Question 1

Integral calculus can be used to determine:

Accepted Answer

A)  consumer surplus but not producer surplus and deadweight loss. 
B)  producer surplus but not consumer surplus and deadweight loss. 
C)  consumer surplus and producer surplus but not deadweight loss. 
D)  consumer surplus, producer surplus, and deadweight loss. 
A)  consumer surplus but not producer surplus and deadweight loss. 
B)  producer surplus but not consumer surplus and deadweight loss. 
C)  consumer surplus and producer surplus but not deadweight loss. 
D)  consumer surplus, producer surplus, and deadweight loss.

Question 2

(Figure: Market for Good X II) The deadweight loss when providing the subsidy is ____.

Accepted Answer

A)  $2.00 
B)  $4.00 
C)  $20.00 
D)  $16.00 
A)  $2.00 
B)  $4.00 
C)  $20.00 
D)  $16.00

Question 3

Suppose that the market demand curve for residential water is given by
QD = 10 - 2.25P
and the market supply curve is given by
QS = -10 + 2.75P
where the quantity is measured in millions of gallons per month and the price is in dollars per thousand gallons.
a. Calculate the equilibrium price and quantity.
b. Calculate the consumer surplus at the equilibrium price.

Accepted Answer

a. First, solve for the equilibrium pric

Question 4

Suppose the demand and supply curves for shampoo are given by
QD = 18 - 5P
QS = -3 + 2P
where QD is the quantity of shampoo demanded (in thousands of bottles), QS is the quantity supplied, and P is the price of shampoo (in dollars per bottle).
a. Calculate the equilibrium price and quantity.
b. Calculate the consumer surplus at the equilibrium price.

Accepted Answer

a. First, solve for the equilibrium pric

Question 5

Assume that the demand for selfie sticks (a device that helps a person take their own picture) is QD = 6 - 0.5P. Supply is given as QS = P. The deadweight loss due to a quota of two sticks is $_____.

Accepted Answer

To find the deadweight loss, compare the

Question 6

(Figure: Market for Grapefruits II) If the price per bag of grapefruit increases from $6 to $8, producer surplus increases by:

Accepted Answer

A)  $130. 
B)  $50. 
C)  $90. 
D)  $40. 
A)  $130. 
B)  $50. 
C)  $90. 
D)  $40.

Question 7

The market for plywood (a sheet of wood used in construction) is characterized by the following demand and supply equations: QD = 800 - 10P and QS = 50P - 1,000, where P is the price per sheet of plywood and Q measures the quantity of plywood. What is the size of the deadweight loss if the government imposes a price ceiling of $25 per sheet of plywood?

Accepted Answer

A)  $3,750 
B)  $4,418 
C)  $6,000 
D)  $8,900 
A)  $3,750 
B)  $4,418 
C)  $6,000 
D)  $8,900

Question 8

Suppose that a local government has imposed a quota of 0.5 million gallons on water usage. Before the quota is enforced, the market demand curve is given by
QD = 10 - 2.25P
And the market supply curve is given by
QS = -10 + 2.75P
Where the quantity is measured in millions of gallons per month and the price is in dollars per thousand gallons. After the quota is imposed, the price becomes ____.

Accepted Answer

A)  $4.00 
B)  $4.22 
C)  $5.00 
D)  $5.22 
A)  $4.00 
B)  $4.22 
C)  $5.00 
D)  $5.22

Question 9

(Figure: Market for Good X II) Before the subsidy, sellers receive ____ and after the subsidy, seller receive ____.

Accepted Answer

A)  4.00; $10.00 
B)  $10.00; $4.00 
C)  $8.00; $6.00 
D)  $8.00; $10.00 
A)  4.00; $10.00 
B)  $10.00; $4.00 
C)  $8.00; $6.00 
D)  $8.00; $10.00

Question 10

(Figure: Market for Asparagus I) Suppose the government mandates a price ceiling of $3 per pound. Producer surplus decreases by:

Accepted Answer

A)  $700. 
B)  $800. 
C)  $2,500. 
D)  $300. 
A)  $700. 
B)  $800. 
C)  $2,500. 
D)  $300.

Question 11

(Figure: Market for Peanuts II) At a price floor of $750, there is an excess supply of _____ tons of peanuts.

Accepted Answer

A)  18 million 
B)  12 million 
C)  15 million 
D)  37 million 
A)  18 million 
B)  12 million 
C)  15 million 
D)  37 million

Question 12

(Figure: Market for Enplanements) From the year 2000 to 2001, the demand curve for air travel shifted inward, from D2000 to D2001. In 2000, the equilibrium price and quantity were $122.22 and 148.9 million enplanements, respectively. In 2001, the equilibrium price and quantity fell to $104.82 and 123.6 million enplanements, respectively. The loss in producer surplus attributable to the decrease in demand is equal to area:

Accepted Answer

A)  A. 
B)  A + B. 
C)  B + C. 
D)  B. 
A)  A. 
B)  A + B. 
C)  B + C. 
D)  B.

Question 13

If the government subsidizes the production of a good:

Accepted Answer

A)  deadweight loss results because not enough of the good is exchanged. 
B)  deadweight loss results because too much of the good is exchanged. 
C)  consumer surplus and producer surplus both fall. 
D)  total surplus is higher than it would have been without the subsidy. 
A)  deadweight loss results because not enough of the good is exchanged. 
B)  deadweight loss results because too much of the good is exchanged. 
C)  consumer surplus and producer surplus both fall. 
D)  total surplus is higher than it would have been without the subsidy.

Question 14

(Figure: Market for Golf I) The supply of private golf courses is Sprivate golf and the supply of private and public golf courses is Stotal. The government provision of public golf courses reduced the number of rounds per week played on private golf courses by:

Accepted Answer

A)  400. 
B)  200. 
C)  100. 
D)  50. 
A)  400. 
B)  200. 
C)  100. 
D)  50.

Question 15

Suppose that a local government has imposed a quota of 0.5 million gallons on water usage. Before the quota is enforced, the market demand curve is given by
QD = 10 - 2.25P
And the market supply curve is given by
QS = -10 + 2.75P
Where the quantity is measured in millions of gallons per month and the price is in dollars per thousand gallons. After the quota is imposed, the quantity demanded becomes ____.

Accepted Answer

A)  1,000,000 
B)  500,000 
C)  1,500,000 
D)  1,605,000 
A)  1,000,000 
B)  500,000 
C)  1,500,000 
D)  1,605,000

Question 16

Suppose the demand and supply curves for units of university credits are given by
QD = 5,000 - P
QS = -1,000 + 4P
where QD is the quantity of credits demanded, QS is the quantity supplied, and P is the price in dollars for each unit. Calculate the producer surplus at the equilibrium price.

Accepted Answer

Using some results f

Question 17

In 2007, Hawaii began providing universal health care coverage to all children, but the Hawaiian government ended the program in just 7 months. Government officials claimed that most of the children who received government coverage dropped their private insurance to become eligible for the program. As a government official stated, "People who were already able to afford healthcare began to stop paying for it so they could get it for free." In this example, Hawaii's universal health care coverage caused:

Accepted Answer

A)  crowding out. 
B)  expansion drift. 
C)  impure prevalence. 
D)  supplier-induced demand. 
A)  crowding out. 
B)  expansion drift. 
C)  impure prevalence. 
D)  supplier-induced demand.

Question 18

Suppose that a maximum price (price ceiling) is legislated. To calculate consumer surplus:

Accepted Answer

A)  integrate the area under the demand curve and above the free-market equilibrium price. 
B)  integrate the area under the demand curve and above the ceiling price between zero quantity and the free-market equilibrium quantity. 
C)  integrate the area under the demand curve and above the ceiling price between zero quantity and the quantity resulting from the price ceiling. 
D)  integrate the area under the demand curve and above the supply curve between zero quantity and the quantity resulting from the price ceiling. 
A)  integrate the area under the demand curve and above the free-market equilibrium price. 
B)  integrate the area under the demand curve and above the ceiling price between zero quantity and the free-market equilibrium quantity. 
C)  integrate the area under the demand curve and above the ceiling price between zero quantity and the quantity resulting from the price ceiling. 
D)  integrate the area under the demand curve and above the supply curve between zero quantity and the quantity resulting from the price ceiling.

Question 19

In the market for cotton, the quantity demanded and quantity supplied are expressed mathematically as QD = 400 - 250P and QS = 250P - 100, where P is the price per pound of cotton and Q measures pounds of cotton. Suppose the government sets a price ceiling of $0.50 per pound of cotton. The deadweight loss with the price ceiling is:

Accepted Answer

A)  $26.25. 
B)  $40.00. 
C)  $62.50. 
D)  $1.25. 
A)  $26.25. 
B)  $40.00. 
C)  $62.50. 
D)  $1.25.

Question 20

Suppose the demand and supply curves for units of university credits are given by
QD = 5,000 - P
QS = -1,000 + 4P
where QD is the quantity of credits demanded, QS is the quantity supplied, and P is the price charged for each unit in dollars. Suppose that the government wants to make education more accessible and, therefore, passes a regulation that says no university can charge more than $1,000 per credit. Calculate the deadweight loss associated with this price ceiling.

Accepted Answer

Rearrange the demand and suppl

Integral calculus can be used to determine:

(Figure: Market for Good X II) The deadweight loss when providing the subsidy is ____.

Assume that the demand for selfie sticks (a device that helps a person take their own picture) is Q^D = 6 - 0.5P. Supply is given as Q^S = P. The deadweight loss due to a quota of two sticks is $_____.

(Figure: Market for Grapefruits II) If the price per bag of grapefruit increases from $6 to $8, producer surplus increases by:

(Figure: Market for Good X II) Before the subsidy, sellers receive and after the subsidy, seller receive .

(Figure: Market for Asparagus I) Suppose the government mandates a price ceiling of $3 per pound. Producer surplus decreases by:

(Figure: Market for Peanuts II) At a price floor of $750, there is an excess supply of _____ tons of peanuts.

If the government subsidizes the production of a good:

(Figure: Market for Golf I) The supply of private golf courses is S_private _golf and the supply of private and public golf courses is S_total. The government provision of public golf courses reduced the number of rounds per week played on private golf courses by:

Suppose the demand and supply curves for units of university credits are given by Q^D = 5,000 - P Q^S = -1,000 + 4P where Q^D is the quantity of credits demanded, Q^S is the quantity supplied, and P is the price in dollars for each unit. Calculate the producer surplus at the equilibrium price.

Suppose that a maximum price (price ceiling) is legislated. To calculate consumer surplus:

Adventures in Microeconomics

Supply and Demand

Consumer Behavior

Individual and Market Demand

Producer Behavior

Costs

Supply in a Competitive Market

Market Power and Monopoly

Market Power and Pricing Strategies

Imperfect Competition

Game Theory

Factor Markets

Investment, Time, and Insurance

General Equilibrium

Asymmetric Information

Externalities and Public Goods

Behavioral and Experimental Economics

Filters

Exam 3: Using Supply and Demand to Analyze Markets

Integral calculus can be used to determine:

(Figure: Market for Good X II) The deadweight loss when providing the subsidy is ____.

Assume that the demand for selfie sticks (a device that helps a person take their own picture) is QD = 6 - 0.5P. Supply is given as QS = P. The deadweight loss due to a quota of two sticks is $_____.

(Figure: Market for Grapefruits II) If the price per bag of grapefruit increases from $6 to $8, producer surplus increases by:

(Figure: Market for Good X II) Before the subsidy, sellers receive ____ and after the subsidy, seller receive ____.

(Figure: Market for Asparagus I) Suppose the government mandates a price ceiling of $3 per pound. Producer surplus decreases by:

(Figure: Market for Peanuts II) At a price floor of $750, there is an excess supply of _____ tons of peanuts.

If the government subsidizes the production of a good:

(Figure: Market for Golf I) The supply of private golf courses is Sprivate golf and the supply of private and public golf courses is Stotal. The government provision of public golf courses reduced the number of rounds per week played on private golf courses by:

Suppose the demand and supply curves for units of university credits are given by QD = 5,000 - P QS = -1,000 + 4P where QD is the quantity of credits demanded, QS is the quantity supplied, and P is the price in dollars for each unit. Calculate the producer surplus at the equilibrium price.

Suppose that a maximum price (price ceiling) is legislated. To calculate consumer surplus:

Adventures in Microeconomics

Supply and Demand

Consumer Behavior

Individual and Market Demand

Producer Behavior

Costs

Supply in a Competitive Market

Market Power and Monopoly

Market Power and Pricing Strategies

Imperfect Competition

Game Theory

Factor Markets

Investment, Time, and Insurance

General Equilibrium

Asymmetric Information

Externalities and Public Goods

Behavioral and Experimental Economics

Filters

Assume that the demand for selfie sticks (a device that helps a person take their own picture) is Q^D = 6 - 0.5P. Supply is given as Q^S = P. The deadweight loss due to a quota of two sticks is $_____.

(Figure: Market for Good X II) Before the subsidy, sellers receive and after the subsidy, seller receive .

(Figure: Market for Golf I) The supply of private golf courses is S_private _golf and the supply of private and public golf courses is S_total. The government provision of public golf courses reduced the number of rounds per week played on private golf courses by:

Suppose the demand and supply curves for units of university credits are given by Q^D = 5,000 - P Q^S = -1,000 + 4P where Q^D is the quantity of credits demanded, Q^S is the quantity supplied, and P is the price in dollars for each unit. Calculate the producer surplus at the equilibrium price.