Microeconomics - midterm 2 multiple choice

Refer to Figure 9-5. With world trade, the price of tricycles in this country is

$11, with 200 tricycles produced in this country and another 320 tricycles imported

What is the seller's price with a tax?

$16 per unit

Refer to Figure 9-5. Without world trade, the price of a tricycle is

$19, with 360 tricycles produced in this country

What is the price without a tax?

$24 per unit

What is the buyer's price with a tax?

$32 per unit

`Refer to Figure 21-25. Suppose the price of good X is $10, the price of good Y is $5, and the consumer's income is $210. Then the consumer's optimal choice is to buy

14 units of good X and 14 units of good Y

Refer to Figure 21-16. The price of X is $20, the price of Y is $5, and the consumer's income is $40. Which point represents the consumer's optimal choice?

A

Refer to Figure 21-16. The price of X is $5, the price of Y is $20, and the consumer's income is $40. Which point represents the consumer's optimal choice?

C

If hotdogs and hotdog buns are both complements and inferior goods,

Cross price elasticities are negative for both goods and income elasticity of demand for both goods is negative

What is the size of the tax? if the points A and B depict the tax?

The tax is $16 per unit

Which of the following goods would you expect to have the least price-elastic supply (most inelastic) over a 2 year period (i.e., if prices changed 2 years ago, how much would the quantity supplied change between 2 years ago and today?

Vacation property on densely populated small island

Refer to Figure 9-20. From the figure it is apparent that

Vietnam has a comparative advantage in producing rice, relative to the rest of the world

Refer to Figure 9-20. Given that Vietnam is a small country, it is apparent from the figure that

Vietnam will export rice if trade is allowed

Refer to Figure 9-5. If this country allows free trade in tricycles,

consumers will gain and producers will lose

The principle of comparative advantage asserts that

countries can become better off by specializing in what they do best

Refer to Figure 9-20. With world trade, Vietnam will

export 1,500 units of rice

If Supply shifts to the left due to a shortage of fertilizer, which graph is most consistent with a scenario that will lead to increased revenues for suppliers?

graph b

If Supply shifts to the right due to good weather, which graph is most consistent with a scenario that will lead to increased revenues for suppliers?

graph b

Which graph is consistent with demand being elastic and supply being inelastic

graph b

Which graph is consistent with demand being inelastic and supply being elastic

graph c

Refer to Figure 21-25. Suppose the price of good X is $10, the price of good Y is $5, and the consumer's income is $210. Then the consumer's optimal choice is represented by a point on which curve?

i2

Refer to Figure 21-25. Suppose the price of good X is $8, the price of good Y is $10, and the consumer's income is $360. Then the consumer's optimal choice is represented by a point on which curve?

i4

Refer to Figure 9-5. With world trade, this country

imports 320 tricycles

Figure 21-25 The figure pertains to a particular consumer. On the axes, X represents the quantity of good X and Y represents the quantity of good Y Refer to Figure 21-25. The four curves that are drawn on the figure are

indifference curves

Which of the following combinations will minimize the deadweight loss (minimize trade distortion or minimize the reduction in trade) from a tax?

supply 1 and demand 1

If the law requires the buyer to send in the tax payment to the IRS, Which of the following combinations put more of the burden of taxation on the buyer

supply 1 and demand 2

If the law requires the seller to send in the tax payment to the IRS, Which of the following combinations put more of the burden of taxation on the seller

supply 1 and demand 2

If the law requires the buyer to send in the tax payment to the IRS, Which of the following combinations put more of the burden of taxation on the buyer

supply 2 and demand 1

If the law requires the seller to send in the tax payment to the IRS, Which of the following combinations put more of the burden of taxation on the buyer

supply 2 and demand 1

Which of the following combinations will maximize the deadweight loss (maximize trade distortion or maximize the reduction in trade) from a tax?

supply 2 and demand 2

A tax on an imported good is called a

tariff

Adam Smith believed that people's pursuit of their own self-interests

tended to promote the general welfare

The law of demand says that the lower the price of a good, other things constant,

the larger the quantity demanded of that good

Which of the following provides the foundation of the case for free trade?

the law of comparative advantage