AP Microeconomics Unit 2

The table above shows the total benefit Tony gets from eating different quantities of apples. If the apples cost $3 each, how many should he buy to maximize his consumer surplus?

4

Assume product X has a market price of $20 and a total revenue amount of $50,000. If price changes to $30 and total revenue, as a result of the price change, increases to $80,000, what can be determined about the demand for that product?

demand is inelastic

The diagram above shows Sally's utility function for chocolate. Her utility function illustrates the principle of

diminishing marginal utility

The quantity of peanuts supplied increased from 40 tons per week to 60 tons per week when the price of peanuts increased from $4 to $5 per ton. The price elasticity of supply for peanuts over this price range is

elastic

According to the diagram, what is the dollar amount of the tax per unit?

$1.00

Which of the following would cause the supply curve for notebook computers to shift to the right?

An increase in the number of firms producing notebook computers

After the government imposed a $0.20 per gallon tax on gasoline, the price of a gallon of gasoline increased from $1 to $1.15. Which of the following statements is true?

Consumers bear most, but not all of the tax burden

Assume that the current market equilibrium price for milk is $2.80/gallon and that 5 million gallons are sold per day. If the government sets a price ceiling of $2/gallon, which of the following is true?

Less than 5 million gallons of milk will be sold

The table below lists the monthly individual demand schedules for text messages for the only 3 buyers in the market. Which of the following combinations of price and quantity lies on the market demand curve?

P: 16 cents Q: 270

If an unusually cold summer destroyed a large portion of the bee population, the equilibrium price and quantity of honey produced by bees will most likely change in which of the following ways?

P: increase Q: decrease

Using graph What is the price paid by consumers and the net price received by producers after the tax is paid

Paid by consumers: $10.45 Received by producers: $9.45

An art student spends all of her income on pencils and drawing pads. The student currently buys 30 pencils at $1 each and 10 pads at $5 each. If the marginal utility of the 30th pencil is 100 utils and the marginal utility of the 10th pad is 400 utils, to maximize marginal utility the student should change her purchase of pencils and pads in which of the following ways?

Pencils: buy more Pads: buy less

If both supply and demand for wheat increase, the equilibrium price and quantity of wheat will most likely change in which of the following ways?

Price: indeterminate Q: increase

The diagram above depicts demand and supply curves in a city's rental housing market. If a price ceiling go $1,000 is imposed on the market, which of the following will occur?

The quantity of rental housing demanded will increase

Which of the following will not change the demand for lemons?

a change in the price of lemons

If hot dogs are an inferior good, an increase in income will result in

a decrease in the demand for hot dogs

If the cross-price elasticity of demand coefficient for two products is -0.8, then the products are

complements

Given the demand curve above, if price decreases from $8 to $4 per unit, total consumer surplus will

increase by $18

A rise in the price of corn, a substitute good for potatoes, will...

increase the demand for potatoes

Which of the following will tend to make the demand for a product more elastic?

new firms which produce similar products enter the industry

If the demand for a good is perfectly inelastic in the short-run and the supply curve is upward sloping, imposing a sales tax on the good will

not change the after-tax revenues received by suppliers

If a 10% increase in the price of a good leads to a 25% decrease in the quantity demanded of the good, demand is

relatively elastic

One reason consumers typically increase the quantity of a good they purchase when the price of the good decreases is that

the consumers' purchasing power increases

Which of the following is true if consuming 1 unit of a good yields 100 utits and consuming the second unit of the good increases satisfaction by 20 utils?

the total utility of consuming 2 units is 120

Total revenue is maximized when demand is

unit elastic