Question 1

The government proposes a tax on imported champagne.Buyers will bear the entire burden of the tax if the

Accepted Answer

A) supply curve for imported champagne is vertical. 
B) demand curve for imported champagne is vertical. 
C) demand curve for imported champagne is horizontal. 
D) demand curve is downward sloping and the supply curve is upward sloping. 
A) supply curve for imported champagne is vertical. 
B) demand curve for imported champagne is vertical. 
C) demand curve for imported champagne is horizontal. 
D) demand curve is downward sloping and the supply curve is upward sloping.

Question 2

Table 5-6
  
-Refer to Table 5-6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.What are the equilibrium price and quantity (in thousands)for Chef Ernie's sushi?

Accepted Answer

A) $80 and 80 thousand 
B) $60 and 20 thousand 
C) $50 and 100 thousand 
D) $40 and 50 thousand 
A) $80 and 80 thousand 
B) $60 and 20 thousand 
C) $50 and 100 thousand 
D) $40 and 50 thousand

Question 3

Figure 5-1   Figure 5-1 shows Arnold's demand curve for burritos.
-Refer to Figure 5-1.If the market price is $2.00,what is the consumer surplus on the first burrito?

Accepted Answer

A) $0.50 
B) $1.00 
C) $2.00 
D) $7.50 
A) $0.50 
B) $1.00 
C) $2.00 
D) $7.50

Question 4

Table 5-2
  
-Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one ticket is $25,

Accepted Answer

A) everyone will buy a ticket. 
B) consumer surplus will be maximised. 
C) Anya's consumer surplus is $1. 
D) no one will buy a ticket. 
A) everyone will buy a ticket. 
B) consumer surplus will be maximised. 
C) Anya's consumer surplus is $1. 
D) no one will buy a ticket.

Question 5

If the quantity of soccer balls demanded is represented by the equation QD = 80 - 2P,then the corresponding price of soccer balls is represented by the equation

Accepted Answer

A) P = 1.6QD + 80. 
B) P = 80 - QD. 
C) P = 40 - 0.5QD. 
D) P = QD + 160. 
A) P = 1.6QD + 80. 
B) P = 80 - QD. 
C) P = 40 - 0.5QD. 
D) P = QD + 160.

Question 6

The following equations represent the demand and supply for bottles of nail polish.
QD = 25 - P
QS = -15 + 3P
What is the equilibrium price (P)and quantity (Q - in thousands)of bottles of nail polish?

Accepted Answer

A) P = $5;Q = 20 thousand 
B) P = $15;Q = 30 thousand 
C) P = $20;Q = 5 thousand 
D) P = $10;Q = 15 thousand 
A) P = $5;Q = 20 thousand 
B) P = $15;Q = 30 thousand 
C) P = $20;Q = 5 thousand 
D) P = $10;Q = 15 thousand

Question 7

Figure 5-4  
-Refer to Figure 5-4.The figure above represents the market for pecans.Assume that this is a competitive market.If the price of pecans is $9,what changes in the market would result in an economically efficient output?

Accepted Answer

A) The price would decrease,the quantity supplied would decrease and the quantity demanded would increase. 
B) The quantity supplied would increase,the quantity demanded would decrease and the equilibrium price would decrease. 
C) The price would decrease,the demand would increase and the supply would decrease. 
D) The price would increase,the quantity demanded would decrease and the quantity supplied would increase. 
A) The price would decrease,the quantity supplied would decrease and the quantity demanded would increase. 
B) The quantity supplied would increase,the quantity demanded would decrease and the equilibrium price would decrease. 
C) The price would decrease,the demand would increase and the supply would decrease. 
D) The price would increase,the quantity demanded would decrease and the quantity supplied would increase.

Question 8

If marginal benefit is greater than marginal cost,output is inefficiently high.

Accepted Answer

A) True 
 B)False

Question 9

Suppose an excise tax of $1 is imposed on every case of beer sold,and sellers are responsible for paying this tax.How would the imposition of the tax be illustrated in a graph?

Accepted Answer

A) The supply curve for cases of beer would shift to the right by $1. 
B) The supply curve for cases of beer would shift to the left by more than $1. 
C) The supply curve for cases of beer would shift to the left by less than $1. 
D) The supply curve for cases of beer would shift to the left by $1. 
A) The supply curve for cases of beer would shift to the right by $1. 
B) The supply curve for cases of beer would shift to the left by more than $1. 
C) The supply curve for cases of beer would shift to the left by less than $1. 
D) The supply curve for cases of beer would shift to the left by $1.

Question 10

Figure 5-4  
-Refer to Figure 5-4.The figure above represents the market for pecans.Assume that this is a competitive market.If the price of pecans is $3,what changes in the market would result in an economically efficient output?

Accepted Answer

A) The price would increase,the quantity supplied would decrease and the quantity demanded would increase. 
B) The quantity supplied would increase,the quantity demanded would decrease and the equilibrium price would increase. 
C) The price would increase,the demand would decrease and the supply would increase. 
D) The price would increase,the quantity demanded would decrease and the quantity supplied would increase. 
A) The price would increase,the quantity supplied would decrease and the quantity demanded would increase. 
B) The quantity supplied would increase,the quantity demanded would decrease and the equilibrium price would increase. 
C) The price would increase,the demand would decrease and the supply would increase. 
D) The price would increase,the quantity demanded would decrease and the quantity supplied would increase.

Question 11

What area on a supply and demand graph represents consumer surplus?

Accepted Answer

Consumer surplus is

Question 12

Table 5-6
  
-Refer to Table 5-6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units.What is the value of economic surplus in this market?

Accepted Answer

A) $300 thousand 
B) $600 thousand 
C) $1200 thousand 
D) $1600 thousand 
A) $300 thousand 
B) $600 thousand 
C) $1200 thousand 
D) $1600 thousand

Question 13

The graph below represents the market for lychee nuts.The equilibrium price is $7.00 per bushel,but the market price is $5.00 per bushel.Identify the areas representing consumer surplus,producer surplus,and deadweight loss at the equilibrium price of $7.00 and at the market price of $5.00.

Accepted Answer

At the equilibrium price of $7.00:
Consu

Question 14

Table 5-3
  
-Refer to Table 5-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specialises in producing fancy dress costumes.If the price of cowboy hats increases from $38 to $46,

Accepted Answer

A) consumers will buy no cowboy hats. 
B) the marginal cost of producing the third cowboy hat will increase to $46. 
C) producer surplus will rise from $22 to $46. 
D) there will be a surplus of cowboy hats. 
A) consumers will buy no cowboy hats. 
B) the marginal cost of producing the third cowboy hat will increase to $46. 
C) producer surplus will rise from $22 to $46. 
D) there will be a surplus of cowboy hats.

Question 15

The division of the burden of a tax between buyers and sellers in a market is called tax allocation.

Accepted Answer

A) True 
 B)False

Question 16

Table 5-2
  
-Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one of the tickets is $10,

Accepted Answer

A) everyone will buy a ticket except for Esther. 
B) only Anya and Basil will buy tickets. 
C) Celeste's consumer surplus is $25. 
D) the total consumer surplus from the purchase of tickets will be $61. 
A) everyone will buy a ticket except for Esther. 
B) only Anya and Basil will buy tickets. 
C) Celeste's consumer surplus is $25. 
D) the total consumer surplus from the purchase of tickets will be $61.

Question 17

What is a black market?

Accepted Answer

A black market is a market in

Question 18

A ________ curve shows the marginal cost of producing one more unit of a good or service.

Accepted Answer

A) demand 
B) supply 
C) production possibilities 
D) marginal benefit 
A) demand 
B) supply 
C) production possibilities 
D) marginal benefit

Question 19

A demand curve shows

Accepted Answer

A) the willingness of consumers to buy a product at different prices. 
B) the willingness of consumers to substitute one product for another product. 
C) the relationship between the price of a product and the demand for the product. 
D) the relationship between the price of a product and the total benefit consumers receive from the product. 
A) the willingness of consumers to buy a product at different prices. 
B) the willingness of consumers to substitute one product for another product. 
C) the relationship between the price of a product and the demand for the product. 
D) the relationship between the price of a product and the total benefit consumers receive from the product.

Question 20

The difference between the ________ and the ________ from the sale of a product is called producer surplus.

Accepted Answer

A) lowest price a firm would have been willing to accept;price it actually receives 
B) highest price a firm wold have been willing to accept;lowest price it was willing to accept 
C) cost to produce a product;price a firm actually receives 
D) cost to produce a product;profit received 
A) lowest price a firm would have been willing to accept;price it actually receives 
B) highest price a firm wold have been willing to accept;lowest price it was willing to accept 
C) cost to produce a product;price a firm actually receives 
D) cost to produce a product;profit received

The government proposes a tax on imported champagne.Buyers will bear the entire burden of the tax if the

Table 5-6 -Refer to Table 5-6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.What are the equilibrium price and quantity (in thousands)for Chef Ernie's sushi?

Figure 5-1 Figure 5-1 shows Arnold's demand curve for burritos. -Refer to Figure 5-1.If the market price is $2.00,what is the consumer surplus on the first burrito?

Table 5-2 -Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one ticket is $25,

If the quantity of soccer balls demanded is represented by the equation Q_D = 80 - 2P,then the corresponding price of soccer balls is represented by the equation

The following equations represent the demand and supply for bottles of nail polish. Q_D = 25 - P Q_S = -15 + 3P What is the equilibrium price (P)and quantity (Q - in thousands)of bottles of nail polish?

Figure 5-4 -Refer to Figure 5-4.The figure above represents the market for pecans.Assume that this is a competitive market.If the price of pecans is $9,what changes in the market would result in an economically efficient output?

If marginal benefit is greater than marginal cost,output is inefficiently high.

Suppose an excise tax of $1 is imposed on every case of beer sold,and sellers are responsible for paying this tax.How would the imposition of the tax be illustrated in a graph?

Figure 5-4 -Refer to Figure 5-4.The figure above represents the market for pecans.Assume that this is a competitive market.If the price of pecans is $3,what changes in the market would result in an economically efficient output?

What area on a supply and demand graph represents consumer surplus?

Table 5-6 -Refer to Table 5-6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units.What is the value of economic surplus in this market?

The graph below represents the market for lychee nuts.The equilibrium price is $7.00 per bushel,but the market price is $5.00 per bushel.Identify the areas representing consumer surplus,producer surplus,and deadweight loss at the equilibrium price of $7.00 and at the market price of $5.00.

Table 5-3 -Refer to Table 5-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specialises in producing fancy dress costumes.If the price of cowboy hats increases from $38 to $46,

The division of the burden of a tax between buyers and sellers in a market is called tax allocation.

Table 5-2 -Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one of the tickets is $10,

What is a black market?

A ________ curve shows the marginal cost of producing one more unit of a good or service.

A demand curve shows

The difference between the and the from the sale of a product is called producer surplus.

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: the Responsiveness of Demand and Supply

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 5: Economic Efficiency, Government Price Setting and Taxes

The government proposes a tax on imported champagne.Buyers will bear the entire burden of the tax if the

Table 5-6 -Refer to Table 5-6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.What are the equilibrium price and quantity (in thousands)for Chef Ernie's sushi?

Figure 5-1 Figure 5-1 shows Arnold's demand curve for burritos. -Refer to Figure 5-1.If the market price is $2.00,what is the consumer surplus on the first burrito?

Table 5-2 -Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one ticket is $25,

If the quantity of soccer balls demanded is represented by the equation QD = 80 - 2P,then the corresponding price of soccer balls is represented by the equation

The following equations represent the demand and supply for bottles of nail polish. QD = 25 - P QS = -15 + 3P What is the equilibrium price (P)and quantity (Q - in thousands)of bottles of nail polish?

Figure 5-4 -Refer to Figure 5-4.The figure above represents the market for pecans.Assume that this is a competitive market.If the price of pecans is $9,what changes in the market would result in an economically efficient output?

If marginal benefit is greater than marginal cost,output is inefficiently high.

Suppose an excise tax of $1 is imposed on every case of beer sold,and sellers are responsible for paying this tax.How would the imposition of the tax be illustrated in a graph?

Figure 5-4 -Refer to Figure 5-4.The figure above represents the market for pecans.Assume that this is a competitive market.If the price of pecans is $3,what changes in the market would result in an economically efficient output?

What area on a supply and demand graph represents consumer surplus?

Table 5-6 -Refer to Table 5-6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units.What is the value of economic surplus in this market?

The graph below represents the market for lychee nuts.The equilibrium price is $7.00 per bushel,but the market price is $5.00 per bushel.Identify the areas representing consumer surplus,producer surplus,and deadweight loss at the equilibrium price of $7.00 and at the market price of $5.00.

Table 5-3 -Refer to Table 5-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specialises in producing fancy dress costumes.If the price of cowboy hats increases from $38 to $46,

The division of the burden of a tax between buyers and sellers in a market is called tax allocation.

Table 5-2 -Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one of the tickets is $10,

What is a black market?

A ________ curve shows the marginal cost of producing one more unit of a good or service.

A demand curve shows

The difference between the ________ and the ________ from the sale of a product is called producer surplus.

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: the Responsiveness of Demand and Supply

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

If the quantity of soccer balls demanded is represented by the equation Q_D = 80 - 2P,then the corresponding price of soccer balls is represented by the equation

The following equations represent the demand and supply for bottles of nail polish. Q_D = 25 - P Q_S = -15 + 3P What is the equilibrium price (P)and quantity (Q - in thousands)of bottles of nail polish?

The difference between the and the from the sale of a product is called producer surplus.