7 7. At what price would there be an excess supply of 400 units of the good? a. $25 b. $35 c. $40 d. $30

d. y to x.

Refer to Figure 4-9. 8.) All else equal, an increase in the use of laptop computers for note-taking would cause a move from a. x to y. b. Sa to Sb. c. Sb to Sa. d. y to x.

b. $10.

Refer to Figure 8-2. 7.) The amount of deadweight loss as a result of the tax is Select one: a. $10. b. $10. c. $16. d. $24.

d. decrease government revenue and decrease the deadweight loss from the tax.

Refer to Figure 8-7. 8.) If the government changed the per-unit tax from $5.00 to $2.50, then the price paid by buyers would be $7.50, the price received by sellers would be $5, and the quantity sold in the market would be 1.5 units. Compared to the original tax rate, this lower tax rate would... a. increase government revenue and increase the deadweight loss from the tax. b. decrease government revenue and increase the deadweight loss from the tax. c. increase government revenue and decrease the deadweight loss from the tax. d. decrease government revenue and decrease the deadweight loss from the tax.

d. The well-being of domestic crude-oil producers is now higher in that they now sell more crude oil at a higher price per barrel.

Refer to Figure 9-4. 9.) A result of this country allowing international trade in crude oil is as follows: a. The effect on the well-being of the country is unclear in that domestic producer surplus increases, while the effect on domestic consumer surplus is unclear. b. domestic consumers lose by more than domestic producers gain. c. The effect on the well-being of domestic crude-oil consumers is unclear in that they now buy more crude oil, but at a higher price per barrel. d. The well-being of domestic crude-oil producers is now higher in that they now sell more crude oil at a higher price per barrel.

d. D + F.

Refer to Figure 9-6. 10.) The deadweight loss created by the tariff is represented by the area Select one: a. B. b. D + E + F. c. B + D + E + F. d. D + F.

b.P4.

Suppose a firm operating in a competitive market has the following cost curves: Refer to Figure 14-3. Firms would be encouraged to enter this market for all prices that exceed a.P3. b.P4. c.P1. d.P2.

d. equilibrium quantity of the good always decreases.

When a tax is imposed on a good, the... a. supply curve for the good always shifts. b. amount of the good that buyers are willing to buy at each price always remains unchanged. c. demand curve for the good always shifts. d. equilibrium quantity of the good always decreases.