Question 1

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

Accepted Answer

A) price increases which 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 which 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.

Question 2

An increase in the price of good x will be accompanied by:

Accepted Answer

A) a shift in the market demand curve for good x. 
B) a shift in the market demand curve for good y (a substitute for good x). 
C) a movement along the market demand curve for good x. 
D) both b and c 
A) a shift in the market demand curve for good x. 
B) a shift in the market demand curve for good y (a substitute for good x). 
C) a movement along the market demand curve for good x. 
D) both b and c

Question 3

The market demand curve for any good is:

Accepted Answer

A) independent of individuals' demand curves for the good. 
B) the vertical summation of individuals' demand curves. 
C) the horizontal summation of individuals' demand curves. 
D) derived from the firm's marginal cost of production. 
A) independent of individuals' demand curves for the good. 
B) the vertical summation of individuals' demand curves. 
C) the horizontal summation of individuals' demand curves. 
D) derived from the firm's marginal cost of production.

Question 4

Price controls:

Accepted Answer

A) are always popular with consumers because they lower prices. 
B) create shortages. 
C) increase producer surplus because firms can now sell a greater quantity of a good at a lower price. 
D) are necessary to preserve equity. 
A) are always popular with consumers because they lower prices. 
B) create shortages. 
C) increase producer surplus because firms can now sell a greater quantity of a good at a lower price. 
D) are necessary to preserve equity.

Question 5

Per-unit transaction costs:

Accepted Answer

A) may cause the demand and supply curves to shift either inward or outward depending on the value obtained from transaction agents. 
B) refer only to the commission paid to a third-party for each transaction made. 
C) are absorbed by the party seeking the transaction. 
D) have the same effect on behavior as do lump-sum transaction costs;the difference in terminology is purely definitional. 
A) may cause the demand and supply curves to shift either inward or outward depending on the value obtained from transaction agents. 
B) refer only to the commission paid to a third-party for each transaction made. 
C) are absorbed by the party seeking the transaction. 
D) have the same effect on behavior as do lump-sum transaction costs;the difference in terminology is purely definitional.

Question 6

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 7

In the short run,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.

Question 8

If quantity supplied is either greater or less than the equilibrium quantity,then all of the following are true except:

Accepted Answer

A) total loss of surplus will depend on the shape of the demand and supply curves. 
B) the resulting loss of consumer surplus will depend on the price of the good. 
C) total loss of surplus will depend on the price of the good. 
D) there will be an inefficient allocation of resources. 
A) total loss of surplus will depend on the shape of the demand and supply curves. 
B) the resulting loss of consumer surplus will depend on the price of the good. 
C) total loss of surplus will depend on the price of the good. 
D) there will be an inefficient allocation of resources.

Question 9

In the long run,the greater burden of a specific tax will usually be absorbed by:

Accepted Answer

A) consumers. 
B) the party-consumers or producers-with the more elastic demand/supply curve. 
C) the party with the least elastic demand/supply curve. 
D) shareholders and employees of the firm in the form of reduced dividends and wages. 
A) consumers. 
B) the party-consumers or producers-with the more elastic demand/supply curve. 
C) the party with the least elastic demand/supply curve. 
D) shareholders and employees of the firm in the form of reduced dividends and wages.

Question 10

Long-run producer surplus in a perfectly competitive industry accrues mainly to:

Accepted Answer

A) suppliers of inputs with inelastic supply curves. 
B) suppliers of inputs with elastic supply curves. 
C) firms' owners. 
D) marginal consumers. 
A) suppliers of inputs with inelastic supply curves. 
B) suppliers of inputs with elastic supply curves. 
C) firms' owners. 
D) marginal consumers.

Question 11

A change in the distribution of income that leaves total income constant will not shift the market demand curve for a product providing:

Accepted Answer

A) everyone has an income elasticity of demand of zero for the product. 
B) everyone has the same income elasticity of demand for the product. 
C) individuals have differing income elasticities for the product,but the average income elasticity for income gainers is equal to the average income elasticity for income losers. 
D) any of the above conditions occur. 
A) everyone has an income elasticity of demand of zero for the product. 
B) everyone has the same income elasticity of demand for the product. 
C) individuals have differing income elasticities for the product,but the average income elasticity for income gainers is equal to the average income elasticity for income losers. 
D) any of the above conditions occur.

Question 12

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.

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

An increase in the price of good x will be accompanied by:

The market demand curve for any good is:

Price controls:

Per-unit transaction costs:

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

In the short run,a sales tax is:

If quantity supplied is either greater or less than the equilibrium quantity,then all of the following are true except:

In the long run,the greater burden of a specific tax will usually be absorbed by:

Long-run producer surplus in a perfectly competitive industry accrues mainly to:

A change in the distribution of income that leaves total income constant will not shift the market demand curve for a product providing:

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:

Preferences and Utility

Utility Maximization and Choice

Income and Substitution Effects

Demand Relationships Among Goods

Uncertainty

Game Theory

Production Functions

Cost Functions

Profit Maximization

General Equilibrium and Welfare

Monopoly

Imperfect Competition

Labor Markets

Capital and Time

Asymmetric Information

Externalities and Public Goods

Filters

Exam 10: The Partial Equilibrium Competitive Model

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

An increase in the price of good x will be accompanied by:

The market demand curve for any good is:

Price controls:

Per-unit transaction costs:

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

In the short run,a sales tax is:

If quantity supplied is either greater or less than the equilibrium quantity,then all of the following are true except:

In the long run,the greater burden of a specific tax will usually be absorbed by:

Long-run producer surplus in a perfectly competitive industry accrues mainly to:

A change in the distribution of income that leaves total income constant will not shift the market demand curve for a product providing:

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:

Preferences and Utility

Utility Maximization and Choice

Income and Substitution Effects

Demand Relationships Among Goods

Uncertainty

Game Theory

Production Functions

Cost Functions

Profit Maximization

General Equilibrium and Welfare

Monopoly

Imperfect Competition

Labor Markets

Capital and Time

Asymmetric Information

Externalities and Public Goods

Filters