AP Micro Economics Unit 2 Test Corrections

The table above shows the supply and demand schedules in the orange market. Assume that the demand and supply curves are linear. At the market equilibrium price, what are the consumer surplus and the producer surplus?

Consumer surplus is $50; producer surplus is $50

In the market described by the diagram above, the total economic surplus will be maximized at which of the following price and quantity combinations?

P2 and Q2

The graph above shows the domestic market for sandalwood in equilibrium at a price of $800 per kilogram in the absence of international trade. Now assume the country begins to engage in international trade, and sandalwood is selling at a price of $600 per kilogram in the world market. Which of the following would most likely result?

The country would import sandalwood, and its total surplus would increase, with the domestic consumer surplus increasing by more than the domestic producer surplus decreases.

Which of the following statements is true about the demand curve above?

The elasticity of demand decreases when moving from point X to point Y.

Which of the following will occur as a result of a decrease in the prices of the inputs used to produce a good?

The quantity supplied would increase at each possible price for the good.