Question 1

In the short run,specific taxes on a firm result in

Accepted Answer

A)  price increases that may not persist in the long run. 
B)  an increase in consumer surplus because the tax permits spending in additional government services. 
C)  shortages of the good being taxed. 
D)  an increase in producer surplus because of the rise in price. 
A)  price increases that may not persist in the long run. 
B)  an increase in consumer surplus because the tax permits spending in additional government services. 
C)  shortages of the good being taxed. 
D)  an increase in producer surplus because of the rise in price. A

Question 2

Who benefit(s)from protectionism?

Accepted Answer

A)  Consumers 
B)  Domestic producers 
C)  No one 
D)  Both consumers and domestic producers. 
A)  Consumers 
B)  Domestic producers 
C)  No one 
D)  Both consumers and domestic producers. B

Question 3

In the short run,the incidence of a sales tax is

Accepted Answer

A)  wholly absorbed by the producer. 
B)  shared between the consumer and the producer. 
C)  deferred until the market is able to re-establish an equilibrium price. 
D)  wholly absorbed by the consumer. 
A)  wholly absorbed by the producer. 
B)  shared between the consumer and the producer. 
C)  deferred until the market is able to re-establish an equilibrium price. 
D)  wholly absorbed by the consumer. B

Question 4

Firms in long-run equilibrium in a perfectly competitive industry will produce at the low points of their average total cost curves because

Accepted Answer

A)  free entry implies that long-run profits will be zero no matter how much each firm produces. 
B)  firms seek maximum profits and to do so they must choose to produce where average costs are minimized. 
C)  firms maximize profits and free entry implies that maximum profits will be zero. 
D)  firms in the industry desire to operate efficiently. 
A)  free entry implies that long-run profits will be zero no matter how much each firm produces. 
B)  firms seek maximum profits and to do so they must choose to produce where average costs are minimized. 
C)  firms maximize profits and free entry implies that maximum profits will be zero. 
D)  firms in the industry desire to operate efficiently.

Question 5

In the short run

Accepted Answer

A)  new firms may enter an industry. 
B)  existing firms may change the quantity they are supplying. 
C)  price and quantity supplied are absolutely fixed. 
D)  quantity supplied is absolutely fixed. 
A)  new firms may enter an industry. 
B)  existing firms may change the quantity they are supplying. 
C)  price and quantity supplied are absolutely fixed. 
D)  quantity supplied is absolutely fixed.

Question 6

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the value consumers place on the amount of the good they consume?

Accepted Answer

A)  60 
B)  2400 
C)  2800 
D)  3200 
A)  60 
B)  2400 
C)  2800 
D)  3200

Question 7

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by QD = 1050 - 50P,what is the equilibrium price?

Accepted Answer

A)  5 
B)  10 
C)  11 
D)  50 
A)  5 
B)  10 
C)  11 
D)  50

Question 8

Under perfect competition,if an industry is characterized by positive economic profits in the short run

Accepted Answer

A)  firms will leave the market in the long run and the short-run supply curve will shift outward. 
B)  firms will enter the market in the long run and the short-run supply curve will shift outward. 
C)  firms will enter the market in the long run and the short-run supply curve will shift inward. 
D)  firms will leave the market in the long run and the short-run supply curve will shift inward. 
A)  firms will leave the market in the long run and the short-run supply curve will shift outward. 
B)  firms will enter the market in the long run and the short-run supply curve will shift outward. 
C)  firms will enter the market in the long run and the short-run supply curve will shift inward. 
D)  firms will leave the market in the long run and the short-run supply curve will shift inward.

Question 9

In the very short run

Accepted Answer

A)  new firms may enter the industry. 
B)  existing firms may change the quantity they are supplying. 
C)  price and quantity supplied is absolutely fixed. 
D)  quantity supplied is absolutely fixed. 
A)  new firms may enter the industry. 
B)  existing firms may change the quantity they are supplying. 
C)  price and quantity supplied is absolutely fixed. 
D)  quantity supplied is absolutely fixed.

Question 10

If a 1 percent increase in price leads to a .7 percent increase in quantity supplied,the short-run supply curve is

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  unit elastic. 
D)  perfectly inelastic. 
A)  elastic. 
B)  inelastic. 
C)  unit elastic. 
D)  perfectly inelastic.

Question 11

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by QD = 1050 - 50P,how much will the individual firm produce?

Accepted Answer

A)  3 
B)  4 
C)  5 
D)  6 
A)  3 
B)  4 
C)  5 
D)  6

Question 12

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.The supply curve for each firm is

Accepted Answer

A)  P = 2q + 1 
B)  P = q2 + q + 10 
C)  P = q + 1 +   
D)  P = q + 1 
A)  P = 2q + 1 
B)  P = q2 + q + 10 
C)  P = q + 1 +   
D)  P = q + 1

Question 13

For an increasing cost industry,the long-run supply curve has a(n)elasticity of supply

Accepted Answer

A)  infinite. 
B)  negative. 
C)  positive. 
D)  zero. 
A)  infinite. 
B)  negative. 
C)  positive. 
D)  zero.

Question 14

Suppose a chemical company is in a perfectly competitive industry and has a short run total cost curve of TC =   q3 + 5q2 + 10q + 10 and a short run marginal cost of SMC = q2 + 10q + 10.At the price of 49,how many will be produced?

Accepted Answer

A)  0 
B)  3 
C)  5 
D)  15 
A)  0 
B)  3 
C)  5 
D)  15

Question 15

One example of Ricardian rent is

Accepted Answer

A)  rent paid to landlords under price controls. 
B)  the difference between the price of a highly demanded unique piece of artwork and the opportunity cost of maintaining it. 
C)  the amount paid to a seller above the equilibrium price of tourist class tickets in order to receive higher quality seats in first class. 
D)  the price rise of wool from a disease among sheep. 
A)  rent paid to landlords under price controls. 
B)  the difference between the price of a highly demanded unique piece of artwork and the opportunity cost of maintaining it. 
C)  the amount paid to a seller above the equilibrium price of tourist class tickets in order to receive higher quality seats in first class. 
D)  the price rise of wool from a disease among sheep.

Question 16

The excess burden of a tax is

Accepted Answer

A)  the amount by which the price of a good increases. 
B)  the loss of consumer and producer surplus that is not transferred elsewhere. 
C)  The amount by which a person's after-tax income decreases as a result of the new tax. 
D)  the welfare costs to firms forced to leave the market due to an inward shift of the demand curve. 
A)  the amount by which the price of a good increases. 
B)  the loss of consumer and producer surplus that is not transferred elsewhere. 
C)  The amount by which a person's after-tax income decreases as a result of the new tax. 
D)  the welfare costs to firms forced to leave the market due to an inward shift of the demand curve.

Question 17

A demand curve will shift out for any of the following reasons except

Accepted Answer

A)  preference for a good increases. 
B)  price of a substitute falls. 
C)  income rises. 
D)  price of a complement falls. 
A)  preference for a good increases. 
B)  price of a substitute falls. 
C)  income rises. 
D)  price of a complement falls.

Question 18

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the equilibrium quantity?

Accepted Answer

A)  20 
B)  40 
C)  60 
D)  80 
A)  20 
B)  40 
C)  60 
D)  80

Question 19

Suppose that the price elasticity of demand for a product is -1 and that the price elasticity of supply is +1.Assume also that the income elasticity of demand is +2.Then an increase in income of 10% will raise equilibrium price by

Accepted Answer

A)  10%. 
B)  5%. 
C)  20%. 
D)  an annual amount that cannot be determined. 
A)  10%. 
B)  5%. 
C)  20%. 
D)  an annual amount that cannot be determined.

Question 20

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the equilibrium price?

Accepted Answer

A)  20 
B)  40 
C)  60 
D)  80 
A)  20 
B)  40 
C)  60 
D)  80

In the short run,specific taxes on a firm result in

Who benefit(s)from protectionism?

In the short run,the incidence of a sales tax is

Firms in long-run equilibrium in a perfectly competitive industry will produce at the low points of their average total cost curves because

In the short run

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the value consumers place on the amount of the good they consume?

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,what is the equilibrium price?

Under perfect competition,if an industry is characterized by positive economic profits in the short run

In the very short run

If a 1 percent increase in price leads to a .7 percent increase in quantity supplied,the short-run supply curve is

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,how much will the individual firm produce?

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.The supply curve for each firm is

For an increasing cost industry,the long-run supply curve has a(n)elasticity of supply

Suppose a chemical company is in a perfectly competitive industry and has a short run total cost curve of TC = q³ + 5q² + 10q + 10 and a short run marginal cost of SMC = q² + 10q + 10.At the price of 49,how many will be produced?

One example of Ricardian rent is

The excess burden of a tax is

A demand curve will shift out for any of the following reasons except

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the equilibrium quantity?

Suppose that the price elasticity of demand for a product is -1 and that the price elasticity of supply is +1.Assume also that the income elasticity of demand is +2.Then an increase in income of 10% will raise equilibrium price by

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the equilibrium price?

Economic Models

Utility and Choice

Individual Demand Curves

Uncertainty

Game Theory

Production

Costs

Profit Maximization and Supply

General Equilibrium and Welfare

Monopoly

Imperfect Competition

Pricing in Input Markets

Capital and Time

Asymmetric Information

Externalities and Public Goods

Behavioral Economics

Filters

Exam 9: Perfect Competition in a Single Market

In the short run,specific taxes on a firm result in

Who benefit(s)from protectionism?

In the short run,the incidence of a sales tax is

Firms in long-run equilibrium in a perfectly competitive industry will produce at the low points of their average total cost curves because

In the short run

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the value consumers place on the amount of the good they consume?

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by QD = 1050 - 50P,what is the equilibrium price?

Under perfect competition,if an industry is characterized by positive economic profits in the short run

In the very short run

If a 1 percent increase in price leads to a .7 percent increase in quantity supplied,the short-run supply curve is

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by QD = 1050 - 50P,how much will the individual firm produce?

Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10,so that marginal cost is MC = 2q +1.The supply curve for each firm is

For an increasing cost industry,the long-run supply curve has a(n)elasticity of supply

Suppose a chemical company is in a perfectly competitive industry and has a short run total cost curve of TC = q3 + 5q2 + 10q + 10 and a short run marginal cost of SMC = q2 + 10q + 10.At the price of 49,how many will be produced?

One example of Ricardian rent is

The excess burden of a tax is

A demand curve will shift out for any of the following reasons except

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the equilibrium quantity?

Suppose that the price elasticity of demand for a product is -1 and that the price elasticity of supply is +1.Assume also that the income elasticity of demand is +2.Then an increase in income of 10% will raise equilibrium price by

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the equilibrium price?

Economic Models

Utility and Choice

Individual Demand Curves

Uncertainty

Game Theory

Production

Costs

Profit Maximization and Supply

General Equilibrium and Welfare

Monopoly

Imperfect Competition

Pricing in Input Markets

Capital and Time

Asymmetric Information

Externalities and Public Goods

Behavioral Economics

Filters

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the value consumers place on the amount of the good they consume?

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,what is the equilibrium price?

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,how much will the individual firm produce?

Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.The supply curve for each firm is

Suppose a chemical company is in a perfectly competitive industry and has a short run total cost curve of TC = q³ + 5q² + 10q + 10 and a short run marginal cost of SMC = q² + 10q + 10.At the price of 49,how many will be produced?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the equilibrium quantity?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the equilibrium price?