Question 1

Quotas that limit the quantity of imports of a foreign good provide an incentive for foreign suppliers to:
I.Provide higher quality goods.
II.Seek more open markets elsewhere.
III.Lower prices to be more competitive.
IV.Stop all trade with the country imposing the quotas.
Which of the above statements are true?

Accepted Answer

A)  I and II. 
B)  I and III. 
C)  II and IV. 
D)  III only.

Question 2

Suppose a chemical company is in a perfectly competitive industry and has a short run total cost curve of TC =  q3 + 5q2 + 10q + 10 and a short run marginal cost of SMC = q2 + 10q + 10.At the price of 385,how many will be produced?

Accepted Answer

A)  0 
B)  3 
C)  5 
D)  15

Question 3

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the amount consumers pay producers?

Accepted Answer

A)  60 
B)  2400 
C)  3600 
D)  6400

Question 4

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by QD = 1050 - 50P,how much will be produced in the market?

Accepted Answer

A)  300 
B)  400 
C)  500 
D)  600

Question 5

The short-run market supply curve is

Accepted Answer

A)  the horizontal summation of each firm's short-run supply curve. 
B)  the vertical summation of each firm's short-run supply curve. 
C)  the horizontal summation of each firm's short-run average cost curve. 
D)  the vertical summation of each firm's short-run average cost curve.

Question 6

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.Suppose that a nationwide quota (of 20)is enforced so that more can be used in a war effort.What is the price?

Accepted Answer

A)  20 
B)  40 
C)  60 
D)  80

Question 7

Suppose domestic beef producers face demand of QD = 1000 - 5P.Suppose the Chinese acquire a taste for U.S.beef such that their demand is QD = 500 - 5P.Market demand is now

Accepted Answer

A)  1000 - 10P for all P 
B)  1500 - 10P for all P 
C)  1500 - 5P for all P 
D)  1000 - 5P for P > 100 and 1500 - 10P for P < 100

Question 8

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.The market supply curve is

Accepted Answer

A)  QS = -50 + 50P 
B)  QS = -  +  P 
C)  QS = -100 + 100P 
D)  QS = -50 + 50P2

Question 9

If the market for hula-hoops is characterized by a very inelastic supply curve and a very elastic demand curve,an inward shift in the supply curve would be reflected primarily in the form of

Accepted Answer

A)  higher prices. 
B)  higher output. 
C)  lower prices. 
D)  lower output.

Question 10

The infant industry case for tariff protection assumes that the protected industry is

Accepted Answer

A)  a decreasing cost industry. 
B)  an increasing cost industry. 
C)  a constant cost industry. 
D)  the producer of a new product.

Question 11

Suppose domestic beef producers face demand of QD = 1000 - 5P.In the very short run 500 head of beef are produced.Suppose mad cow strikes a portion of the national herd and the amount brought to market falls to 400.The price per head will rise by

Accepted Answer

A)  10 
B)  20 
C)  30 
D)  50

Question 12

In the opening of free trade,if world prices of a good are less than domestic prices of that same good,

Accepted Answer

A)  domestic consumers will experience a loss of surplus. 
B)  domestic prices will drop to the world price level. 
C)  all domestic producers of that good will try to find another market because they can't compete with foreign producers. 
D)  domestic producers will increase the quantity supplied in order to crowd out the foreign-produced good.

Question 13

Positive economic profits exist for a firm in the long run if price is above

Accepted Answer

A)  long-run average cost. 
B)  long-run marginal cost. 
C)  long-run total cost. 
D)  long-run variable cost.

Question 14

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by QD = 1050 - 50P,profit to the firm will be

Accepted Answer

A)  5 
B)  6 
C)  9 
D)  15

Question 15

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by QD = 1050 - 50P,total revenue to each firm will be

Accepted Answer

A)  15 
B)  40 
C)  55 
D)  300

Question 16

If the market for bottled spring water is characterized by a very elastic supply curve and a very inelastic demand curve,an outward shift in the supply curve would be reflected primarily in the form of

Accepted Answer

A)  higher prices. 
B)  higher output. 
C)  lower prices. 
D)  lower output.

Question 17

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by QD = 1050 - 50P,total cost to the firm will be

Accepted Answer

A)  22 
B)  30 
C)  40 
D)  52

Question 18

In the short run,an increase in market demand will usually lead to a(n)

Accepted Answer

A)  decrease in price and an increase in quantity. 
B)  decrease in price and a decrease in quantity. 
C)  increase in price and an increase in quantity. 
D)  increase in price and a decrease in quantity.

Question 19

A deadweight loss of consumer and/or producer surplus occurs when

Accepted Answer

A)  producers fail to maximize profits. 
B)  mutually beneficial transactions cannot be completed. 
C)  consumers do not maximize their utility. 
D)  the price of inputs increases.

Question 20

"Missing markets" result from

Accepted Answer

A)  high transactions costs of such markets. 
B)  strict price controls. 
C)  the inability of producers to gain economies of scale. 
D)  foreign countries dominating a domestic market for a product.

Exam 9: Perfect Competition in a Single Market

Suppose a chemical company is in a perfectly competitive industry and has a short run total cost curve of TC = q³ + 5q² + 10q + 10 and a short run marginal cost of SMC = q² + 10q + 10.At the price of 385,how many will be produced?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the amount consumers pay producers?

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,how much will be produced in the market?

The short-run market supply curve is

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.Suppose that a nationwide quota (of 20) is enforced so that more can be used in a war effort.What is the price?

Suppose domestic beef producers face demand of Q_D = 1000 - 5P.Suppose the Chinese acquire a taste for U.S.beef such that their demand is Q_D = 500 - 5P.Market demand is now

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.The market supply curve is

If the market for hula-hoops is characterized by a very inelastic supply curve and a very elastic demand curve,an inward shift in the supply curve would be reflected primarily in the form of

The infant industry case for tariff protection assumes that the protected industry is

Suppose domestic beef producers face demand of Q_D = 1000 - 5P.In the very short run 500 head of beef are produced.Suppose mad cow strikes a portion of the national herd and the amount brought to market falls to 400.The price per head will rise by

In the opening of free trade,if world prices of a good are less than domestic prices of that same good,

Positive economic profits exist for a firm in the long run if price is above

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,profit to the firm will be

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,total revenue to each firm will be

If the market for bottled spring water is characterized by a very elastic supply curve and a very inelastic demand curve,an outward shift in the supply curve would be reflected primarily in the form of

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,total cost to the firm will be

In the short run,an increase in market demand will usually lead to a(n)

A deadweight loss of consumer and/or producer surplus occurs when

"Missing markets" result from

Exam 9: Perfect Competition in a Single Market

Suppose a chemical company is in a perfectly competitive industry and has a short run total cost curve of TC = q3 + 5q2 + 10q + 10 and a short run marginal cost of SMC = q2 + 10q + 10.At the price of 385,how many will be produced?

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the amount consumers pay producers?

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by QD = 1050 - 50P,how much will be produced in the market?

The short-run market supply curve is

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.Suppose that a nationwide quota (of 20) is enforced so that more can be used in a war effort.What is the price?

Suppose domestic beef producers face demand of QD = 1000 - 5P.Suppose the Chinese acquire a taste for U.S.beef such that their demand is QD = 500 - 5P.Market demand is now

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.The market supply curve is

If the market for hula-hoops is characterized by a very inelastic supply curve and a very elastic demand curve,an inward shift in the supply curve would be reflected primarily in the form of

The infant industry case for tariff protection assumes that the protected industry is

Suppose domestic beef producers face demand of QD = 1000 - 5P.In the very short run 500 head of beef are produced.Suppose mad cow strikes a portion of the national herd and the amount brought to market falls to 400.The price per head will rise by

In the opening of free trade,if world prices of a good are less than domestic prices of that same good,

Positive economic profits exist for a firm in the long run if price is above

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by QD = 1050 - 50P,profit to the firm will be

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by QD = 1050 - 50P,total revenue to each firm will be

If the market for bottled spring water is characterized by a very elastic supply curve and a very inelastic demand curve,an outward shift in the supply curve would be reflected primarily in the form of

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by QD = 1050 - 50P,total cost to the firm will be

In the short run,an increase in market demand will usually lead to a(n)

A deadweight loss of consumer and/or producer surplus occurs when

"Missing markets" result from

Suppose a chemical company is in a perfectly competitive industry and has a short run total cost curve of TC = q³ + 5q² + 10q + 10 and a short run marginal cost of SMC = q² + 10q + 10.At the price of 385,how many will be produced?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the amount consumers pay producers?

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,how much will be produced in the market?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.Suppose that a nationwide quota (of 20) is enforced so that more can be used in a war effort.What is the price?

Suppose domestic beef producers face demand of Q_D = 1000 - 5P.Suppose the Chinese acquire a taste for U.S.beef such that their demand is Q_D = 500 - 5P.Market demand is now

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.The market supply curve is

Suppose domestic beef producers face demand of Q_D = 1000 - 5P.In the very short run 500 head of beef are produced.Suppose mad cow strikes a portion of the national herd and the amount brought to market falls to 400.The price per head will rise by

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,profit to the firm will be

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,total revenue to each firm will be

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,total cost to the firm will be