Question 1

Suppose a farmer in a perfectly competitive agricultural industry rents land that is uniquely productive in the production of a certain crop.In the long run

Accepted Answer

A)  the owner of the land receives economic rent while the farmer earns zero economic profit. 
B)  the owner of the land earns zero economic profit while the farmer receives economic rent. 
C)  both the farmer and the owner of the land receive economic rent. 
D)  neither the farmer nor the owner of the land receive economic rent. 
A)  the owner of the land receives economic rent while the farmer earns zero economic profit. 
B)  the owner of the land earns zero economic profit while the farmer receives economic rent. 
C)  both the farmer and the owner of the land receive economic rent. 
D)  neither the farmer nor the owner of the land receive economic rent.

Question 2

The larger the U.S.imposed per unit import tariff on a good imported and produced in the United States,

Accepted Answer

A)  the smaller the U..S consumer surplus. 
B)  the larger the U.S. producer surplus. 
C)  the larger the government revenue. 
D)  All of the above. 
A)  the smaller the U..S consumer surplus. 
B)  the larger the U.S. producer surplus. 
C)  the larger the government revenue. 
D)  All of the above.

Question 3

-The above figure shows supply and demand curves for apartment units in a large city.If the city government passes a law that establishes $350 per month as the legal maximum rent,producer surplus decreases by

Accepted Answer

A)  d. 
B)  b + f. 
C)  c + g. 
D)  i. 
A)  d. 
B)  b + f. 
C)  c + g. 
D)  i.

Question 4

A ban on imports,a tariff,or a quota raises the price to domestic consumers.This means that consumers will buy less of the product at a higher price.The loss associated with this is called

Accepted Answer

A)  production associated loss. 
B)  productive consumption loss. 
C)  consumption distortion loss. 
D)  consumer misperception loss. 
A)  production associated loss. 
B)  productive consumption loss. 
C)  consumption distortion loss. 
D)  consumer misperception loss.

Question 5

In economics,welfare analysis focuses on

Accepted Answer

A)  income transfer programs. 
B)  food stamp programs. 
C)  international aid programs. 
D)  None of the above. 
A)  income transfer programs. 
B)  food stamp programs. 
C)  international aid programs. 
D)  None of the above.

Question 6

In a competitive market,the demand and supply curves are Q = 12 - P and Q = 5P,respectively.If output is fixed at Q = 11,what is the amount of the resulting deadweight loss?

Accepted Answer

A)  0 
B)  0.6 
C)  11.4 
D)  15 
A)  0 
B)  0.6 
C)  11.4 
D)  15

Question 7

If an economist states that not enough of a good is being produced,she usually means that

Accepted Answer

A)  not everyone can afford the good. 
B)  price exceeds marginal cost. 
C)  consumer surplus equals zero. 
D)  at equilibrium, some people who still wish to sell the good cannot find a buyer. 
A)  not everyone can afford the good. 
B)  price exceeds marginal cost. 
C)  consumer surplus equals zero. 
D)  at equilibrium, some people who still wish to sell the good cannot find a buyer.

Question 8

Consumers who are more sensitive to changes in price suffer a greater loss of consumer surplus from any given price increase.

Accepted Answer

A) True 
 B)False

Question 9

Producer surplus is the sum of the profits earned by all firms in a market.

Accepted Answer

A) True 
 B)False

Question 10

Survivability in a perfectly competitive world requires that

Accepted Answer

A)  firms minimize average total cost. 
B)  firms produce new and different products. 
C)  firms maximize profit. 
D)  firms maximize revenue. 
A)  firms minimize average total cost. 
B)  firms produce new and different products. 
C)  firms maximize profit. 
D)  firms maximize revenue.

Question 11

-The above figure shows the demand and supply curves in the market for milk.If the government imposes a quota at 500 gallons,calculate the deadweight loss.

Accepted Answer

DWL = .5(4

Question 12

Producer surplus equals total revenue minus the sum of all marginal cost.

Accepted Answer

A) True 
 B)False

Question 13

In a perfectly competitive market the long-run demand and supply curves are Q = 12 - P and Q = 5P respectively.Producer surplus in this market equals

Accepted Answer

A)  0. 
B)  5. 
C)  10. 
D)  It cannot be determined without more information. 
A)  0. 
B)  5. 
C)  10. 
D)  It cannot be determined without more information.

Question 14

The welfare loss of a tariff equals that of an import quota that leads to the same level of imports.

Accepted Answer

A) True 
 B)False

Question 15

Consumers often purchase products that,afterward,they regret purchasing.This can be explained by

Accepted Answer

A)  consumers trying products to determine if their consumer surplus increases. 
B)  consumers trying products to determine if firm advertising is honest. 
C)  consumers trying to minimize expenditures. 
D)  consumers trying to maximize choice. 
A)  consumers trying products to determine if their consumer surplus increases. 
B)  consumers trying products to determine if firm advertising is honest. 
C)  consumers trying to minimize expenditures. 
D)  consumers trying to maximize choice.

Question 16

"Supporters of import restrictions and protectionist policies place greater weight on producer welfare than on consumer welfare." Comment.

Accepted Answer

Import restrictions increase t

Question 17

In the long-run equilibrium in perfect competition,

Accepted Answer

A)  producer surplus is positive. 
B)  producer surplus is negative. 
C)  producer surplus is greater than consumer surplus. 
D)  producer surplus is less than consumer surplus. 
A)  producer surplus is positive. 
B)  producer surplus is negative. 
C)  producer surplus is greater than consumer surplus. 
D)  producer surplus is less than consumer surplus.

Question 18

If in a market the last unit of output was sold at a price higher than marginal cost,

Accepted Answer

A)  producers are better off producing more. 
B)  consumers are better off if less of the product is sold. 
C)  social welfare is not maximized. 
D)  the unit increased total profit. 
A)  producers are better off producing more. 
B)  consumers are better off if less of the product is sold. 
C)  social welfare is not maximized. 
D)  the unit increased total profit.

Question 19

Giving presents at Christmas does NOT generate a deadweight loss if

Accepted Answer

A)  all gift are money. 
B)  everybody gets exactly what they want. 
C)  nobody can be made better off by returning the gift and purchasing a different one. 
D)  All of the above. 
A)  all gift are money. 
B)  everybody gets exactly what they want. 
C)  nobody can be made better off by returning the gift and purchasing a different one. 
D)  All of the above.

Question 20

Producer surplus is equal to

Accepted Answer

A)  the area under the supply curve. 
B)  the difference between price and average cost for all units sold. 
C)  the difference between price and marginal cost for all units sold. 
D)  the firm's profit when fixed costs exist. 
A)  the area under the supply curve. 
B)  the difference between price and average cost for all units sold. 
C)  the difference between price and marginal cost for all units sold. 
D)  the firm's profit when fixed costs exist.

Suppose a farmer in a perfectly competitive agricultural industry rents land that is uniquely productive in the production of a certain crop.In the long run

The larger the U.S.imposed per unit import tariff on a good imported and produced in the United States,

-The above figure shows supply and demand curves for apartment units in a large city.If the city government passes a law that establishes $350 per month as the legal maximum rent,producer surplus decreases by

A ban on imports,a tariff,or a quota raises the price to domestic consumers.This means that consumers will buy less of the product at a higher price.The loss associated with this is called

In economics,welfare analysis focuses on

In a competitive market,the demand and supply curves are Q = 12 - P and Q = 5P,respectively.If output is fixed at Q = 11,what is the amount of the resulting deadweight loss?

If an economist states that not enough of a good is being produced,she usually means that

Consumers who are more sensitive to changes in price suffer a greater loss of consumer surplus from any given price increase.

Producer surplus is the sum of the profits earned by all firms in a market.

Survivability in a perfectly competitive world requires that

-The above figure shows the demand and supply curves in the market for milk.If the government imposes a quota at 500 gallons,calculate the deadweight loss.

Producer surplus equals total revenue minus the sum of all marginal cost.

In a perfectly competitive market the long-run demand and supply curves are Q = 12 - P and Q = 5P respectively.Producer surplus in this market equals

The welfare loss of a tariff equals that of an import quota that leads to the same level of imports.

Consumers often purchase products that,afterward,they regret purchasing.This can be explained by

"Supporters of import restrictions and protectionist policies place greater weight on producer welfare than on consumer welfare." Comment.

In the long-run equilibrium in perfect competition,

If in a market the last unit of output was sold at a price higher than marginal cost,

Giving presents at Christmas does NOT generate a deadweight loss if

Producer surplus is equal to

Introduction

Supply and Demand

Applying the Supply and Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 9: Applying the Competitive Model

Suppose a farmer in a perfectly competitive agricultural industry rents land that is uniquely productive in the production of a certain crop.In the long run

The larger the U.S.imposed per unit import tariff on a good imported and produced in the United States,

-The above figure shows supply and demand curves for apartment units in a large city.If the city government passes a law that establishes $350 per month as the legal maximum rent,producer surplus decreases by

A ban on imports,a tariff,or a quota raises the price to domestic consumers.This means that consumers will buy less of the product at a higher price.The loss associated with this is called

In economics,welfare analysis focuses on

In a competitive market,the demand and supply curves are Q = 12 - P and Q = 5P,respectively.If output is fixed at Q = 11,what is the amount of the resulting deadweight loss?

If an economist states that not enough of a good is being produced,she usually means that

Consumers who are more sensitive to changes in price suffer a greater loss of consumer surplus from any given price increase.

Producer surplus is the sum of the profits earned by all firms in a market.

Survivability in a perfectly competitive world requires that

-The above figure shows the demand and supply curves in the market for milk.If the government imposes a quota at 500 gallons,calculate the deadweight loss.

Producer surplus equals total revenue minus the sum of all marginal cost.

In a perfectly competitive market the long-run demand and supply curves are Q = 12 - P and Q = 5P respectively.Producer surplus in this market equals

The welfare loss of a tariff equals that of an import quota that leads to the same level of imports.

Consumers often purchase products that,afterward,they regret purchasing.This can be explained by

"Supporters of import restrictions and protectionist policies place greater weight on producer welfare than on consumer welfare." Comment.

In the long-run equilibrium in perfect competition,

If in a market the last unit of output was sold at a price higher than marginal cost,

Giving presents at Christmas does NOT generate a deadweight loss if

Producer surplus is equal to

Introduction

Supply and Demand

Applying the Supply and Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters