Exam 4: Demand and Supply Applications

Refer to the information provided in Figure 4.1 below to answer the questions that follow. Figure 4.1 -Refer to Figure 4.1. If the United States levies no taxes on apples, the price of apples in the United States would fall to ________, and the United States would import ________.

Refer to the information provided in Figure 4.5 below to answer the questions that follow. Figure 4.5 -Refer to Figure 4.5. Assume that initially there is free trade. If the United States then imposes a $10.00 tax per CD-Rom drive on imported CD-Rom drives,

Refer to the information provided in Figure 4.1 below to answer the questions that follow. Figure 4.1 -Refer to Figure 4.1. At the price of ________ cents per apple the United States imports 6 million apples per day.

Refer to the information provided in Figure 4.1 below to answer the questions that follow. Figure 4.1 -Refer to Figure 4.1. The United States will import 2 million apples per day if a per-apple tax of ________ is levied on imported apples.

An effective price floor must be set

The difference between the maximum a person is willing to pay and current market price is known as

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. Consumer surplus is area [A + B + E] if price is

For a particular product, an effective price ceiling results in

Refer to the information provided in Figure 4.3 below to answer the questions that follow. Figure 4.3 -Refer to Figure 4.3. An example of an effective price ceiling would be government setting the price of pencils at

At equilibrium, deadweight loss is zero.

Related to the Economics in Practice on page 81: Which of the following best explains why the people who wait for hours to acquire tickets to free performances earn less on average than the people who actually see those performances?

The difference between current market price and full costs of production for the firm is known as

The adjustment of ________ is the rationing mechanism in market economies.

When there is overproduction in a market,

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. If price is P1, producer surplus is area

Related to the Economics in Practice on p. 81: The true cost of the Shakespeare in the Park tickets is

The total of consumer plus producer surplus is greatest

Refer to the information provided in Figure 4.2 below to answer the questions that follow. Figure 4.2 -Refer to Figure 4.2. The market is initially in equilibrium at Point A and supply shifts from S₁ to S₂. Which of the following statements is true?

Refer to the information provided in Figure 4.3 below to answer the questions that follow. Figure 4.3 -Refer to Figure 4.3. If the government will not allow retailers to charge more than $0.40 for a pencil, which of the following will happen?

A shortage occurs when there is an excess supply in a market.