AP Micro Section 9 Test

When a competitive market is in equilibrium, total surplus can be increased bu

Changing the quantity traded

If the cross-price elasticity between two goods is negative this means that the two goods are

Complements

Allocating kidneys to those with the highest net benefit is an attempt to maximize

Consumer surplus

Generally each successive unit of a will cause marginal utility to

Decrease

What is the value of producer surplus when the market price is $60

$1,000

What is the value of consumer surplus when the market price is $40?

$4,000

Which leads to a more inelastic price elasticity of supply

A shorter time period in which to supply the good (3)

which of the following is the correct for price increases? when demand is ________, total revenue will _________

elastic, decrease

a perfectly elastic demand curve is

horizontal

which of the following is true if the price elasticity of demand for a good is zero

the demand curve is vertical

which of the following would cause the demand for a good to be relatively inelastic

the good is a necessity

total revenue is maximized when demand is

unit-elastic

Assume there are 2 good, X and Y. Good X costs $5 and good Y costs $10. If your income I'd $200, which combinations of X and Y is on your budget line

0 units of good x and 20 units of good y

If a decrease from $2 to $1 causes an increase in quantity demanded from 100 to 120, price elasticity equals

0.27

If Kylie buys 200 units of good X when her income is 20,000 and 300 units of good X when her income increases to 25,00, her income elasticity of demand, using the midpoint methods is

1.8

If a 2% change in the price of a good leads to a 10% change in the quantity demanded of a good, what is the price elasticity of demand

5

An exile tax imposed on sellers in a market will result in which

A downward shift of the demand curve (2 only)

Consumer surplus is found as the area

Below the demand curve but about the price

Which of the following is likely to have the highest price elasticity of demand

Foreign travel

A perfectly elastic supply curve is

Horizontal

The optimal consumption rule states that total utility is maximized when all income spent and

MU/P is equal for all goods

A consumer is spending all of her income and receiving 10 utility from the last unit of good A and 80 utility from the last unit of good B. If the price of good A is $2 and the price of good B is $1, to maximize total utilit the consumer should buy

More of good B

Which os the following is true regarding equity and efficiency in competitive markets

None of the above

The optimal consumption bundle is lays represented by a point

On the consumers budget line

The income elasticity of demand for a normal good is

Positive

Other things equal, a rise in price will result in which of the followng

Producer surplus will rise; consumer surplus will fall

If there is an increase in the price of an inferior good on which consumers spend a large share of their income, which of the following will decrease the quantity of that good demande?

Substitution effect only

An excise tax will be paid mainly by producers when

The price elasticity of supply is high and the price elasticity of demand is low

At the market equilibrium in a competitive market, which of the following is necessarily true

Total surplus is maximized (3 only)