Question 1

Price gouging

Accepted Answer

A) Outlaw trade at prices above a certain price level 
B) Outlaw trade at prices below a certain price level 
C) Is an act of charging a high price to take advantage of shortages created by natural disasters 
D) None of the above 
A) Outlaw trade at prices above a certain price level 
B) Outlaw trade at prices below a certain price level 
C) Is an act of charging a high price to take advantage of shortages created by natural disasters 
D) None of the above

Question 2

A consumer values a car at $525,000 and a producer values the same car at $485,000.If the transaction is completed at $510,000,what amount of tax will result in unconsummated transaction?

Accepted Answer

A) A tax of $9,000 
B) A tax of $14,000 
C) A tax of $15,000 
D) A tax of $18,000 
A) A tax of $9,000 
B) A tax of $14,000 
C) A tax of $15,000 
D) A tax of $18,000

Question 3

A price ceiling is binding when

Accepted Answer

A) the government sets price above market equilibrium price. 
B) the equivalent of an implicit tax on producers and an implicit subsidy to consumers. 
C) the government sets price below market equilibrium price. 
D) Both b and c. 
A) the government sets price above market equilibrium price. 
B) the equivalent of an implicit tax on producers and an implicit subsidy to consumers. 
C) the government sets price below market equilibrium price. 
D) Both b and c.

Question 4

A consumer values a car at $30,000 and a producer values the same car at $20,000.If the transaction is completed at $24,000,the transaction will generate:

Accepted Answer

A) No surplus 
B) $4,000 worth of seller surplus and unknown amount of buyer surplus 
C) $6,000 worth of buyer surplus and $4,000 of seller surplus 
D) $6,000 worth of buyer surplus and unknown amount of seller surplus 
A) No surplus 
B) $4,000 worth of seller surplus and unknown amount of buyer surplus 
C) $6,000 worth of buyer surplus and $4,000 of seller surplus 
D) $6,000 worth of buyer surplus and unknown amount of seller surplus

Question 5

Taxes cause:

Accepted Answer

A) Market distortions 
B) Reduce incentives to work 
C) Decrease wealth creating transactions 
D) All of the above 
A) Market distortions 
B) Reduce incentives to work 
C) Decrease wealth creating transactions 
D) All of the above

Question 6

If you are willing to sell your lawn mower business for $355,000 and someone offers you $420,000 for it,this transaction will generate:

Accepted Answer

A) There is no surplus created 
B) $65,000 worth of seller surplus and unknown amount of buyer surplus 
C) $30,000 worth of buyer surplus and $35,000 of seller surplus 
D) $65,000 worth of buyer surplus and unknown amount of seller surplus 
A) There is no surplus created 
B) $65,000 worth of seller surplus and unknown amount of buyer surplus 
C) $30,000 worth of buyer surplus and $35,000 of seller surplus 
D) $65,000 worth of buyer surplus and unknown amount of seller surplus

Question 7

The difference between the minimum price the producer is willing to accept and the price the producer actually receives for a product is referred to as:

Accepted Answer

A) market surplus 
B) market shortage 
C) buyer surplus 
D) seller surplus. 
A) market surplus 
B) market shortage 
C) buyer surplus 
D) seller surplus.

Question 8

When the market is in equilibrium,

Accepted Answer

A) Total surplus is minimized 
B) Total surplus is maximized without government intervention 
C) Government maximizes total revenue 
D) None of the above 
A) Total surplus is minimized 
B) Total surplus is maximized without government intervention 
C) Government maximizes total revenue 
D) None of the above

Question 9

The authors feel subsidies destroy wealth because

Accepted Answer

A) subsidies move assets from lower- to higher- valued uses 
B) subsidies move assets from higher- to lower- valued uses 
C) subsidies help producers only 
D) subsidies help consumers only 
A) subsidies move assets from lower- to higher- valued uses 
B) subsidies move assets from higher- to lower- valued uses 
C) subsidies help producers only 
D) subsidies help consumers only

Question 10

Government intervention

Accepted Answer

A) provides incentives to conduct business in an illegal black market 
B) plays no role in generating wealth 
C) is the best way to eliminate poverty 
D) does not enforce property rights 
A) provides incentives to conduct business in an illegal black market 
B) plays no role in generating wealth 
C) is the best way to eliminate poverty 
D) does not enforce property rights

Question 11

A consumer values a car at $525,000 and a producer values the same car at $485,000.If the transaction is completed at $510,000,what level of tax rate will result in unconsummated transaction?

Accepted Answer

A) 1% 
B) 5% 
C) 3% 
D) 2% 
A) 1% 
B) 5% 
C) 3% 
D) 2%

Question 12

If you are willing to purchase a house for $300,000 and you purchase the house for $275,000,this transaction will generate:

Accepted Answer

A) There is no surplus created 
B) $25,000 worth of seller surplus and unknown amount of buyer surplus 
C) $10,000 worth of buyer surplus and $15,000 of seller surplus 
D) $25,000 worth of buyer surplus and unknown amount of seller surplus 
A) There is no surplus created 
B) $25,000 worth of seller surplus and unknown amount of buyer surplus 
C) $10,000 worth of buyer surplus and $15,000 of seller surplus 
D) $25,000 worth of buyer surplus and unknown amount of seller surplus

Question 13

Economic reasoning is based on the premise that:

Accepted Answer

A) all decisions or actions are costless. 
B) only non-economic decisions or actions have a cost associated with them. 
C) only economic decisions or actions have a cost associated with them. 
D) all decisions and actions have a cost associated with them. 
A) all decisions or actions are costless. 
B) only non-economic decisions or actions have a cost associated with them. 
C) only economic decisions or actions have a cost associated with them. 
D) all decisions and actions have a cost associated with them.

Question 14

A consumer values a car at $525,000 and a producer values the same car at $485,000.If sales tax is 8% and is levied on the buyer,then the buyers top dollar price is

Accepted Answer

A) $525,000 
B) $523,800 
C) $485,000 
D) $486,111 
A) $525,000 
B) $523,800 
C) $485,000 
D) $486,111

Question 15

Price ceilings cause

Accepted Answer

A) Some suppliers to drop out of the market as they cannot charge the price they were earlier charging 
B) A reduction in the quality of the product 
C) The creation of black markets 
D) All the above 
A) Some suppliers to drop out of the market as they cannot charge the price they were earlier charging 
B) A reduction in the quality of the product 
C) The creation of black markets 
D) All the above

Price gouging

A consumer values a car at $525,000 and a producer values the same car at $485,000.If the transaction is completed at $510,000,what amount of tax will result in unconsummated transaction?

A price ceiling is binding when

A consumer values a car at $30,000 and a producer values the same car at $20,000.If the transaction is completed at $24,000,the transaction will generate:

Taxes cause:

If you are willing to sell your lawn mower business for $355,000 and someone offers you $420,000 for it,this transaction will generate:

The difference between the minimum price the producer is willing to accept and the price the producer actually receives for a product is referred to as:

When the market is in equilibrium,

The authors feel subsidies destroy wealth because

Government intervention

A consumer values a car at $525,000 and a producer values the same car at $485,000.If the transaction is completed at $510,000,what level of tax rate will result in unconsummated transaction?

If you are willing to purchase a house for $300,000 and you purchase the house for $275,000,this transaction will generate:

Economic reasoning is based on the premise that:

A consumer values a car at $525,000 and a producer values the same car at $485,000.If sales tax is 8% and is levied on the buyer,then the buyers top dollar price is

Price ceilings cause

Benefits, Costs, and Decisions

Extent How Muchdecisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long-Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination Indirect Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

Exam 2: The One Lessor of Business

Price gouging

A consumer values a car at $525,000 and a producer values the same car at $485,000.If the transaction is completed at $510,000,what amount of tax will result in unconsummated transaction?

A price ceiling is binding when

A consumer values a car at $30,000 and a producer values the same car at $20,000.If the transaction is completed at $24,000,the transaction will generate:

Taxes cause:

If you are willing to sell your lawn mower business for $355,000 and someone offers you $420,000 for it,this transaction will generate:

The difference between the minimum price the producer is willing to accept and the price the producer actually receives for a product is referred to as:

When the market is in equilibrium,

The authors feel subsidies destroy wealth because

Government intervention

A consumer values a car at $525,000 and a producer values the same car at $485,000.If the transaction is completed at $510,000,what level of tax rate will result in unconsummated transaction?

If you are willing to purchase a house for $300,000 and you purchase the house for $275,000,this transaction will generate:

Economic reasoning is based on the premise that:

A consumer values a car at $525,000 and a producer values the same car at $485,000.If sales tax is 8% and is levied on the buyer,then the buyers top dollar price is

Price ceilings cause

Benefits, Costs, and Decisions

Extent How Muchdecisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long-Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination Indirect Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters