Econ midterm 1
Refer to Table 13-7. What is the value of B?
$100
Refer to Table 13-7. What is the value of C?
$100
If a 40% change in price results in a 25% change in quantity supplied, then the price elasticity of supply is about
0.63, and supply is inelastic.
Refer to Figure 6-14. The effective price that sellers receive after the tax is imposed is
10
If the price of the good is $600, then producer surplus amounts to
1000
Refer to Table 14-4. What is the total revenue from selling 4 units?
480
Refer to Table 14-6. In order to maximize profits, the firm will produce
5 units
Refer to Table 13-8. What is the marginal cost of producing the fifth unit of output?
70
When the price rises from P1 to P2, which area represents the increase in producer surplus to existing producers?
A
Refer to Figure 15-4. What price will the monopolist charge in order to maximize profit?
B
If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?
Both the equilibrium price and quantity would decrease.
A legal minimum on the price at which a good can be sold is called a price
Floor
Refer to Figure 15-2. If the monopoly firm is currently producing Q4 units of output, then a decrease in output will necessarily cause profit to
Increase if the output is between Q3 and Q4
Refer to Figure 15-6. What is the socially efficient price and quantity?
Price = Y and Quantity = k
Refer to Figure 6-11. If the government imposes a price ceiling at $3, it would be
binding if market demand is Demand A or Demand B.
A decrease in quantity supplied
results in a movement downward and to the left along a fixed supply curve.
Refer to Table 13-7. What is the value of A?
$50
Refer to Table 13-7. What is the value of D?
$50
Refer to Table 4-6. Which combination would produce a decrease in equilibrium quantity and an indeterminate change in equilibrium price?
A decrease in supply and decrease in demand
Refer to Figure 7-17. Which area represents total surplus in the market when the price is P1?
B+C
If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $90.
False
Producer surplus is the cost of production minus the amount a seller is paid.
False
The price elasticity of demand is defined as the percentage change in price divided by the percentage change in quantity demanded.
False
An increase in price causes an increase in total revenue when demand is
Inelastic
Refer to Figure 6-6. If the government imposes a price floor of $6 on this market, then there will be
No surplus
Suppose that when income rises, the demand curve for doctor's visits shifts to the right. In this case, we know doctor's visits are
Normal good
Refer to Figure 15-4. How much output will the monopolist produce in order to maximize profit?
O
Selling the same good at different prices to different customers is known as
Price discrimination
When buyers in a competitive market take the selling price as given, they are said to be
Price takers
Refer to Figure 5-18. Which supply curve represents perfectly inelastic supply?
S1- vertical
Which of the following is not a characteristic of a perfectly competitive market?
Sellers set the price of the product.
If Erin's income decreases and, as a result, she chooses to buy fewer milkshakes per month at each price, then her demand curve will
Shift to the left
If a tax is levied on the sellers of a product, then the supply curve will
Shift up
Which of the following is a necessary characteristic of a monopoly?
The firm is the sole seller of its product.
A profit-maximizing firm in a competitive market will decrease production when marginal cost exceeds average revenue.
True
Supply and demand together determine the price and quantity of a good sold in a market.
True
If macaroni and cheese is an inferior good, then an increase in
a consumer's income will cause the demand curve for macaroni and cheese to shift to the left.
An increase in the price of oranges would lead to
a movement up and to the right along the supply curve for oranges.
If the demand for a product decreases, then we would expect equilibrium price
and equilibrium quantity to both decrease.
Total surplus
can be used to measure a market's efficiency- is the sum of consumer and producer surplus.- is the to value to buyers minus the cost to sellers. Correct!
If a consumer places a value of $20 on a particular good and if the price of the good is $25, then the You Answered
consumer does not purchase the good.
If a good is normal, then an increase in income will result in a(n)
increase in the demand for the good.
A group of buyers and sellers of a particular good or service is called a(n)
market
A key characteristic of a competitive market is that
producers sell nearly identical products.
The deadweight loss associated with a monopoly occurs because the monopolist
produces an output level less than the socially optimal level.
If the number of sellers in a market increases, then the
supply in that market will increase.
Suppose that a tax is placed on books. If the sellers pay the majority of the tax, then we know that the
supply is more inelastic than the demand.
Refer to Figure 4-17. If the price is $25, then there would be an excess
supply of 300 units, and price would fall
