Question 1

Assuming that the supply for a product is stable,an increase in price will lead to an increase in producer surplus.

Accepted Answer

A) True 
 B)False

Question 2

If the government sets a maximum price for gasoline above the equilibrium price,

Accepted Answer

A)  quantity demanded of gasoline will be equal to quantity supplied of gasoline. 
B)  there will be excess demand for gasoline. 
C)  there will be excess supply for gasoline. 
D)  demand for gasoline will be less than supply for gasoline. 
A)  quantity demanded of gasoline will be equal to quantity supplied of gasoline. 
B)  there will be excess demand for gasoline. 
C)  there will be excess supply for gasoline. 
D)  demand for gasoline will be less than supply for gasoline.

Question 3

The deadweight loss from a taxation is

Accepted Answer

A)  the difference between total burden of tax and the amount of revenue collected by the government. 
B)  affected by the size of the tax imposed by the government. 
C)  extra money consumers must pay for the tax imposed by the government. 
D)  B and C are correct 
A)  the difference between total burden of tax and the amount of revenue collected by the government. 
B)  affected by the size of the tax imposed by the government. 
C)  extra money consumers must pay for the tax imposed by the government. 
D)  B and C are correct

Question 4

Consumer surplus can be defined as the

Accepted Answer

A)  value a consumer receives from a good minus the price paid for that good. 
B)  maximum amount the consumer would pay for a good. 
C)  actual amount paid for a good minus the benefit of using that good. 
D)  marginal utility of a good divided by its price. 
A)  value a consumer receives from a good minus the price paid for that good. 
B)  maximum amount the consumer would pay for a good. 
C)  actual amount paid for a good minus the benefit of using that good. 
D)  marginal utility of a good divided by its price.

Question 5

A minimum price set below the market equilibrium will lead to excess supply and to a drop in the total surplus of the market.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would result from a quota imposed on the quantity of cars that can be imported into the United States?

Accepted Answer

A)  an increase in the total surplus 
B)  an increase in producer surplus 
C)  an increase in prices paid by consumers 
D)  an increase in consumer surplus 
A)  an increase in the total surplus 
B)  an increase in producer surplus 
C)  an increase in prices paid by consumers 
D)  an increase in consumer surplus

Question 7

Martha was willing to pay $200 for a new winter coat,but the current market price of coats is $150.Calculate Martha's consumer surplus.What happens to consumer surplus if the price of a coat rises to $175?

Accepted Answer

The consumer surplus Martha re

Question 8

In the market equilibrium,with a price of $500 there are 2,000 apartments.If the government decides to enact a rent control policy,with a maximum price of $400,it reduces the quantity to 1,500 apartments.Due to the rent control decreasing the total surplus of the market,the policy generates a(n)

Accepted Answer

A)  excess supply. 
B)  equilibrium. 
C)  higher price. 
D)  deadweight loss. 
A)  excess supply. 
B)  equilibrium. 
C)  higher price. 
D)  deadweight loss.

Question 9

Figure 6.1
  
-Refer to Figure 6.1.If the price of a donut is $ 0.25,consumer surplus is

Accepted Answer

A)  $3.50. 
B)  $3.00. 
C)  $1.50. 
D)  $0. 
A)  $3.50. 
B)  $3.00. 
C)  $1.50. 
D)  $0.

Question 10

Marty has a collection of beer cans that he is willing to sell for $850.Someone offers him $1,000 for his collection.Calculate Marty's producer surplus.What happens to Marty's producer surplus if someone offers him $1,200 instead?

Accepted Answer

The producer surplus Marty rec

Question 11

An import restriction on automobiles would lead to an increase in the price of automobiles and a decrease in consumer surplus.

Accepted Answer

A) True 
 B)False

Question 12

Suppose that the equilibrium rent for a two-bedroom apartment in downtown Chicago is $900 per month.The city council decides to place a maximum price on apartment rents and will not allow landlords to charge more than $700 per month.Illustrate this situation using a graph.Make sure that you show the original equilibrium and the effect of the maximum price on the market.What will happen in this market? What will happen to total surplus?

Accepted Answer

There will be an excess demand of apartm

Question 13

The proportion of the tax burden that falls on consumers depends on

Accepted Answer

A)  the price elasticity of demand. 
B)  the size of the tax. 
C)  the price elasticity of supply. 
D)  Both A and C are correct. 
A)  the price elasticity of demand. 
B)  the size of the tax. 
C)  the price elasticity of supply. 
D)  Both A and C are correct.

Question 14

Suppose that the market equilibrium price of TVs is $250,but manufacturers are not allowed to charge more than $200 due to a government regulation.Which of the following would be a definite result of imposing a maximum price?

Accepted Answer

A)  Consumer surplus will increase. 
B)  Producer surplus will decrease. 
C)  Government revenue will increase. 
D)  all of the above 
A)  Consumer surplus will increase. 
B)  Producer surplus will decrease. 
C)  Government revenue will increase. 
D)  all of the above

Question 15

A maximum price below the market equilibrium price will lower the total surplus of the market.

Accepted Answer

A) True 
 B)False

Question 16

Assume that there is rent control in Chicago.Which of the following is true?

Accepted Answer

A)  All consumers in the rental market will benefit because the rent will be lower. 
B)  The total surplus will fall because there will be a shortage of apartments. 
C)  The total surplus will rise because consumer surplus will increase. 
D)  Consumer surplus will increase and as a result all consumers in the rental market will benefit. 
A)  All consumers in the rental market will benefit because the rent will be lower. 
B)  The total surplus will fall because there will be a shortage of apartments. 
C)  The total surplus will rise because consumer surplus will increase. 
D)  Consumer surplus will increase and as a result all consumers in the rental market will benefit.

Question 17

A ban on imported avocados would result in

Accepted Answer

A)  an increase in total surplus because domestic production will increase. 
B)  no change in total surplus because the reduction in consumer surplus will offset the increase in producer surplus. 
C)  a reduction in total surplus because a deadweight loss is created. 
D)  It is impossible to say what will happen to total surplus. 
A)  an increase in total surplus because domestic production will increase. 
B)  no change in total surplus because the reduction in consumer surplus will offset the increase in producer surplus. 
C)  a reduction in total surplus because a deadweight loss is created. 
D)  It is impossible to say what will happen to total surplus.

Question 18

Tom would be willing to pay a maximum of $2,500 to attend the Super Bowl this year,and he can buy a ticket for $2,050.His consumer surplus is

Accepted Answer

A)  $25. 
B)  $50. 
C)  $275. 
D)  $450. 
A)  $25. 
B)  $50. 
C)  $275. 
D)  $450.

Question 19

If the supply of a good is relatively elastic,changing the price causes

Accepted Answer

A)  a relatively large change in the amount that consumers want to buy. 
B)  a relatively large change in the amount that sellers want to sell. 
C)  a relatively small change in the amount that sellers want to sell. 
D)  a relatively small change in the amount that buyers want to buy. 
A)  a relatively large change in the amount that consumers want to buy. 
B)  a relatively large change in the amount that sellers want to sell. 
C)  a relatively small change in the amount that sellers want to sell. 
D)  a relatively small change in the amount that buyers want to buy.

Question 20

-Figure 6.8 shows the market for taxicab services in a small town.If there is no government intervention and the supply of taxicab services reflects the law of supply,the price per mile traveled will be

Accepted Answer

A)  $1.00. 
B)  $1.50. 
C)  $2.00. 
D)  It is impossible to determine. 
A)  $1.00. 
B)  $1.50. 
C)  $2.00. 
D)  It is impossible to determine.

Assuming that the supply for a product is stable,an increase in price will lead to an increase in producer surplus.

If the government sets a maximum price for gasoline above the equilibrium price,

The deadweight loss from a taxation is

Consumer surplus can be defined as the

A minimum price set below the market equilibrium will lead to excess supply and to a drop in the total surplus of the market.

Which of the following would result from a quota imposed on the quantity of cars that can be imported into the United States?

Martha was willing to pay $200 for a new winter coat,but the current market price of coats is $150.Calculate Martha's consumer surplus.What happens to consumer surplus if the price of a coat rises to $175?

In the market equilibrium,with a price of $500 there are 2,000 apartments.If the government decides to enact a rent control policy,with a maximum price of $400,it reduces the quantity to 1,500 apartments.Due to the rent control decreasing the total surplus of the market,the policy generates a(n)

Figure 6.1 -Refer to Figure 6.1.If the price of a donut is $ 0.25,consumer surplus is

Marty has a collection of beer cans that he is willing to sell for $850.Someone offers him $1,000 for his collection.Calculate Marty's producer surplus.What happens to Marty's producer surplus if someone offers him $1,200 instead?

An import restriction on automobiles would lead to an increase in the price of automobiles and a decrease in consumer surplus.

The proportion of the tax burden that falls on consumers depends on

Suppose that the market equilibrium price of TVs is $250,but manufacturers are not allowed to charge more than $200 due to a government regulation.Which of the following would be a definite result of imposing a maximum price?

A maximum price below the market equilibrium price will lower the total surplus of the market.

Assume that there is rent control in Chicago.Which of the following is true?

A ban on imported avocados would result in

Tom would be willing to pay a maximum of $2,500 to attend the Super Bowl this year,and he can buy a ticket for $2,050.His consumer surplus is

If the supply of a good is relatively elastic,changing the price causes

-Figure 6.8 shows the market for taxicab services in a small town.If there is no government intervention and the supply of taxicab services reflects the law of supply,the price per mile traveled will be

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 6: Market Efficiency and Government Intervention

Assuming that the supply for a product is stable,an increase in price will lead to an increase in producer surplus.

If the government sets a maximum price for gasoline above the equilibrium price,

The deadweight loss from a taxation is

Consumer surplus can be defined as the

A minimum price set below the market equilibrium will lead to excess supply and to a drop in the total surplus of the market.

Which of the following would result from a quota imposed on the quantity of cars that can be imported into the United States?

Martha was willing to pay $200 for a new winter coat,but the current market price of coats is $150.Calculate Martha's consumer surplus.What happens to consumer surplus if the price of a coat rises to $175?

In the market equilibrium,with a price of $500 there are 2,000 apartments.If the government decides to enact a rent control policy,with a maximum price of $400,it reduces the quantity to 1,500 apartments.Due to the rent control decreasing the total surplus of the market,the policy generates a(n)

Figure 6.1 -Refer to Figure 6.1.If the price of a donut is $ 0.25,consumer surplus is

Marty has a collection of beer cans that he is willing to sell for $850.Someone offers him $1,000 for his collection.Calculate Marty's producer surplus.What happens to Marty's producer surplus if someone offers him $1,200 instead?

An import restriction on automobiles would lead to an increase in the price of automobiles and a decrease in consumer surplus.

The proportion of the tax burden that falls on consumers depends on

Suppose that the market equilibrium price of TVs is $250,but manufacturers are not allowed to charge more than $200 due to a government regulation.Which of the following would be a definite result of imposing a maximum price?

A maximum price below the market equilibrium price will lower the total surplus of the market.

Assume that there is rent control in Chicago.Which of the following is true?

A ban on imported avocados would result in

Tom would be willing to pay a maximum of $2,500 to attend the Super Bowl this year,and he can buy a ticket for $2,050.His consumer surplus is

If the supply of a good is relatively elastic,changing the price causes

-Figure 6.8 shows the market for taxicab services in a small town.If there is no government intervention and the supply of taxicab services reflects the law of supply,the price per mile traveled will be

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters