Exam 4: Demand and Supply Applications

Refer to the information provided in Figure 4.1 below to answer the question(s) that follow. Figure 4.1 -Refer to Figure 4.1. If the United States levies no taxes on apples, the price of apples in the United States would fall to ________, and the United States would import ________.

On a graph, consumer surplus is the area above the equilibrium price and below the demand curve.

A deadweight loss occurs ________ in a market.

The government imposes a price ceiling on gasoline that is below the market price. You are asked to suggest a rationing scheme that will minimize the misallocation of resources. You suggest

Refer to the information provided in Figure 4.5 below to answer the question(s) that follow. Figure 4.5 -Refer to Figure 4.5. Assume that initially there is free trade. The quantity of CD-Rom drives supplied by U.S. firms will increase by 3 million CD-Rom drives if the United States then imposes ________ tax per CD-Rom drive on imported CD-Rom drives.

Refer to the information provided in Figure 4.6 below to answer the question(s) that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. The area of [A + B + C] represents

Refer to the information provided in Figure 4.1 below to answer the question(s) that follow. Figure 4.1 -Refer to Figure 4.1. The United States will import 2 million apples per day if a per-apple tax of ________ is levied on imported apples.

An effective price floor results in a shortage.

Refer to the information provided in Figure 4.5 below to answer the question(s) that follow. Figure 4.5 -Refer to Figure 4.5. If the United States eliminates all taxes on CD-Rom drives, which of the following would occur?

When there is underproduction in a market

Refer to the information provided in Figure 4.3 below to answer the question(s) that follow. Figure 4.3 -Refer to Figure 4.3. A nonprice rationing system such as queuing must be used to ration the available supply of pencils if the government will not allow retailers to charge more than ________ for a pencil.

The adjustment of ________ is the rationing mechanism in market economies.

If the most someone is willing to pay for ticket to see their favorite team is $100 and the market price of the ticket is $35, then this buyer will get consumer surplus of

Refer to the information provided in Figure 4.4 below to answer the question(s) that follow. Figure 4.4 -Refer to Figure 4.4. Assume that initially there is free trade. Tax revenue of $50 million per day will be generated if the United States imposes a ________ tax per barrel on imported oil.

An effective price ceiling will be set above the equilibrium price.

Refer to the information provided in Figure 4.6 below to answer the question(s) that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. If price is P1, producer surplus is area

If the government imposes a maximum price that is above the equilibrium price

Refer to the information provided in Figure 4.4 below to answer the question(s) that follow. Figure 4.4 -Refer to Figure 4.4. Assume that initially there is free trade. To reduce U.S. imports without a tax, the U.S. could

Refer to the information provided in Figure 4.1 below to answer the question(s) that follow. Figure 4.1 -Refer to Figure 4.1. Assume that initially there is free trade. If the United States then imposes a 10-cent tax per apple

The price system