Econ test 2
the market quantity of apples demanded per day is exactly seven if the price of an orange, P, satisfies
$.60<P<$.75
The market quantity of apples demanded per day is exactly seven if the price of an orange, P, satisfies
$.60<P<2.00
Evan purchases a wall calendar for $9, and his consumer surplus is $1. How much is Evan willing to pay for the wall calendar?
$10
if the price is $17, then consumer surplus in the market is
$15 and alexa, erica, and biyu purchase the good.
In the absence of trade, the equilibrium price of coffee in Uganda is ..., and total surplus in Uganda is represented by the area ...
$45; C+B+A+F+D
If the price index was 90 in Year 1, 100 in Year 2, and 95 in Year 3, then the economy experienced
11.1 percent inflation between Years 1 and 2, and 5 percent deflation between Years 2 and 3.
if there is only one unit of the good and if the buyers bid against each other for the right to purchase it, then the good will sell for
21 or slightly more
the CPI is more commonly used as a gauge of inflation than the GDP deflator is because the
CPI better reflects the goods and services bought by consumers.
Suppose India exports televisions to Italy and imports sugar from Argentina. This situation suggests
India has a comparative advantage relative to Italy in producing televisions, and Argentina has a comparative advantage relative to India in producing sugar.
In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that
Moldova is a price taker.
If Year 1 is the base year and Year 2 is the following year, then the inflation rate in Year 2 equals
[(CPI in Year 2 − CPI in Year 1)/CPI in Year 1] × 100.
Henry is willing to pay 45 cents, and Janine is willing to pay 55 cents, for 1 pound of bananas. When the price of bananas falls from 50 cents a pound to 40 cents a pound possibly due to technological improvement in the production of bananas,
both Janine and Henry experience an increase in consumer surplus.
on a graph, the area below a demand curve and above the price measures
consumer surplus
a drought in spain destroys many red grade causing the prices of both red grapes and red wine to rise. as a result, the consumer surplus in the market for red grapes.
decreases, and the consumer surplus in the market for red wine decreases.
When the demand for a good increases and the supply of the good remains unchanged, consumer surplus ... Also, suppose televisions are a normal good and buyers of televisions experience a decrease in income, consumer surplus in the television market ....
decreases; decreases.
with trade, uganda will
export 11 units of coffee
As the price elasticities of supply and demand increase, the deadweight loss from a tax increases, and the lesser the tax revenue.
false
Total surplus in a market does not change when the gov imposes a tax on that market because the loss of consumer surplus and producer surplus is equal to the gain of gov revenue.
false
US GDP includes the market value of rental housing, but not the market value of owner occupied housing services
false
total surplus is always equal to sum of consumer surplus and produced surplus
false
for any given year, the CPI is the price of the basket of goods and services in the
given year divided by the price of the basket in the base year, then multiplied by 100.
The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that
if Wheatland were to allow trade, it would import corn.
Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began
importing televisions and the price of a television in Paraguay decreased to $300.
When trade in coffee is allowed, producer surplus in Uganda
increases by the area B + F + H.
With trade and without a tariff,
the domestic price is equal to the world price.
changes in inventory are included in the investment component of GDP.
true
if a good produced this quarter goes into inventory, then it is included in this period's GPD. If it is sold in the next quarter, it will have no effect on GDP.
true
tax revenue equals the size of the tax multiplied by the quantity sold in the market after the tax is levied
true
taxes cause deadweight because they prevent buyers and sellers from realizing some of the gains from trade. and because taxes distort incentives, they cause markets to allocate resources inefficiently.
true
the goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously
true
when a tax is imposed on sellers, consumers surplus and producer surplus both decrease. This is because taxes affect market participants by increasing the price paid by the buyer and decreasing the price received by the seller.
true
when a tax is imposed, the loss of consumer surplus and producer(...) as a result of the tax exceeds the tax revenue by the gov.
true
when an american doctor opens a practice in Bermuda, his production there is part of US GNP
true
the consumer price index is used to
turn dollar figures into meaningful measures of purchasing power