Econ quizzes 4-6

Which of the following would you expect to have the least elastic demand?

penicillin.

In the range for which the demand curve for a good is above the supply curve

people value the good more than it costs to make it.

Therefore, if a producer has a marginal cost of $2, it will receive a surplus of

$4.

Price $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 Quantity supplied 0 50 75 100 125 150 175 200 225 250 Quantity demanded 200 180 165 100 95 90 85 60 40 0 Use this chart to answer the next question. The table shows price and quantity for M&M Chocolate Candys. If a law is passed fixing a maximum price of $3 (a price ceiling), we would expect

a shortage equal to 130 units.

The distance between Q1 and Q3 would represent

a shortage.

If a law is passed fixing a minimum price of $7 (a price floor), we would expect

a surplus equal to 50 units.

Elasticity of demand depends on

the closeness of substitutes.

If a good is a necessity, demand for that good would tend to be

inelastic.

When the price ceiling becomes law, we would expect quantity demanded

to rise from Q2 to Q3.

If the price of toasters is fixed by law above the market-clearing price

toaster inventories at appliance stores will be larger.

At any price above the equilibrium price

total surplus will be smaller.

Suppose the government puts a tax of $1 on each jar of applesauce purchased. As a result of the tax, the price consumers pay for a jar of applesauce

will rise by less than $1.

Price $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 Quantity supplied 0 50 75 100 125 150 175 200 225 250 Quantity demanded 200 180 165 100 95 90 85 60 40 0 Use the table to answer the next questions. At the equilibrium price, a producer who has a marginal cost of $3 and sells one unit will receive a surplus of

$2.

The equilibrium price and quantity in this market are

$6 and 125.

If a firm making widgets lowers its price by 10 percent and finds that it sells 8 percent more widgets, the absolute value of the elasticity of demand for its product equals

0.8

Price $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 Quantity supplied 0 50 75 100 125 150 175 200 225 250 Quantity demanded 200 180 165 140 125 100 85 60 40 0 Use the chart above to answer the next six questions. If quantity demanded falls from 500 to 400 when price rises from $4 to $5, the elasticity of demand equal

0.8

We can then expect the total amount spent on coffee to rise if the elasticity of demand is

0.8

If you raise your price by 50% and quantity demanded falls by 40%, the absolute value of the elasticity of demand for your product is

0.80

Use the chart to calculate the elasticity of supply for a price fall from $5 to $4.

1.25

If price elasticity of demand for a good is 3, then a 10% increase in price would be expected to result in a

30% decrease in quantity demanded.

If price elasticity of demand for a good is -5, then a 10% increase in price will result in

50% decrease in quantity demanded.

If Congress placed a luxury tax on yachts

All of the options will be true.

Which of the following will increase the number of umbrellas sold?

All of the options will increase the number of umbrellas sold.

At the equilibrium price, what is the consumer surplus and what is the producer surplus?

B is consumer surplus and C is producer surplus.

Use the graph above to answer the nest three questions. What area(s) show(s) total surplus at the equilibrium price?

B+C.

Use the figure to answer the next three questions. It gives the supply and demand for cameras. What would you expect to happen if the price of cameras falls sharply

Demand to shift to D1 and supply to shift to S2

What would you expect to happen if incomes rise and cameras are a normal good?

Demand to shift to D2.

If a law is passed fixing a minimum price of $3 (a price floor), we would expect

If a law is passed fixing a minimum price of $3 (a price floor), we would expect

As a result of the tax, what will happen to the number of jars of applesauce sold?

It will decrease.

For which product is demand likely to be the most elastic?

Kellog's Raisin Bran at BiLo.

If gasoline prices keep rising following war in the Middle East,

None of the options will be true.

According to the curves above, at a price of P1 suppliers are willing to sell ____ and demanders are willing to buy ____ gallons of gasoline.

Q1, Q4.

By contrast, at the equilibrium price, suppliers are willing to sell ____ and demanders are willing to buy ____ gallons of gasoline.

Q3, Q3.

For which of these goods would demand be least elastic?

Rent.

What would you expect to happen if the price of the chemicals used to make film rises?

Supply to shift to S1.

Which of the following would make the demand for Pepsi more elastic?

The launching of five new brands of cola by five different companies.

Which of the following leads to the producers paying most of a tax

The supply is inelastic.

If a frost kills a significant amount of the Brazilian coffee crop, we can expect the following to happen

all of the options provided.

If a good is "normal," an increase in income will result in

an increase in demand for the good.

Suppose the elasticity of demand for apple sauce is less than the elasticity of supply. Who will end up paying most of the $1 tax?

consumers.

A tax either on consumers or on producers

creates a deadweight loss for society as a whole.

Because the demand for wheat tends to be inelastic, the development of a new, more productive hybrid wheat would tend to

decrease the total revenue of wheat farmers.

Goods and services that can be produced by using commonly available resources that could be allocated to a wide variety of alternative tasks have a supply that is

elastic.

Suppose that a unit tax of $2 is imposed on producers and that the initial equilibrium price of the good is $10. With a vertical demand curve and an upward-sloping supply curve, we can predict that

he price faced by consumers is $12 after the tax.

Traveling by bicycle from Clemson to New York could be more efficient than flying in an airplane

if someone enjoys riding a bicycle enough.

Coffee growers will be happy about the frost only if demand is

inelastic.

Demand for maple nut ice cream tends to be elastic because

other flavors of ice cream are almost perfect substitutes.

"Elasticity" measures the relationship between

price and quantity.

A tax can be fully borne by consumers if

the demand is perfectly inelastic.

Use the figure to answer the next four questions. In the graph above, if the line marked "price control" is a price floor (a minimum price), we would expect

the quantity demanded and the quantity supplied to be equal.

If instead the line marked "price control" is a price ceiling (a maximum price), we would expect

the quantity demanded to be greater than the quantity supplied.

If price is raised by $2 and quantity falls by 20 percent, the elasticity of demand

there's not enough information to say.