Econ test 2

the market quantity of apples demanded per day is exactly seven if the price of an orange, P, satisfies

$.60<P<$.75

The market quantity of apples demanded per day is exactly seven if the price of an orange, P, satisfies

$.60<P<2.00

Evan purchases a wall calendar for $9, and his consumer surplus is $1. How much is Evan willing to pay for the wall calendar?

$10

if the price is $17, then consumer surplus in the market is

$15 and alexa, erica, and biyu purchase the good.

In the absence of trade, the equilibrium price of coffee in Uganda is ..., and total surplus in Uganda is represented by the area ...

$45; C+B+A+F+D

If the price index was 90 in Year 1, 100 in Year 2, and 95 in Year 3, then the economy experienced

11.1 percent inflation between Years 1 and 2, and 5 percent deflation between Years 2 and 3.

if there is only one unit of the good and if the buyers bid against each other for the right to purchase it, then the good will sell for

21 or slightly more

the CPI is more commonly used as a gauge of inflation than the GDP deflator is because the

CPI better reflects the goods and services bought by consumers.

Suppose India exports televisions to Italy and imports sugar from Argentina. This situation suggests

India has a comparative advantage relative to Italy in producing televisions, and Argentina has a comparative advantage relative to India in producing sugar.

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

Moldova is a price taker.

If Year 1 is the base year and Year 2 is the following year, then the inflation rate in Year 2 equals

[(CPI in Year 2 − CPI in Year 1)/CPI in Year 1] × 100.

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 possibly due to technological improvement in the production of bananas,

both Janine and Henry experience an increase in consumer surplus.

on a graph, the area below a demand curve and above the price measures

consumer surplus

a drought in spain destroys many red grade causing the prices of both red grapes and red wine to rise. as a result, the consumer surplus in the market for red grapes.

decreases, and the consumer surplus in the market for red wine decreases.

When the demand for a good increases and the supply of the good remains unchanged, consumer surplus ... Also, suppose televisions are a normal good and buyers of televisions experience a decrease in income, consumer surplus in the television market ....

decreases; decreases.

with trade, uganda will

export 11 units of coffee

As the price elasticities of supply and demand increase, the deadweight loss from a tax increases, and the lesser the tax revenue.

false

Total surplus in a market does not change when the gov imposes a tax on that market because the loss of consumer surplus and producer surplus is equal to the gain of gov revenue.

false

US GDP includes the market value of rental housing, but not the market value of owner occupied housing services

false

total surplus is always equal to sum of consumer surplus and produced surplus

false

for any given year, the CPI is the price of the basket of goods and services in the

given year divided by the price of the basket in the base year, then multiplied by 100.

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

if Wheatland were to allow trade, it would import corn.

Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began

importing televisions and the price of a television in Paraguay decreased to $300.

When trade in coffee is allowed, producer surplus in Uganda

increases by the area B + F + H.

With trade and without a tariff,

the domestic price is equal to the world price.

changes in inventory are included in the investment component of GDP.

true

if a good produced this quarter goes into inventory, then it is included in this period's GPD. If it is sold in the next quarter, it will have no effect on GDP.

true

tax revenue equals the size of the tax multiplied by the quantity sold in the market after the tax is levied

true

taxes cause deadweight because they prevent buyers and sellers from realizing some of the gains from trade. and because taxes distort incentives, they cause markets to allocate resources inefficiently.

true

the goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously

true

when a tax is imposed on sellers, consumers surplus and producer surplus both decrease. This is because taxes affect market participants by increasing the price paid by the buyer and decreasing the price received by the seller.

true

when a tax is imposed, the loss of consumer surplus and producer(...) as a result of the tax exceeds the tax revenue by the gov.

true

when an american doctor opens a practice in Bermuda, his production there is part of US GNP

true

the consumer price index is used to

turn dollar figures into meaningful measures of purchasing power