econ test 1
Refer to Figure 6-32 . Which of following statements is true based upon the conditions in the market?
a surplus will develop when a price floor is imposed at a price of $12.
Suppose a $3 per-unit tax is placed on this good. The amount of tax revenue collected by the government is`
$45
Bill created a new software program he is willing to sell for $200. He sells his first copy and enjoys a producer surplus of $150. What is the price paid for the software?
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If the demand curve is D and the supply curve shifts from S' to S, what is the change in producer surplus?
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Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for beach towels?
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Refer to Figure 5-12. Using the midpoint method, the price elasticity of demand between point Y and point Z is
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Refer to Figure 6-25. The burden of the tax on buyers is
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The graph below pertains to the supply of paper to colleges and universities.
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When the price is P1, area A represents
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The incidence of a tax is
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Consider Noah's decision to go to college. If he goes to college, he will spend $80,000 on tuition, $15,000 on room and board, and $4,000 on books. If he does not go to college, he will earn $22,000 working in a store and he will spend $13,000 on room and board. Noah's cost of going to college is
108,000
Denise values a stainless steel dishwasher for her new house at $500, but she succeeds in buying one for $350. Denise's consumer surplus is
150
Refer to Figure 4-2. Suppose Phil and Miss Kay are the only consumers in the market. If the price is $12, then the market quantity demanded is`
2 units
Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The amount of deadweight loss resulting from this tax is
25
Refer to Figure 4-18. At a price of $15, there would be a
400 units
Refer to Figure 7-24. At equilibrium, total surplus is
54
A certain state legislature is considering an increase in the state gasoline tax. Representative Campbell argues that an increase in the gasoline tax would harm low-income drivers disproportionately. Representative Richards responds by saying that low-income drivers own smaller cars that use less gasoline, and that low-income drivers therefore would not be harmed disproportionately.
Both representatives' arguments are based primarily on equality.
Harvey receives his first paycheck for working as an ice cream vendor. To which of the arrows does this transaction directly contribute?
C and D because he works through markets for factors of production to the firm and gets paid from firm through markets factors of production to household.
A barber currently cuts hair for 50 clients per week and earns a profit. He is considering expanding his operation in order to serve more clients. Should he expand?
It depends on the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients.
A university's football stadium is never more than half-full during football games. This indicates
The ticket price is above the equilibrium price.
College-age athletes who drop out of college to play professional sports
They are well aware that their opportunity cost of attending college is very high.
Refer to Figure 2-10, Panel (a) and Panel (b). A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by
an improvement in tractor production technology.
Refer to Figure 3-16. Hosne has an absolute advantage in the production of
both goods and Merve has an absolute advantage in the production of neither good.
Prices usually reflect
both the value of a good to society and the cost to society of making the good.
A legal maximum on the price at which a good can be sold is called a price
ceiling
A likely example of complementary goods for most people would be
chips and salsa
For a very long time the country of Zeeland has had an inflation rate of 9%. Suddenly its inflation rate drops to 3%. The drop in the inflation rate
could be due to slower money supply growth. We would expect unemployment to be higher
Equilibrium price must decrease when demand
decreases and supply does not change, when demand does not change and supply increases,and when demand decreases and supply increases simultaneously.
In this market for sunscreen, there is a decrease in the price of zinc oxide, an input into sunscreen, and more producers enter the market. The equilibrium price
decreases and the equilibrium quantity increases
A $2 tax per gallon of paint placed on the buyers of paint will shift the demand curve
downward by exactly 2
An increase in the price of cheese crackers from $2.25 to $2.45 per box causes suppliers of cheese crackers to increase their quantity supplied from 125 boxes per minute to 145 boxes per minute. Using the midpoint method, supply is
elastic, and the price elasticity of supply is 1.74.
A consumer's willingness to pay directly measures
how much a buyer values a good
A rational decision maker takes an action only if the
marginal benefit is greater than marginal cost
Assume Diana buys computers in a competitive market. It follows that
none of the above
Refer to Figure 3-15. Perry should specialize in the production of
poems
Which of the following movements would illustrate the effect in the market for wedding cakes resulting from a decrease in the number of pastry chefs?
point c t point d
Unemployment could cause this economy to produce at which point(s)?
t
Economics is the study of how society manages its
unlimited wants and limited resources
England can benefit from trade
with any nation
A manufacturer produces 1,000 units, regardless of the market price. For this firm, the price elasticity of supply is
zero
