Unit 2 Review
If the price elasticity of supply for pickles is 2 and the price of pickles increases by 10 percent, then the quantity supplied of pickles will increase by
20%
Which of the following will shift the supply curve for apples to the right?
A decrease in the rental price for apple harvesting equipment
Assume that the market for beef is perfectly competitive and in equilibrium. Which of the following would most likely result in an increase in both the equilibrium price and the equilibrium quantity of beef?
An increase in the supply of potatoes, a complementary good
In the rental housing market, what would be the effect of a rent control that was set at the market equilibrium rental price?
It would have no impact on the number of housing units available.
All of the following cause a rightward shift in the demand schedule for a normal good EXCEPT
a decrease in the price of the good
The diagram above depicts the demand and supply curves for good Y. The perfectly competitive market is initially in equilibrium, but the government decides to institute a price floor program by setting the price of good Y at PF and agrees to purchase all unsold units of good Y from the producers. The cost of this program to the government is represented by which of the following areas?
Q1IKQ3
Assume that more corn is used to produce ethanol. Simultaneously, more effective control of pests and weeds occurs in farming. Which of the following will definitely occur in the corn market?
The price of corn will increase.
Which of the following occurs as a result of the substitution effect of an increase in the price of a normal good?
The quantity demanded of the good decreases.
The economic concept of total consumer surplus refers to which of the following?
The sum of the differences between the prices that consumers are willing to pay for a good or service and the price they actually pay
If the demand for product X is perfectly elastic and the supply of product X decreases, which of the following will occur in the market for X ?
Total revenue will decrease.
An increase in the supply of good X resulted in an increase in the price and quantity of good Y. It can be concluded that good Y is
a complement for good X
The graphs above show Mary's demand for hamburgers and Mark's demand for hamburgers. Suppose Mary and Mark are the only two consumers in the market. Which of the following is a point on the market demand curve for hamburgers?
cross-price elasticity of demand
If the government imposes a per-unit tax on personal computers, consumer surplus in the personal computer market will
decrease, because the price paid by consumers for personal computers will have increased
Assume that the supply of corn is relatively price inelastic, while the demand for corn is relatively price elastic. If the government imposes a per-unit excise tax on the production of corn, the incidence of the tax will fall
more on sellers than on buyers
