Question 1

Holding all other factors constant,consumers demand more of a good the

Accepted Answer

A) higher its price. 
B) lower its price. 
C) steeper the downward slope of the demand curve. 
D) steeper the upward slope of the demand curve. 
A) higher its price. 
B) lower its price. 
C) steeper the downward slope of the demand curve. 
D) steeper the upward slope of the demand curve. B

Question 2

A specific tax on sellers will

Accepted Answer

A) shift the demand curve to the right. 
B) shift the demand curve to the left. 
C) shift the supply curve to the right. 
D) shift the supply curve to the left. 
A) shift the demand curve to the right. 
B) shift the demand curve to the left. 
C) shift the supply curve to the right. 
D) shift the supply curve to the left. D

Question 3

Relative to the short-run demand for gasoline,the long-run demand for gasoline is

Accepted Answer

A) probably more elastic since people need time to change automobiles and driving habits. 
B) probably less elastic since people need time to change automobiles and driving habits. 
C) probably more elastic because people can hoard this good. 
D) probably less elastic because people cannot store this good. 
A) probably more elastic since people need time to change automobiles and driving habits. 
B) probably less elastic since people need time to change automobiles and driving habits. 
C) probably more elastic because people can hoard this good. 
D) probably less elastic because people cannot store this good. A

Question 4

As the supply curve shifts to the right,the increase in quantity demanded will not depend on the shape of the demand curve.

Accepted Answer

A) True 
 B)False

Question 5

If the price of orange juice rises 10%,and as a result the quantity demanded falls by 8%,the price elasticity of demand for orange juice is

Accepted Answer

A) -1.25. 
B) inelastic. 
C) Both A and B above. 
D) Neither A nor B above. 
A) -1.25. 
B) inelastic. 
C) Both A and B above. 
D) Neither A nor B above.

Question 6

For all goods,the long run demand curve is always more elastic than the short run demand curve.

Accepted Answer

A) True 
 B)False

Question 7

If the government decides to levy an ad valorem tax on product with a perfectly inelastic supply.The consumers tax incidence will be

Accepted Answer

A) 0. 
B) 1. 
C) .5. 
D) Cannot be determined. 
A) 0. 
B) 1. 
C) .5. 
D) Cannot be determined.

Question 8

-The above figure shows a graph of a market for pizzas in a large town.At a price of $10,the market

Accepted Answer

A) is not in equilibrium. 
B) has excess supply. 
C) does not have excess demand. 
D) All of the above. 
A) is not in equilibrium. 
B) has excess supply. 
C) does not have excess demand. 
D) All of the above.

Question 9

Restricting imports tends to

Accepted Answer

A) shift the demand curve for the product to the left. 
B) shift the demand curve for the product to the right. 
C) change the shape of the supply curve. 
D) increase the quantity supplied of a product. 
A) shift the demand curve for the product to the left. 
B) shift the demand curve for the product to the right. 
C) change the shape of the supply curve. 
D) increase the quantity supplied of a product.

Question 10

Suppose the market for grass seed is expressed as:
Demand: QD = 100 - 2p
Supply: QS = 3p
Price elasticity of supply is constant at 1.If the supply curve is changed to Q = 8p,price elasticity of supply is still constant at one.Yet with the new supply curve,consumers pay a larger share of a specific tax.Why?

Accepted Answer

Even though the elasticity of supply has

Question 11

The demand curve for Widgets is given by QD = 6000 - 2y - 200p + 30pG,where QD is the quantity of widgets demanded,y is the per capita income and pG is the price of Gizmos.An increase in per capita income will cause

Accepted Answer

A) demand shifts left. 
B) demand shifts right. 
C) demand increases. 
D) movement along the demand curve. 
A) demand shifts left. 
B) demand shifts right. 
C) demand increases. 
D) movement along the demand curve.

Question 12

Suppose an individual inverse demand curve is given as P = 2 - 1/2   
,where   
is the quantity demanded by individual i.There are 50 individual consumers with this identical,individual inverse demand curve.Solve for the market demand curve.

Accepted Answer

Solve for the individual,regul

Question 13

Using the supply and demand equations for wheat above,determine how the equilibrium price and quantity vary with an increase in rainfall(r)holding other factors that influence supply and demand fixed.How do the equilibrium price and quantity change with an increase in income(I).

Accepted Answer

The partial derivatives of the equilibri

Question 14

-The above figure shows four different markets with changes in either the supply curve or the demand curve.Which graph best illustrates the market for computers after technological advances in making computers occur?

Accepted Answer

A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D 
A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D

Question 15

-The above figure shows the supply and demand curves for rice in the U.S.and in Japan.Assume there is no trade between the two countries.If fertilizer price drop causes the supply curves in both countries to shift rightward by the same amount,then

Accepted Answer

A) the quantity will increase the same amount in both counties. 
B) the quantity will decrease the same amount in both countries. 
C) the quantity will increase more in Japan than in the U.S. 
D) the quantity will increase more in the U.S.than in Japan. 
A) the quantity will increase the same amount in both counties. 
B) the quantity will decrease the same amount in both countries. 
C) the quantity will increase more in Japan than in the U.S. 
D) the quantity will increase more in the U.S.than in Japan.

Question 16

When "rent controls" result in a shortage of housing,landlords

Accepted Answer

A) use criteria other than price to allocate housing. 
B) lower the price to allocate the housing. 
C) attempt to attract renters. 
D) None of the above. 
A) use criteria other than price to allocate housing. 
B) lower the price to allocate the housing. 
C) attempt to attract renters. 
D) None of the above.

Question 17

The local lemon market has the following supply and demand relationships:
QD = 100 - 5p - po + 2I
QS = 4p
where p is the price of lemons (per pound),Q is the quantity of lemons in pounds,I is the average consumer income,and po is the price per pound of oranges.Derive the equilibrium price and quantity of lemons as functions of the price of oranges and average consumer income.Use the calculus method of comparative statics to compute the effects of income and the price of oranges on the equilibrium price and quantity of lemons.

Accepted Answer

Find equilibrium price by setting supply

Question 18

-The above figure shows four different markets with changes in either the supply curve or the demand curve.Which graph best illustrates the market for typewriters after technological advances in computerized word-processing software occur?

Accepted Answer

A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D 
A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D

Question 19

If the demand curve for a good is unit price elastic and the supply curve is perfectly price elastic,a $1 specific tax imposed on the sellers of this good will

Accepted Answer

A) shift the supply curve up vertically by $1. 
B) shift the demand curve down vertically by $1. 
C) not raise price at all. 
D) cause price to increase but by less than $1. 
A) shift the supply curve up vertically by $1. 
B) shift the demand curve down vertically by $1. 
C) not raise price at all. 
D) cause price to increase but by less than $1.

Question 20

From the 1970s through the 1990s,the relative price of a college education has increased greatly.During the same time period,college enrollment has also increased.This evidence suggests that during this time period

Accepted Answer

A) the demand curve for a college education has shifted leftward. 
B) the demand curve for a college education has shifted rightward. 
C) the supply curve for a college education has shifted leftward. 
D) the supply curve for a college education has shifted rightward. 
A) the demand curve for a college education has shifted leftward. 
B) the demand curve for a college education has shifted rightward. 
C) the supply curve for a college education has shifted leftward. 
D) the supply curve for a college education has shifted rightward.

Holding all other factors constant,consumers demand more of a good the

A specific tax on sellers will

Relative to the short-run demand for gasoline,the long-run demand for gasoline is

As the supply curve shifts to the right,the increase in quantity demanded will not depend on the shape of the demand curve.

If the price of orange juice rises 10%,and as a result the quantity demanded falls by 8%,the price elasticity of demand for orange juice is

For all goods,the long run demand curve is always more elastic than the short run demand curve.

If the government decides to levy an ad valorem tax on product with a perfectly inelastic supply.The consumers tax incidence will be

-The above figure shows a graph of a market for pizzas in a large town.At a price of $10,the market

Restricting imports tends to

The demand curve for Widgets is given by Q_D = 6000 - 2y - 200p + 30p_G,where Q_D is the quantity of widgets demanded,y is the per capita income and p_G is the price of Gizmos.An increase in per capita income will cause

Suppose an individual inverse demand curve is given as P = 2 - 1/2 ,where is the quantity demanded by individual i.There are 50 individual consumers with this identical,individual inverse demand curve.Solve for the market demand curve.

Using the supply and demand equations for wheat above,determine how the equilibrium price and quantity vary with an increase in rainfall(r)holding other factors that influence supply and demand fixed.How do the equilibrium price and quantity change with an increase in income(I).

-The above figure shows four different markets with changes in either the supply curve or the demand curve.Which graph best illustrates the market for computers after technological advances in making computers occur?

-The above figure shows the supply and demand curves for rice in the U.S.and in Japan.Assume there is no trade between the two countries.If fertilizer price drop causes the supply curves in both countries to shift rightward by the same amount,then

When "rent controls" result in a shortage of housing,landlords

-The above figure shows four different markets with changes in either the supply curve or the demand curve.Which graph best illustrates the market for typewriters after technological advances in computerized word-processing software occur?

If the demand curve for a good is unit price elastic and the supply curve is perfectly price elastic,a $1 specific tax imposed on the sellers of this good will

From the 1970s through the 1990s,the relative price of a college education has increased greatly.During the same time period,college enrollment has also increased.This evidence suggests that during this time period

Introduction

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 2: Supply and Demand

Holding all other factors constant,consumers demand more of a good the

A specific tax on sellers will

Relative to the short-run demand for gasoline,the long-run demand for gasoline is

As the supply curve shifts to the right,the increase in quantity demanded will not depend on the shape of the demand curve.

If the price of orange juice rises 10%,and as a result the quantity demanded falls by 8%,the price elasticity of demand for orange juice is

For all goods,the long run demand curve is always more elastic than the short run demand curve.

If the government decides to levy an ad valorem tax on product with a perfectly inelastic supply.The consumers tax incidence will be

-The above figure shows a graph of a market for pizzas in a large town.At a price of $10,the market

Restricting imports tends to

The demand curve for Widgets is given by QD = 6000 - 2y - 200p + 30pG,where QD is the quantity of widgets demanded,y is the per capita income and pG is the price of Gizmos.An increase in per capita income will cause

Suppose an individual inverse demand curve is given as P = 2 - 1/2 ,where is the quantity demanded by individual i.There are 50 individual consumers with this identical,individual inverse demand curve.Solve for the market demand curve.

Using the supply and demand equations for wheat above,determine how the equilibrium price and quantity vary with an increase in rainfall(r)holding other factors that influence supply and demand fixed.How do the equilibrium price and quantity change with an increase in income(I).

-The above figure shows four different markets with changes in either the supply curve or the demand curve.Which graph best illustrates the market for computers after technological advances in making computers occur?

-The above figure shows the supply and demand curves for rice in the U.S.and in Japan.Assume there is no trade between the two countries.If fertilizer price drop causes the supply curves in both countries to shift rightward by the same amount,then

When "rent controls" result in a shortage of housing,landlords

-The above figure shows four different markets with changes in either the supply curve or the demand curve.Which graph best illustrates the market for typewriters after technological advances in computerized word-processing software occur?

If the demand curve for a good is unit price elastic and the supply curve is perfectly price elastic,a $1 specific tax imposed on the sellers of this good will

From the 1970s through the 1990s,the relative price of a college education has increased greatly.During the same time period,college enrollment has also increased.This evidence suggests that during this time period

Introduction

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

The demand curve for Widgets is given by Q_D = 6000 - 2y - 200p + 30p_G,where Q_D is the quantity of widgets demanded,y is the per capita income and p_G is the price of Gizmos.An increase in per capita income will cause