Question 1

If the demand curve in a constant cost market shifts down and to the left, then:

Accepted Answer

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

Question 2

When the value of a quota gets transferred to the original farmer, we call this:

Accepted Answer

A) the economic rent trap. 
B) the transitional gains trap. 
C) the agricultural leg hold trap. 
D) the profit trap. 
A) the economic rent trap. 
B) the transitional gains trap. 
C) the agricultural leg hold trap. 
D) the profit trap.

Question 3

When a per unit tax is imposed on an industry characterized by a perfectly inelastic supply curve:

Accepted Answer

A) producers pay the full amount of the tax. 
B) the output goes to zero. 
C) consumers and producers share the tax. 
D) consumers pay the full amount of the tax. 
A) producers pay the full amount of the tax. 
B) the output goes to zero. 
C) consumers and producers share the tax. 
D) consumers pay the full amount of the tax.

Question 4

Which of the following is true if a $2 per unit tax is levied on sellers of a good?

Accepted Answer

A) Buyers bear the brunt of the tax if the elasticity of demand is - 1.3 and the elasticity of supply is .6. 
B) The price consumers pay will increase by $2 if the elasticity of demand is 0. 
C) Buyers bear the brunt of the tax if the elasticity of demand is - .3 and the elasticity of supply is 1.6. 
D) Dead weight loss will be smaller the more elastic demand. 
A) Buyers bear the brunt of the tax if the elasticity of demand is - 1.3 and the elasticity of supply is .6. 
B) The price consumers pay will increase by $2 if the elasticity of demand is 0. 
C) Buyers bear the brunt of the tax if the elasticity of demand is - .3 and the elasticity of supply is 1.6. 
D) Dead weight loss will be smaller the more elastic demand.

Question 5

Suppose that the demand for labour is given by P = 30 - Q and the supply of labour is given by P =
2Q. Which of the following is not true if a minimum wage of 24 is imposed on the labour market?

Accepted Answer

A) the dead weight loss will be 24. 
B) the dead weight loss will be 30. 
C) labour supply will be 12. 
D) labour demand will be 6. 
A) the dead weight loss will be 24. 
B) the dead weight loss will be 30. 
C) labour supply will be 12. 
D) labour demand will be 6.

Question 6

In New Zealand most of the homes are cold in the winter:

Accepted Answer

A) because the climate leads to high marginal costs of heating. 
B) because there are few sources of heat in New Zealand. 
C) because New Zealanders do not maximize wealth. 
D) because they have lots of sheep to make wool. 
A) because the climate leads to high marginal costs of heating. 
B) because there are few sources of heat in New Zealand. 
C) because New Zealanders do not maximize wealth. 
D) because they have lots of sheep to make wool.

Question 7

Suppose that the demand for rental accommodation in Regina can be expressed as Yd = 3200- (4/3)P and supply of rental accommodation as Ys = - 3200+4P. if this is schedule and government imposes a rent ceiling of $1000 per month and the average opportunity cost of time in Regina is $24.00 per hour, approximately how long will the average person search for rental accommodation with a one year lease?

Accepted Answer

At a price of $1000 per month, Y^Sequals 8

Question 8

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 deadweight loss is:

Accepted Answer

A) $0. 
B) $0.25. 
C) $1. 
D) $0.5. 
A) $0. 
B) $0.25. 
C) $1. 
D) $0.5.

Question 9

Which of the following would not be expected effects of a binding maximum price control on downtown apartments?

Accepted Answer

A) there would be a shortage of apartments. 
B) rent would be due in advance. 
C) new developments downtown. 
D) deposits would increase. 
A) there would be a shortage of apartments. 
B) rent would be due in advance. 
C) new developments downtown. 
D) deposits would increase.

Question 10

Quantities demanded generally equal quantities supplied over time because:

Accepted Answer

A) generally we are lucky to have it work this way but it doesn't have to. 
B) most of the time we have an abundance of natural resources. 
C) prices adjust until this is so. 
D) the government directs production. 
A) generally we are lucky to have it work this way but it doesn't have to. 
B) most of the time we have an abundance of natural resources. 
C) prices adjust until this is so. 
D) the government directs production.

Question 11

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

Accepted Answer

A) both the short run and long run prices stay the same. 
B) both the short run and long run prices increase. 
C) the short run price increases and the long run price decreases. 
D) both the short run and long run prices decrease. 
A) both the short run and long run prices stay the same. 
B) both the short run and long run prices increase. 
C) the short run price increases and the long run price decreases. 
D) both the short run and long run prices decrease.

Question 12

What effect would a reduction in the Canadian selling price of Japanese made cars have on the Canadian demand for Canadian made cars?

Accepted Answer

A) The demand would increase. 
B) The demand would decrease. 
C) No effect, because price changes affect quantity demanded, not demand. 
D) We cannot tell unless we know what happened to the price of Canadian made cars. 
A) The demand would increase. 
B) The demand would decrease. 
C) No effect, because price changes affect quantity demanded, not demand. 
D) We cannot tell unless we know what happened to the price of Canadian made cars.

Question 13

A per unit tax increases the equilibrium price by:

Accepted Answer

A) zero. 
B) an amount greater than the tax. 
C) an amount less than the tax. 
D) the full amount of the tax. 
A) zero. 
B) an amount greater than the tax. 
C) an amount less than the tax. 
D) the full amount of the tax.

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 tax is shared by consumers and producers the following way:

Accepted Answer

A) 30% paid by the consumers and 70% paid by the producers. 
B) 100% paid by the producers. 
C) 100% paid by the consumers. 
D) 50% paid by the consumers and 50% paid by the producers. 
A) 30% paid by the consumers and 70% paid by the producers. 
B) 100% paid by the producers. 
C) 100% paid by the consumers. 
D) 50% paid by the consumers and 50% paid by the producers.

Question 15

Suppose that the demand for labour is given by P = 30 - Q and the Supply of labour is given by P =
2Q. If a minimum wage of 24 is imposed on the labour market, the deadweight loss is:

Accepted Answer

A) 24. 
B) 2. 
C) 6. 
D) 20. 
A) 24. 
B) 2. 
C) 6. 
D) 20.

Question 16

Demand for rice is given by P = 100 - Q and the supply of rice is given by P = Q - 20. The government imposes a guaranteed price of $60 for rice.
i)What will be the impact of this program? Specifically, what price will consumers pay, what price will sellers receive, and how much money will the government pay?
ii)What is the reduction in total surplus associated with this program relative to the efficient outcome?

Accepted Answer

i)With a guaranteed price of 60, sellers

If the demand curve in a constant cost market shifts down and to the left, then:

When the value of a quota gets transferred to the original farmer, we call this:

When a per unit tax is imposed on an industry characterized by a perfectly inelastic supply curve:

Which of the following is true if a $2 per unit tax is levied on sellers of a good?

Suppose that the demand for labour is given by P = 30 - Q and the supply of labour is given by P = 2Q. Which of the following is not true if a minimum wage of 24 is imposed on the labour market?

In New Zealand most of the homes are cold in the winter:

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 deadweight loss is:

Which of the following would not be expected effects of a binding maximum price control on downtown apartments?

Quantities demanded generally equal quantities supplied over time because:

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

What effect would a reduction in the Canadian selling price of Japanese made cars have on the Canadian demand for Canadian made cars?

A per unit tax increases the equilibrium price by:

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 tax is shared by consumers and producers the following way:

Suppose that the demand for labour is given by P = 30 - Q and the Supply of labour is given by P = 2Q. If a minimum wage of 24 is imposed on the labour market, the deadweight loss is:

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

Exam 9: Applications of the Competitive Model

If the demand curve in a constant cost market shifts down and to the left, then:

When the value of a quota gets transferred to the original farmer, we call this:

When a per unit tax is imposed on an industry characterized by a perfectly inelastic supply curve:

Which of the following is true if a $2 per unit tax is levied on sellers of a good?

Suppose that the demand for labour is given by P = 30 - Q and the supply of labour is given by P = 2Q. Which of the following is not true if a minimum wage of 24 is imposed on the labour market?

In New Zealand most of the homes are cold in the winter:

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 deadweight loss is:

Which of the following would not be expected effects of a binding maximum price control on downtown apartments?

Quantities demanded generally equal quantities supplied over time because:

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

What effect would a reduction in the Canadian selling price of Japanese made cars have on the Canadian demand for Canadian made cars?

A per unit tax increases the equilibrium price by:

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 tax is shared by consumers and producers the following way:

Suppose that the demand for labour is given by P = 30 - Q and the Supply of labour is given by P = 2Q. If a minimum wage of 24 is imposed on the labour market, the deadweight loss is:

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