Question 1

A per unit tax usually:

Accepted Answer

A) decreases the equilibrium price. 
B) does not effect the equilibrium price. 
C) increases supply. 
D) increases the equilibrium price. 
A) decreases the equilibrium price. 
B) does not effect the equilibrium price. 
C) increases supply. 
D) increases the equilibrium price. D

Question 2

Quotas are:

Accepted Answer

A) bad for everyone. 
B) bad for the producers and consumers. 
C) good to the producers and consumers. 
D) good for some producers and bad for consumers. 
A) bad for everyone. 
B) bad for the producers and consumers. 
C) good to the producers and consumers. 
D) good for some producers and bad for consumers. D

Question 3

If the demand curve in a decreasing cost market shifts up and to the right, then:

Accepted Answer

A) the long run price decreases and the long run quantity increases. 
B) the long run price and quantity increase. 
C) the long run price stays the same and the long run quantity increases. 
D) the long run price and quantity decrease. 
A) the long run price decreases and the long run quantity increases. 
B) the long run price and quantity increase. 
C) the long run price stays the same and the long run quantity increases. 
D) the long run price and quantity decrease. A

Question 4

A $5 per unit tax on a good is borne by the buyer:

Accepted Answer

A) if the demand is perfectly elastic. 
B) if it is a sales tax. 
C) if the supply is perfectly elastic. 
D) if it is an excise tax. 
A) if the demand is perfectly elastic. 
B) if it is a sales tax. 
C) if the supply is perfectly elastic. 
D) if it is an excise tax.

Question 5

One reason that the predictions of the Club of Rome have not come to fruition is because

Accepted Answer

A) resources are more plentiful than first believed 
B) prices are exogenous 
C) demand curves become more elastic over time 
D) conscientious consumers reduce reuse and recycle 
A) resources are more plentiful than first believed 
B) prices are exogenous 
C) demand curves become more elastic over time 
D) conscientious consumers reduce reuse and recycle

Question 6

When a per unit tax is imposed on an industry where the supply curve is perfectly elastic:

Accepted Answer

A) consumers and producers share the tax. 
B) consumers pay the full amount of the tax. 
C) innovation is discouraged in that industry. 
D) producers pay the full amount of the tax. 
A) consumers and producers share the tax. 
B) consumers pay the full amount of the tax. 
C) innovation is discouraged in that industry. 
D) producers pay the full amount of the tax.

Question 7

The market demand for cars is P = 1000 - Q and the supply is P = 100 + 2Q. If the regulators impose a quota of 400 units the unit price is:

Accepted Answer

A) 750. 
B) 800. 
C) 600. 
D) 700. 
A) 750. 
B) 800. 
C) 600. 
D) 700.

Question 8

In order to reduce pollution a country has decided to introduce a tax of $4 per ton of fertilizer. The economic advisors of the country estimate the supply and demand curves for fertilizers as: S=210+75PS and D=560- 25PD where D represents the daily demand in tons for fertilizers and pD is the price of one ton of fertilizers paid by the consumer. S represents the daily supply in tons for fertilizers and pS is the price actually received by the supplier.
a)What are the pre- tax equilibrium quantities and prices?
b)It has been decided that the tax revenue will be collected from the store selling fertilizers, so that the price advertised to the consumer include the tax. Show graphically the effect of this tax on the market equilibrium quantity and price. Calculate the post- tax equilibrium quantity and prices.
c)What is the tax revenue earned by the government? What is the deadweight loss in surplus brought about by the tax? What proportion of the tax will be borne by the consumer?

Accepted Answer

a)Q=472.5; P=3.5;
b)Q=397.5; P=2.5;
c)Th

Question 9

Suppose a market is in equilibrium. If the price of a substitute for the good decreases, which of the following would occur?

Accepted Answer

A) P increases and Q decreases 
B) P decreases and Q increases 
C) P decreases and Q decreases 
D) P increases and Q increases 
A) P increases and Q decreases 
B) P decreases and Q increases 
C) P decreases and Q decreases 
D) P increases and Q increases

Question 10

Increases in demand lead to:

Accepted Answer

A) shifts in the supply curve to the right. 
B) movements along the supply curve to the right. 
C) no change in quantity supplied. 
D) shifts in the supply curve to the left. 
A) shifts in the supply curve to the right. 
B) movements along the supply curve to the right. 
C) no change in quantity supplied. 
D) shifts in the supply curve to the left.

Question 11

Suppose the market demand for cigarettes is: D=10- P, and the supply of cigarettes is: S=- 2+P, where P is the price per pack of cigarettes. If the government imposes a cigarette tax of $1 per pack, the government revenue from the tax is:

Accepted Answer

A) $1.5. 
B) $1.75. 
C) $1. 
D) $3.5. 
A) $1.5. 
B) $1.75. 
C) $1. 
D) $3.5.

Question 12

If the demand curve shifts down and to the left in an increasing cost market, then:

Accepted Answer

A) the long run price stays the same and the long run quantity increases. 
B) the long run price decreases and the long run quantity stays the same. 
C) the long run price and quantity increase. 
D) the long run price and quantity decrease. 
A) the long run price stays the same and the long run quantity increases. 
B) the long run price decreases and the long run quantity stays the same. 
C) the long run price and quantity increase. 
D) the long run price and quantity decrease.

Question 13

An effective quota reduces the quantity supplied and raises the price to consumers.

Accepted Answer

A) True 
 B)False

Question 14

Suppose the market demand for cigarettes is: D=10- P, and the supply of cigarettes is: S=- 2+P, where P is the price per pack of cigarettes. If the government imposes a cigarette tax of $1 per pack, the price paid by consumers is larger than the price faced by suppliers.

Accepted Answer

A) $6.5. 
B) $5. 
C) $1. 
D) $6. 
A) $6.5. 
B) $5. 
C) $1. 
D) $6.

Question 15

A decrease in the supply of a good will cause a larger increase in its price:

Accepted Answer

A) the more elastic the demand for that good. 
B) the greater the scarcity of that good. 
C) if there are many close substitutes for that good. 
D) the more inelastic the demand for that good. 
A) the more elastic the demand for that good. 
B) the greater the scarcity of that good. 
C) if there are many close substitutes for that good. 
D) the more inelastic the demand for that good.

Question 16

An excise tax on consumers:

Accepted Answer

A) generates less tax revenue than taxing producers. 
B) has exactly the same effect as taxing producers. 
C) generates more tax revenue than taxing producers. 
D) causes the supply curve to shift up and to the left. 
A) generates less tax revenue than taxing producers. 
B) has exactly the same effect as taxing producers. 
C) generates more tax revenue than taxing producers. 
D) causes the supply curve to shift up and to the left.

Question 17

A tax on an industry with a perfectly inelastic supply curve will generate a dead weight loss:

Accepted Answer

A) lower than the consumer's surplus. 
B) equal to zero. 
C) equal to the sum of consumer surplus and producer surplus. 
D) greater than the consumer's surplus. 
A) lower than the consumer's surplus. 
B) equal to zero. 
C) equal to the sum of consumer surplus and producer surplus. 
D) greater than the consumer's surplus.

Question 18

Rent control does not lead to:

Accepted Answer

A) lower rents for new tenants. 
B) new apartments being made available. 
C) improvements in housing capital. 
D) lower rents for everyone. 
A) lower rents for new tenants. 
B) new apartments being made available. 
C) improvements in housing capital. 
D) lower rents for everyone.

Question 19

Suppose that the domestic demand for bottled water can be expressed as Q = 200 - 4P and the domestic supply can be expressed as Q = 16P. If the world price of bottled water is $5, would domestic bottled water producers prefer a $3 per unit tariff on imported bottled water or an import quota of 40 units?

Accepted Answer

With an import quota, the new domestic p

Question 20

One reason that the predictions of the Club of Rome have not come to fruition is because

Accepted Answer

A) prices are not exogenous 
B) global economic growth has slowed 
C) resources are more plentiful than first believed 
D) conscientious consumers reduce reuse and recycle 
A) prices are not exogenous 
B) global economic growth has slowed 
C) resources are more plentiful than first believed 
D) conscientious consumers reduce reuse and recycle

A per unit tax usually:

Quotas are:

If the demand curve in a decreasing cost market shifts up and to the right, then:

A $5 per unit tax on a good is borne by the buyer:

One reason that the predictions of the Club of Rome have not come to fruition is because

When a per unit tax is imposed on an industry where the supply curve is perfectly elastic:

The market demand for cars is P = 1000 - Q and the supply is P = 100 + 2Q. If the regulators impose a quota of 400 units the unit price is:

Suppose a market is in equilibrium. If the price of a substitute for the good decreases, which of the following would occur?

Increases in demand lead to:

Suppose the market demand for cigarettes is: D=10- P, and the supply of cigarettes is: S=- 2+P, where P is the price per pack of cigarettes. If the government imposes a cigarette tax of $1 per pack, the government revenue from the tax is:

If the demand curve shifts down and to the left in an increasing cost market, then:

An effective quota reduces the quantity supplied and raises the price to consumers.

Suppose the market demand for cigarettes is: D=10- P, and the supply of cigarettes is: S=- 2+P, where P is the price per pack of cigarettes. If the government imposes a cigarette tax of $1 per pack, the price paid by consumers is larger than the price faced by suppliers.

A decrease in the supply of a good will cause a larger increase in its price:

An excise tax on consumers:

A tax on an industry with a perfectly inelastic supply curve will generate a dead weight loss:

Rent control does not lead to:

One reason that the predictions of the Club of Rome have not come to fruition is because

Microeconomics: a Working Methodology

A Theory of Preferences

Demand Theory

More Demand Theory

Intertemporal Decision Making and Capital Values

Production Cost: One Variable Input

Production Cost: Many Variable Inputs

The Theory of Perfect Competition

Monopoly

Input Markets and the Allocation of Resources

Labour Market Applications

Competitive General Equilibrium

Price Discrimination Monopoly Practices

Introduction to Game Theory

Game Theory and Oligopoly

Choice Making Under Uncertainty

Assymmetric Information, the Rules of the Game, and Externalities

The Theory of the Firm

Assymetric Information and Market Behaviour

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Exam 9: Applications of the Competitive Model

A per unit tax usually:

Quotas are:

If the demand curve in a decreasing cost market shifts up and to the right, then:

A $5 per unit tax on a good is borne by the buyer:

One reason that the predictions of the Club of Rome have not come to fruition is because

When a per unit tax is imposed on an industry where the supply curve is perfectly elastic:

The market demand for cars is P = 1000 - Q and the supply is P = 100 + 2Q. If the regulators impose a quota of 400 units the unit price is:

Suppose a market is in equilibrium. If the price of a substitute for the good decreases, which of the following would occur?

Increases in demand lead to:

Suppose the market demand for cigarettes is: D=10- P, and the supply of cigarettes is: S=- 2+P, where P is the price per pack of cigarettes. If the government imposes a cigarette tax of $1 per pack, the government revenue from the tax is:

If the demand curve shifts down and to the left in an increasing cost market, then:

An effective quota reduces the quantity supplied and raises the price to consumers.

Suppose the market demand for cigarettes is: D=10- P, and the supply of cigarettes is: S=- 2+P, where P is the price per pack of cigarettes. If the government imposes a cigarette tax of $1 per pack, the price paid by consumers is larger than the price faced by suppliers.

A decrease in the supply of a good will cause a larger increase in its price:

An excise tax on consumers:

A tax on an industry with a perfectly inelastic supply curve will generate a dead weight loss:

Rent control does not lead to:

One reason that the predictions of the Club of Rome have not come to fruition is because

Microeconomics: a Working Methodology

A Theory of Preferences

Demand Theory

More Demand Theory

Intertemporal Decision Making and Capital Values

Production Cost: One Variable Input

Production Cost: Many Variable Inputs

The Theory of Perfect Competition

Monopoly

Input Markets and the Allocation of Resources

Labour Market Applications

Competitive General Equilibrium

Price Discrimination Monopoly Practices

Introduction to Game Theory

Game Theory and Oligopoly

Choice Making Under Uncertainty

Assymmetric Information, the Rules of the Game, and Externalities

The Theory of the Firm

Assymetric Information and Market Behaviour

Filters