Question

4. Market demand is given as QD-210-3P. Market supply is given as QS competitive equilibrium, what will be the value of consumer surplus? a. $1400 2P+50. In a perfectly b. $2166 .$3267 d. $6538 5. Orange juice and apple juice are substitutes. Suppose bad weather sharply reduced the orange harvest. What would the impact be? a increase consumer surplus in the market for orange juice but decrease producer surplus in the market for apple juice b. increase consumer surplus in the market for orange juice and increase producer surplus in the market for apple juice decrease consumer surplus in the market for orange juice but increase producer surplus in the market for apple juice d. decrease consumer surplus in the market for orange juice and decrease producer surplus in the market for apple juice 7. What is total surplus without a tax equal to? a. consumer surplus plus producer surplus b. consumer surplus minus producer surplus e. consumer surplus tax d. consumer surplus plus producer surplus, plus tax revenue minus tax revenue, plus producer surplus 8. How are the size of the tax and the deadweight loss of a tax related? a. positively related b. negatively related e. independent of each other d. equal to cach other 9. Which statement best describes a price ceiling? a. A price ceiling is a legal maximum on the price at which a good can be sold b, A price ceiling is a legal minimum on the price at which a good can be sold. c. A price ceiling occurs when the price in the market is temporarily above equilibrium. d. A price ceiling occurs when the price in the market is subsidized by the government 10. What happens if a binding price ceiling is imposed in a market? a. There will be a surplus in the market. b. The price will be legally forced toward equilibrium price. c. There will be a shortage in the market. d. Market forces will guarantee that the price will be at equilibrium. 11. When a payroll tax is enacted, what happens to the wage received by workers and the wage paid by firms? a. The wage received by workers falls and the wage paid by firms rises. b. The wage received by workers and the wage paid by firms both fall. c. The wage received by workers rises and the wage paid by firms falls d. The wage received by workers and the wage paid by firms both rise. 12. Market demand is given as OD- 150-3P. Market supply is given as QS- 2P +50. Which legally imposed price would constitute a binding price floor? a Si0 b. $20 e. Sso d. SS5 13. How is absolute advantage found? a. by comparing opportunity costs b. by calculating the dollar cost of production C. by comparing the productivity of one nation to that of another d. by first determining which country has a comparative advantage Page 2

Answer 1

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