ECON Exam 1
Chad is willing to pay $5.00 to get his first cup of morning latte. He buys a cup from a vendor selling latte for $3.75 per cup. Chad's consumer surplus is
$1.25.
If the equilibrium price is $200, what is the producer surplus?
$10,000
What is the consumer surplus if the price is $100?
$2,500
At the equilibrium price, producer surplus is
$200
If the price of the good is $150, then consumer surplus amounts to
$250.
At the equilibrium price, consumer surplus is
$300
Supposed the price of the good is $450. Then, on the first unit of the good that is sold, producer surplus is
$350, and on the second unit of the good that is sold, producer surplus is $150
Michael values a stainless steel refrigerator for his new house at $3,500, but he succeeds in buying one for $3,000. Michael's consumer surplus is
$500
If the equilibrium price is $50, what is the producer surplus?
625
The movement from point A to point B on the graph is caused by
An increase in the price of the good.
The movement from point A to point B on the graph shows
An increase in the quantity demanded.
Ashley bakes bread that she sells at the local farmer's market. If she purchases a new convection oven that reduces the costs of baking bread, the
supply curve for Ashley's bread will increase.
If these are the only four sellers in the market, then when the price increases from $6 to $8, the market quantity supplied
Increases by 2 units.
When the demand for a good increases and the supply of the good remains unchanged, consumer surplus
may increase, decrease, or remain unchanged
A decrease in quantity demanded
results in a movement upward and to the left along a demand curve.
If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is
0 units.
If these are the only four sellers in the market, then when the price decreases from $10 to $8, the market quantity supplied decreases by
10 units.
The opportunity cost of this economy moving from point A to point C is
125 soccer balls.
If these are the only two sellers in the market, then the market quantity supplied at a price of $4 is
14 units.
What is the opportunity cost to libraryland of increasing the production of books from 200 to 300?
150 magazines
Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of cookies from 200 dozen to 400 dozen ?
200 pounds of coffee
If the production frontier is bowed outwards, then "?" Could be
250.
If the market consists of Michelle and Hillary only and the price falls by $1, the quantity demanded in the market increases by
3 units.
If these are the only four sellers in the market, then the market quantity supplied at a price of $4 is
30 units
If Consumer A and Consumer B are the only consumers in the market, then the market quantity demanded when the price is $10 is
4 Units
If the market consists of Michelle, Laura, and Hillary and the price falls by $1, the quantity demanded in the market increases by
5 units.
Table 2-5 shows one set of production possibilities. Which of the following combinations of cookies and coffee is not currently attainable but would be attainable if there was an improvement in overall production technology?
500 dozen cookies and 850 pounds of coffee
If this economy devotes all of its resources to the production of notepads, then it will produce
70 notepads and 0 lamps
What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300
75 waffles
Which of the following would cause the supply curve to shift from supply A to Supply C in the market for tennis racquets?
A decrease in the price of tennis racquet strings.
When the price is P1, consumer surplus is
A+B+C.
Which of the following combinations of points are both effiecient and attainable for this economy?
A,D,H
Which of the following would cause the supply curve to shift from supply B to supply A in the market for disposable ballpoint pens?
An increase in the price of ink
One difference between points A and B is that
All resources are fully employed at point A but there is unemployment at point B
Which of the following would cause the supply curve to shift from supply B to supply A in the market for tennis racquets?
An expectation by firms that the price of tennis racquets will increase in the very near future.
If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers's income rise?
Both the equilibrium price and quantity would decrease.
If consumers view cappuccinos and lattes as substitutes, what would happen to the equilibrium price and quantity of lattes if the price of cappuccinos rises?
Both the equilibrium price and quantity would increase.
Any point on a country's production possibilities frontier represents a combination of two goods that an economy
Can produce using all available resources and technology.
Which of the following would cause the supply curve to shift from supply A to Supply C in the market for winter coats?
Decrease in the price of zippers and snaps
Nemo rents 5 movies per month when the price is $3.00 per rental and 7 movies per month when the price is $2.50 per rental. Nemo's demand demonstrates the law of
Demand.
The shift of the production possibilities frontier from A to B illustrates
Economic growth.
Suppose that demand for a good decreases and, at the same time, supply of the good decreases. What would happen in the market for the good?
Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
If price in this market is currently $14, then there would be a(n)
Excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price
Which points are not currently attainable but could become achievable for this economy if there is an improvement in technology
F,G
Recent forest fires in the western states are expected to cause the price of lumber to rise in the next six months. As a result, we can expect the supply of lumber to
Fall now.
This economy cannot currently produce 30 notepads and 45 lamps because
Given its current technology, it does not have the resources to produce that level of output.
Whose demand does not obey the law of demand?
Grover's
Efficient production is represented by which points?
K,N
The slope of a steep upward-sloping line will be a
Large positive number.
The opportunity cost of obtaining 20 additional lamps by moving from point W to point V is
None of the above, the economy cannot move from point W to point V
Economist believe that production possibilities frontiers
Often have a bowed shape.
If the demand curve shifts from D to D' , then
People are willing to buy less of the good than before at each possible price.
A market demand curve shows how the total quantity demanded of a good varies as
Price varies
Area B represents
Producer surplus to new producers entering the market as the result of an increase in the price from p1 to p2.
If there is currently a shortage of 20 units of the good, then the law of
Supply and demand predicts that the price will fall by $2 to eliminate the shortage
Whose demand does not obey the law of demand?
Taboo's
Which of the following events would explain the shift of the production possibilities frontier from A to B?
The Economy experienced a technological advance in the production of books.
What would happen to the equilibrium price and quantity of lattes if coffee shops began using a machine that reduced the amount of labor necessary to produce them?
The equilibrium price would decrease, and the equilibrium quantity would increase.
What would happen to the equilibrium price and quantity of lattes if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattes, and scientists discover that coffee prevents heart attacks?
The equilibrium quantity would increase, and the effect on equilibrium price would be ambiguous.
Area A Represents
The increase in producers surplus to those producers already in the market when the price increases from p1 to p2.
"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls the quantity of demand rises." This relationship between price and quantity of demanded is referred to as
The law of demand.
A decrease in the number of sellers in the market causes
The supply curve to shift to the left.
A production possibilities frontier can shift outward if
There is a technological improvement.
The opportunity cost of this economy moving from point D to point B is
Zero
Suppose Spencer and Kate are the only two demanders of lemonade. Each month, Spencer buys six glasses of lemonade when the price is $1.00 per glass, and he buys four glasses when the price is $1.50 per glass. Each month, Kate buys four glasses of lemonade when the price is $1.00 per glass, and she buys two glasses when the price is $1.50 per glass. Which of the following points is on the market demand curve?
b and d only
A shortage results when a
binding price ceiling is imposed on a market
A surplus results when
binding price floor is imposed on a market
A decrease in the price of a good will.
decrease in quantity supplied
If the government removes a binding price ceiling from a market, then the price received by sellers will
increase, and the quantity sold in the market will increase.
When the supply of a good increases and the demand for the good remains unchanged, consumer surplus
increases
A group of buyers and sellers of a particular good or service is called a(n)
market
A market supply curve shows how the total quantity supplied of a good varies as
price varies
Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for
razors to increase
A dress manufacturer recently has come to expect higher prices for dresses in the near future. We would expect
the dress manufacturer to supply fewer dresses now than it was supplying previously