Micro Assignment 2

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 a. $150. b. $350. c. $500. d. $850.

a. $150

When the price is P1, area C represents a. total benefit. b. producer surplus. c. consumer surplus. d. None of the above is correct.

b. producer surplus

From our discussion on price ceilings/floors, which of the following would be true if the government imposed a minimum wage below the equilibrium wage? a. Nothing. It would be a non-binding price floor. b. It would be a binding price floor, and it would generate a surplus of labor. c. Nothing. It would be a non-binding price ceiling. d. It would be binding, and it would generate a shortage of labor.

a. Nothing. It would be a non-binding price floor.

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 a. elastic, and the price elasticity of supply is 1.74. b. elastic, and the price elasticity of supply is 0.57. c. inelastic, and the price elasticity of supply is 1.74. d. inelastic, and the price elasticity of supply is 0.57.

a. elastic, and the price elasticity of supply is 1.74.

A legal minimum on the price paid for a given good/service is called a a. price floor. b. reservation price. c. price support. d. price ceiling.

a. price floor.

A university's football stadium is never more than half-full during football games. This suggests that a. the ticket price is above the equilibrium price. b. the ticket price is below the equilibrium price. c. the ticket price is at the equilibrium price. d. nothing about the equilibrium price.

a. the ticket price is above the equilibrium price.

Jasmine and Jimmy own a food truck where they sell delicious plant-based food. The price elasticity of demand for their products is εD=0.9. This means that their Total Revenue... a. will go up if they increase their prices. b. will go down if they increase their prices. c. will go up if they decrease their prices. d. will stay the same if they change their prices.

a. will go up if they increase their prices.

Anne created a new software program she is willing to sell for $300. She sells her first copy and enjoys a producer surplus of $180. What is the price paid for the software? a. $120 b. $480 c. $180 d. $300

b. $480

At equilibrium, total surplus is a. $36. b. $54. c. $18. d. $108.

b. $54

Using the midpoint method, the price elasticity of demand between point Y and point Z is a. 0.5. b. 0.75. c. 1.0. d. 1.3.

b. 0.75

If the demand curve is D and the supply curve shifts from S' to S, what is the change in producer surplus? a. Producer surplus increases by $625. b. Producer surplus increases by $1,875. c. Producer surplus decreases by $625. d. Producer surplus decreases by $1,875.

b. Producer surplus increases by $1,875.

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 a. increases and the equilibrium quantity decreases. b. decreases and the equilibrium quantity increases. c. is ambiguous and the equilibrium quantity increases. d. decreases and the equilibrium quantity is ambiguous.

b. decreases and the equilibrium quantity increases.

A manufacturer produces 1,000 units, regardless of the market price. For this firm, the price elasticity of supply is a. infinity. b. zero. c. one. d. negative one.

b. zero

Suppose Phil and Miss Kay are the only consumers in the market. If the price is $10, then the market quantity demanded is a. 0 units. b. 2 units. c. 4 units. d. 6 units.

c. 4 units

Which of the following movements would illustrate the effect in the market for graduation photoshoots resulting from a decrease in the number of photographers? a. Point A to Point B b. Point C to Point B c. Point C to Point D d. Point A to Point D

c. Point C to Point D

Which of the following would cause the supply curve to shift from Supply A to Supply B in the market for t-shirts? a. an increase in the price of t-shirts b. an increase in the price of cotton. c. a decrease in the price of cotton d. a decrease in the number of firms selling t-shirts

c. a decrease in the price of cotton

At a price of $15, there would be a a. surplus of 400 units. b. shortage of 200 units. c. shortage of 400 units. d. shortage of 600 units.

c. shortage of 400 units.

Which of the following statements is true based on the conditions in the market? a. ​a shortage will develop when a price ceiling is imposed at a price of $10. b. ​a surplus will develop when a price floor is imposed at a price of $8. c. ​a surplus will develop when a price floor is imposed at a price of $12. d. ​a shortage will develop when a price ceiling is imposed at a price of $14.

c. ​a surplus will develop when a price floor is imposed at a price of $12.

Suppose the government imposes a $4 tax on the seller in the market above. Which of following statements is true regarding the economic incidence of the tax? a. The seller bears the entire burden of the tax. b. The buyer bears the entire burden of the tax. c. The seller bears 75% of the burden of the tax, and the buyer bears 25% of the burden of the tax. d. The seller and buyer each bear 50% of the burden of the tax.

d. The seller and buyer each bear 50% of the burden of the tax.

A legal maximum on the price at which a good can be sold is called a price a. floor. b. subsidy. c. support. d. ceiling.

d. ceiling