.
The figure above shows the market for MP3 players, where S is the supply curve and D is the demand curve before any tax. The government imposes a $10 per unit tax on buyers of MP3 players. Based on the figure above, after the tax is imposed, the price (including the tax) paid by the buyer is ________ per MP3 player.
$105
The figure above shows the market for MP3 players, where S is the supply curve and D is the demand curve before any tax. The government imposes a $10 per unit tax on buyers of MP3 players. Based on the figure above, after the tax is imposed, the government collects tax revenue of ________ a week.
$20,000
The following figure shows the demand and supply curves for USB flash drives at different price levels. D is the demand curve, and S1 is the initial supply curve. Refer to the figure above. When the demand curve for flash drives is D and the supply curve of flash drives is S1, the equilibrium price is ________.
$5
The figure above shows the market for MP3 players, where S is the supply curve and D is the demand curve before any tax. The government imposes a $10 per unit tax on buyers of MP3 players. Based on the figure above, after the tax is imposed, the price received by the seller is ________ per MP3 player.
$95
When the price of bananas increases by 36%, Nyawira reduces her purchase of peanut butter by 50%. Nyawira's cross-price elasticity of demand for peanut butter is ________. For Nyawira, peanut butter and bananas are ________ (substitute/compliments). Round your final answer to two decimal places.
-1.39, complements
The following figure shows the demand and supply curves for USB flash drives at different price levels. D is the demand curve, and S1 is the initial supply curve. Refer to the figure above. When the supply curve of flash drives is S2 and the demand curve of flash drives is D, what is the surplus in the market when the price is $7?
0 units
Suppose an increase in supply lowers the price from $10 to $8 and increases the quantity demanded from 100 units to 130 units. At the midpoint between these two prices, the elasticity of demand equals
1.17.
Scott and Cindy both produce only pizza and tacos. In one hour, Scott can produce 20 pizzas or 40 tacos. In one hour, Cindy can produce 30 pizzas or 40 tacos. Scott's opportunity cost of producing 1 taco is
1/2 of a pizza.
The figure above shows the production possibilities frontiers for the United Kingdom and France. What is the opportunity cost of one bushel of wheat in France?
1/4 of a pound of fish
The table above gives the production possibilities frontier for two countries, Anaconda and Bear. The opportunity cost of moving from production point B to production point C for Anaconda equals ________ and for Bear equals ________.
100 pairs of shoes; 200 pairs of shoes
The figure above shows the demand curve for Starbucks latte.In the figure above, at the point where the price is $4 per cup the price elasticity of demand is
2
Assume that a consumer can spend $20 on two goods-pens and pencils. If the price of one pen is $5 and the price of one pencil is $2, which of the following combinations of the two goods represents a point on the consumer's budget constraint?
2 pens and 5 pencils
The table above presents the production possibilities frontier for a nation. Using the information in the table, moving from possibility C to B means that
2 units of capital goods are given up to get 10 additional units of consumption goods.
The graph shows the market for apartments in Rivercity. As a result of the rent ceiling of $1,900, ________ are rented and people are willing to incur search costs of ________.
3,000; more than $200
Suppose that in the short run, the price elasticity of supply is 0.6 and in the long run the price elasticity of supply is 2.2. The price increases by 85%, the change in quantity supplied in the short run is ________ and the change in quantity supplied in the long run is ________. Round your final answer to one decimal place.
51, 187
The figure above shows the market for brooms. If the market is efficient
600 brooms are produced.
The following figure shows the demand curves for pens for two consumers. Assuming that the market consists of only these two consumers, what is the market demand for pens when the price is $4?
65 units
Which of the following is not an example of a market?
A city requires homeowners to pay $500 for putting in a sidewalk on their street
________ is the amount of money a government collects through a tax.
A tax revenue
The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours. For Kaley and Scott, allocative efficiency is achieved at what point?
C
Suppose that the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward. Which of the following could have caused these shifts?
Desktop computers are a normal good and incomes increased, while the labor costs of producing personal computers increased.
If the demand for gem-quality diamonds decreases AND the supply of gem-quality diamonds decreases, what can be said about equilibrium price and quantity in this market?
Equilibrium quantity will fall, but the change in equilibrium price is uncertain.
A construction boom occurs and many of the new buildings need plywood for their framing. Which of the figures above best illustrates this change?
Figure A
The above figures show the market for HD televisions. If people's incomes increase and HD televisions are a normal good, which figure shows the effect of this change? Correct answer:
Figure A
The above figures show the market for HD televisions. If research is published showing that watching HD television shows causes eye damage, then which figure shows the effect of this change?
Figure B
New technology for producing plywood is developed. Which of the figures above best illustrates this change?
Figure D
Suppose that Germany, France, Estonia, and India all have the same production possibilities, illustrated in the figure above. Based on the production points in the figure, which country is most likely to expand its PPF to PPF3?
Germany
Which of the following shifts the demand curve? Correct answer:
Hinrik believes there will soon be a shortage of toilet paper, so he stocks up and buys four packages the next time he goes grocery shopping,
Consider the market for frozen yogurt. Assume the market starts at point A. Which of the following is TRUE?
If frozen yogurt is a normal good, an increase in income leads to a shift from D1 to D2 and a movement along the supply curve.
In Brazil, more than 60 percent of sugar cane grown is harvested by hand. In São Paulo state, nearly 300,000 workers are employed in sugar cane harvesting. Manual harvesting requires burning the cane fields prior to harvest to remove the cane's sharp leaves and drive snakes from the fields. Burning the cane fields, however, gives off large quantities of ammonia and nitrogen oxide, which lead to ozone creation. In São Paulo state, a layer of ash covers cars, and nitrogen oxide levels double during the harvest period. The nitrogen oxide produced from burning the cane fields can lead to acid rain and changes in water quality. In the graph below, the socially optimal level of production occurs at which point?
Q1
The following figure depicts the market for a certain good and the incidence of a tax on consumers. Refer to the figure above. The incidence of the tax on consumers is ________.
Region 2
The following figure depicts the market for a certain good and the incidence of a tax on consumers. Refer to the figure above. The producer surplus after the tax is imposed on consumers is ________.
Region 4
An example of someone bearing the burden of a negative production externality would be
Taylor living downwind from a smelly feedlot where pigs are raised.
Which of the following statements is correct?
The income elasticity of demand for normal goods is positive.
Why do some workers lose their job when the minimum wage is increased?
The increase in the minimum wage decreases the quantity of labor demanded.
Assume you are in a store looking at a shirt you want. You expect to buy the shirt until you look at the price, then you decide the shirt is not a good buy. How can your decision be viewed in economic terms?
The shirt's marginal utility divided by price was too low compared to other goods.
Which of the following occurs when a market is efficient?
The sum of consumer surplus and producer surplus is maximized.
Which of the following is the best definition of an externality?
When an economic activity imposes spillover costs or benefits on a third party
Which of the following shifts the demand curve for movies leftward?
a decrease in the price of Netflix, a substitute for movies
The total revenue test says that if a price decrease leads to
a decrease in total revenue, demand is price inelastic.
The figure above shows two budget lines. Based on the figure above, which of the following would lead the budget line to change from BL0 to BL1?
a fall in the price of water
The labor demand and labor supply schedules are given in the table above. If a minimum wage of $11 per hour is imposed
a surplus of 300 workers occurs.
Your economics professor offers 10 points extra credit if you attend a review session before your next exam. This extra credit is an example of
an incentive to attend the review session.
The following figure shows a consumer's budget constraint for jeans and sweaters. Refer to the figure above. Suppose B2 is the original budget constraint of a consumer. A change in the budget constraint from B2 to B3 indicates ________.
an increase in the consumer's income
John has two hours of free time this evening. He ranked his alternatives, first go to a concert, second go to a movie, third study for an economics exam, and fourth answer his e-mail. What is the opportunity cost of attending the concert for John?
attending a movie
If the price of the good measured on the x-axis becomes relatively cheaper, the budget line will
become flatter.
Consumer surplus is the area
below the demand curve and above the market price up to the quantity consumed.
In order to maximize his or her utility, a consumer must allocate his or her entire budget and
buy the combination of goods that equalizes the marginal utility per dollar from all goods.
Mulch is shredded wood and is a by-product in the production of lumber. Because these two goods are produced together, they are
complements in production.
Other things remaining same, a leftward shift in the demand curve will lead to a(n) ________.
decrease in the equilibrium price and the equilibrium quantity
The ________ plots the relationship between prices and the quantity that buyers are willing to purchase.
demand curve
Tax incidence is the
division of the burden of a tax between the buyer and the seller.
Consider the market for peanut butter. If there is a decrease in the price of deli turkey slices (a substitute in consumption for peanut butter) along with a decrease in the price of peanut brittle (a substitute in production for peanut butter), the
equilibrium price of peanut butter definitely falls.
The figure above shows the production possibilities frontiers for the United Kingdom and France. If the United Kingdom and France specialize and engage in trade, the United Kingdom will export ________ and France will export ________.
fish; wheat
The graph shows the budget line facing Jeanne. The price of smoothies is $4 and the price of a cup of coffee is $2. The combinations of smoothies and coffees on the budget constraint means that Jeanne
has a budget of $20.
A ________ curve means that ________. Incorrect answer:
horizontal supply; the elasticity of supply is infinite
Which of the following is TRUE? i.The demand for a good is elastic if when its price changes, the percentage change in the quantity demanded exceeds the percentage change in price. ii.Price elasticity of demand equals the percentage change in price divided by the percentage change in the quantity demanded. iii.If demand is price inelastic, a rise in price leads to a decrease in total revenue.
i only
Neither the demand nor the supply of automobiles is perfectly elastic or inelastic. If the government imposes a $1,000 tax on automobiles, then the price of an automobile buyers pay
increases by less than $1,000.
You own a small store. Your cashier thinks you should raise prices to increase your total revenue and your customer thinks you should lower prices to increase your total revenue. The cashier thinks the price elasticity of demand is ________ and the customer believes the price elasticity of demand is ________.
inelastic; elastic
The figure above shows the market for MP3 players, where S is the supply curve and D is the demand curve before any tax. The government imposes a $10 per unit tax on buyers of MP3 players. Based on the figure above, the burden of the tax
is split equally between the buyer and the seller.
Which of the following correctly lists the categories of factors of production?
land, labor, capital, and entrepreneurship
Two goods are said to be substitutes when a fall in the price of one good ________.
leads to a leftward shift in the demand for the other good
Your friend, Kosuke, has an upcoming birthday. You need to decide if you will buy him a cake or bake him a cake. The local bakery has a cake he will love for $10. If you decide to buy him a cake, it will cost $2 for ingredients plus take 1.50 hours of your time. After calculating your opportunity costs, you decide that the rational choice will be to make him the cake. How much is an hour of your time worth? Round your final answer to two decimal places.
less than $5.33
Assume that the area of A=71, B=25, C=5, D=52, E=3, and F=20. At Q1 ________ exceeds the ________ of records. What is consumer surplus? What is producer surplus?
marginal benefit, marginal cost, $96, $72
The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's
marginal benefit.
The figure above shows the market for brooms. If 800 brooms are produced Incorrect answer:
marginal cost exceeds marginal benefit.
The table lists the price of honey and the number of bottles of honey purchased per week. Price of Honey, in $(Y)Number of Bottles Purchased Per Week (X)1020092108220723062405250 The price of honey and the number of bottles of honey purchased per week has a ________ relationship with a slope of ________.
negative, -0.1
Suppose the demand for peaches from South Carolina is perfectly elastic. If the supply curve is upward sloping and a tax is imposed on peaches from South Carolina, then
peach sellers pay all of the tax.
Canned milk was only rationed to babies and small children during World War II. This rationing was an example of allocation by
personal characteristics.
Consider a market where the demand curve is downward sloping and the supply curve is upward sloping (so they are neither vertical nor horizontal). If the consumers' willingness to pay for the hundredth unit is $7.00 and the seller's willingness to accept for the hundredth unit is $10.00, then the equilibrium ________.
quantity is less than 100 units
The figure above shows the production possibilities frontier for a country. If the country is producing at point D, then the
resources are not being used efficiently and/or are unemployed.
In the figure above, suppose that the government imposes a tax of $4 per pizza. Then, the
shaded area is the deadweight loss from the tax. and buyers and sellers equally share the incidence of the tax.
In a competitive market with no externalities
the burden of the tax will fall entirely on the buyers
A price floor is
the lowest legal price at which a good or service can be traded.
As part of its proposal to win the 2012 Olympics, London developed a carbon offset plan to reduce the Games' impact on the environment. In 2011, the organizers decided to drop this plan to reduce emissions. We can conclude that
the marginal cost of reducing emissions exceeded the marginal benefits of reducing emissions.
If Jessie studies economics for two hours instead of going to the movies with her friends, then
the opportunity cost of studying is the missed movie.
If negative externalities are present in a market, ________.
the quantity supplied in the market is larger than the socially optimal level
If a ton of newspaper costs $350 to produce and in the process causes $10 worth of pollution damage to the environment, then ________.
the social cost is $360 per ton and the private cost is $350 per ton
The price elasticity of demand for product A is 2.32. The price elasticity of demand for product Z is 0.12.This difference could be due to the fact that
there are many good substitutes for product A and few substitutes for product Z. Product Z is a necessity and product A is a luxury.
The above figure shows the market for game day t-shirts. If the price of t-shirts is $8, then
there is a shortage and the price of t-shirts will rise.
The demand and supply schedules for pizza are in the table above. If the government sets a maximum legal price of $4 per slice of pizza, then
there is a shortage of 20 slices of pizza. this maximum price is an example of a price ceiling.
The labor demand and labor supply schedules are given in the table above. If a minimum wage of $9 per hour is imposed
there is no surplus or shortage of workers.
To a seller, the cost of a good or service is ________, and the price is ________.
what must be given up to produce the good or service; what is received for the good or service
The following figure shows the budget constraint of Lesley when she is faced with two goods: burgers and ice cream. Refer to the figure above. If the price of a burger doubled, Lesley's new budget constraint ________.
will start from the same point on the vertical axis, but will cross the horizontal axis at 3
In the figure above, if the wage rate is $6 per hour, then the
workers' surplus is the area a + b + c. , Not Selected. deadweight loss equals zero. firms' surplus is the area d + e + f.
