Exam 10: The Partial Equilibrium Competitive Model

Quotas that limit the quantity of imports of a foreign good provide an incentive for foreign suppliers to I.provide higher quality goods. II.seek more open markets elsewhere. III.lower prices to be more competitive. IV.stop all trade with the country imposing the quotas. Which of the above statements are true?

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

In the opening of free trade,if world prices of a good are less than domestic prices of that same good,

If a 1 percent increase in price leads to a 0.7 percent increase in quantity supplied,the short-run supply curve is

Price controls

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

In the very short run

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

In the short run,a sales tax is

If the market for hula-hoops is characterized by a very inelastic supply curve and a very elastic demand curve,an inward shift in the supply curve would be reflected primarily in the form of

In a competitive market,an efficient allocation of resources is characterized by

If the market for bottled spring water is characterized by a very elastic supply curve and a very inelastic demand curve,an outward shift in the supply curve would be reflected primarily in the form of

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

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

One way to minimize the excess burden resulting from a specific tax is to

The short-run market supply curve is

A deadweight loss of consumer and/or producer surplus occurs when

When a quota/trade barrier is instituted,the loss of domestic consumer surplus may be transferred to all of the following except:

"Missing markets" result from

The market demand curve for any good is