Question 1

Long-run elasticity of supply is defined as

Accepted Answer

A) percentage change in quantity demanded in the long run divided by percentage change in price. 
B) percentage change in price divided by percentage change in quantity demanded in the long run. 
C) percentage change in quantity supplied in the long run divided by percentage change in price 
D) percentage change in price divided by percentage change in quantity demanded in the long run 
A) percentage change in quantity demanded in the long run divided by percentage change in price. 
B) percentage change in price divided by percentage change in quantity demanded in the long run. 
C) percentage change in quantity supplied in the long run divided by percentage change in price 
D) percentage change in price divided by percentage change in quantity demanded in the long run

Question 2

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 3

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 short-run supply curve for each firm is

Accepted Answer

A)  $q = 0.5 ( P - 1 )$ 
B)  $q = \sqrt { P } - 3$ 
C)  $q = P - 1 + 1 / \sqrt { P }$ 
D) $q = p - 1$ 
A)  $q = 0.5 ( P - 1 )$ 
B)  $q = \sqrt { P } - 3$ 
C)  $q = P - 1 + 1 / \sqrt { P }$ 
D) $q = p - 1$

Question 4

Suppose domestic beef producers face demand of QD = 1000 - 5P.In the very short run 500 head of beef are produced.Suppose mad cow strikes a portion of the national herd and the amount brought to market falls to 400.The price per head will rise by

Accepted Answer

A) 10 
B) 30 
C) 30. 
D) 50 
A) 10 
B) 30 
C) 30. 
D) 50

Question 5

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 6

Suppose a chemical company is in a perfectly competitive industry and has a short run total cost curve of $\mathrm { TC } = \frac { 1 } { 3 } \mathrm { q } ^ { 3 } + 5 \mathrm { q } ^ { 2 } + 10 q + 10$ and a short run marginal cost of SMC = q2 + 10q + 10.At the price of 385,how much will be produced?

Accepted Answer

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

Question 7

"Missing markets" result from

Accepted Answer

A) high transactions costs of such markets. 
B) strict price controls. 
C) the inability of producers to gain economies of scale. 
D) foreign countries dominating a domestic market for a product. 
A) high transactions costs of such markets. 
B) strict price controls. 
C) the inability of producers to gain economies of scale. 
D) foreign countries dominating a domestic market for a product.

Question 8

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 9

In the short run,an increase in market demand will usually lead to a(n)

Accepted Answer

A) decrease in price and an increase in quantity. 
B) decrease in price and a decrease in quantity. 
C) increase in price and an increase in quantity. 
D) increase in price and a decrease in quantity. 
A) decrease in price and an increase in quantity. 
B) decrease in price and a decrease in quantity. 
C) increase in price and an increase in quantity. 
D) increase in price and a decrease in quantity.

Question 10

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.

Question 11

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

Question 12

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 13

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 14

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 market supply curve is

Accepted Answer

A) QS = -50 + 50P 
B)  $\mathrm { Q } _ { \mathrm { S } } = - \frac { 1 } { 2 } + \frac { 1 } { 2 } \mathrm { P }$ 
C) QS = -100 + 100P 
D) QS = -50 + 50q2 
A) QS = -50 + 50P 
B)  $\mathrm { Q } _ { \mathrm { S } } = - \frac { 1 } { 2 } + \frac { 1 } { 2 } \mathrm { P }$ 
C) QS = -100 + 100P 
D) QS = -50 + 50q2

Question 15

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 16

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 17

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 18

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.

Question 19

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 be produced in the market?

Accepted Answer

A) 300 
B) 400 
C) 500 
D) 600 
A) 300 
B) 400 
C) 500 
D) 600

Question 20

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.

Long-run elasticity of supply is defined as

The excess burden of a tax 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.The short-run supply curve for each firm is

Suppose domestic beef producers face demand of Q_D = 1000 - 5P.In the very short run 500 head of beef are produced.Suppose mad cow strikes a portion of the national herd and the amount brought to market falls to 400.The price per head will rise by

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?

"Missing markets" result from

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?

In the short run,an increase in market demand will usually lead to a(n)

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

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

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

In the short run

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 market supply curve is

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

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

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

Who benefit(s)from protectionism?

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 be produced in the market?

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

Economic Models

Utility and Choice

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

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Exam 9: Perfect Competition in a Single Market

Long-run elasticity of supply is defined as

The excess burden of a tax 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.The short-run supply curve for each firm is

Suppose domestic beef producers face demand of QD = 1000 - 5P.In the very short run 500 head of beef are produced.Suppose mad cow strikes a portion of the national herd and the amount brought to market falls to 400.The price per head will rise by

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?

"Missing markets" result from

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?

In the short run,an increase in market demand will usually lead to a(n)

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

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

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

In the short run

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 market supply curve is

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

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

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

Who benefit(s)from protectionism?

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 be produced in the market?

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

Economic Models

Utility and Choice

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 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 short-run supply curve for each firm is

Suppose domestic beef producers face demand of Q_D = 1000 - 5P.In the very short run 500 head of beef are produced.Suppose mad cow strikes a portion of the national herd and the amount brought to market falls to 400.The price per head will rise by

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,how much will the individual firm produce?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S = -20 + P.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.The market 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 be produced in the market?