Deck 22: Extension B: Review

Question 1

-The figure above shows the market for digital cameras. If a tax on digital cameras of $30 per camera is imposed, the marginal cost of the last digital camera produced is ________ and the marginal benefit that consumers receive from it is ________.

A) $330; $300
B) $310; $280
C) $280; $310
D) $300; $300

Answer 1

$280; $310

Question 2

-The figure above shows the market for digital cameras. If a tax on digital cameras of $30 per camera is imposed on sellers of digital cameras, how many cameras are sold?

A) 150 thousand
B) 200 thousand
C) 250 thousand
D) 300 thousand

Answer 2

200 thousand

Question 3

If OPEC cuts oil production to increase their total revenue, we know that the

A) demand for gasoline will decrease.
B) price of gasoline will rise.
C) demand for oil in the global market is elastic.
D) supply of gasoline will increase.

Answer 3

price of gasoline will rise.

Question 4

-If OPEC cuts oil production to increase their total revenue, we know that

A) the demand for gasoline will decrease.
B) the price of gasoline will fall.
C) the demand for oil in the global market is inelastic.
D) OPEC faces a horizontal demand for oil curve.

Question 5

-The figure above shows the market for digital cameras. If a tax on digital cameras of $30 per camera is imposed, and at the same time new technology lowers the marginal cost of producing a digital camera by $30 at each level of output, the marginal cost of the last camera produced is ________ and the marginal benefit that consumers receive from it is ________.

A) $300; $300
B) $270; $300
C) $290; $320
D) $290; $290

Question 6

-The figure above shows the market for digital cameras. If new technology lowers the cost of producing digital cameras, the efficient quantity of digital cameras will be ________ and compared to the original equilibrium, the consumer surplus will ________.

A) less than 300; increase
B) less than 300; decrease
C) greater than 300; increase
D) greater than 300; decrease

Question 7

-The figure above shows the market for digital cameras. If the price of film cameras falls, the efficient quantity of digital cameras will be ________ thousand cameras and the marginal cost of a digital camera will be ________.

A) less than 300; less than $300
B) greater than 300; less than $300
C) 300; greater than $300
D) greater than 400; greater than $310

Question 8

-The figure above shows the demand for and supply of rental housing in Steppeville. If a rent ceiling is set at $900, the quantity of apartment units rented is ________ , and the efficient quantity of apartment units to rent is ________.

A) 400; 1,000
B) 400; 800
C) 800; 800
D) 800; 1,000

Question 9

-The figure above shows the market for digital cameras. If consumers' income rise and a digital camera is a normal good, the efficient quantity of digital cameras will be ________ thousand cameras and the equilibrium quantity will be ________ thousand cameras.

A) less than 300; less than 300
B) greater than 300; less than 300
C) 300; greater than 300
D) greater than 300; greater than 300

Question 10

-The figure above shows the market for digital cameras. If a tax on digital cameras of $30 per camera is imposed on sellers of digital cameras, buyers will pay a ________ fraction of the tax than sellers will pay because the demand is ________ elastic than the supply is.

A) smaller; more
B) smaller; less
C) greater; more
D) greater; less

Question 11

-The figure above shows the market for digital cameras. The price of film cameras falls. In the new equilibrium, the price of a digital camera will be ________ and the marginal benefit from the last digital camera purchased will be ________.

A) less than $300; less than $300
B) greater than $300; less than $300
C) $300; greater than $300
D) greater than $300; greater than $300

Question 12

-Widgets, Inc. can increase its total revenue by lowering the price of its product. From this result we can conclude that the

A) decrease in price increases demand for the firm's product.
B) firm sells an inferior good.
C) demand for the firm's product is price inelastic.
D) demand for the firm's product is price elastic.

Question 13

-The figure above shows the market for digital cameras. If consumers' incomes rise and a digital camera is a normal good, the efficient quantity of digital cameras to produce will be ________ thousand cameras and the marginal cost of a digital camera will be ________.

A) less than 300; less than $300
B) greater than 300; less than $300
C) 300; greater than $300
D) greater than 300; greater than $300

Question 14

-The figure above shows the market for digital cameras. If a tax on digital cameras of $30 per camera is imposed, the equilibrium quantity of digital cameras is ________ thousand cameras and the efficient quantity of digital cameras to produce is ________ thousand cameras.

A) 300; 200
B) 200; 300
C) 200; 200
D) 300; 300

Question 15

-Gadgets, Inc. can increase its total revenue by raising the price of its product. From this result we can conclude that the

A) price increase increases demand for the firm's product.
B) firm sells an inferior good.
C) demand for the firm's product is price inelastic.
D) demand for the firm's product is price elastic.

Question 16

-The figure above shows the market for digital cameras. If a tax on digital cameras of $30 per camera is imposed, consumer surplus will

A) not change.
B) decrease by $1,500.
C) increase by $1,000.
D) decrease by $2,500.

Question 17

-The figure above shows the market for digital cameras. If a tax on digital cameras of $30 per camera is imposed, and at the same time new technology lowers the marginal cost of producing a digital camera by $30 at each level of output, the equilibrium quantity of digital cameras is ________ thousand cameras and the efficient quantity of digital cameras to produce is ________ thousand cameras.

A) 300; 400
B) 400; 300
C) 300; 200
D) 300; 300

Question 18

-The figure above shows the demand for and supply of rental housing in Steppeville. If a rent ceiling is set at $900, the marginal benefit from renting an apartment unit is ________ and the quantity of apartments supplied is ________.

A) $900; 1,000
B) $900; 400
C) $800; 400
D) $800; 800

Question 19

If OPEC cuts oil production to increase their total revenue, we know that the

A) demand for gasoline will decrease.
B) price of gasoline will fall.
C) demand for oil in the global market is elastic.
D) supply of gasoline will decrease.

Question 20

-The figure above shows the market for digital cameras. If there are technological advances in making digital cameras, the efficient quantity of digital cameras will be ________ thousand cameras and the equilibrium quantity will be ________ thousand cameras.

A) less than 300; less than 300
B) greater than 300; less than 300
C) 300; greater than 300
D) greater than 300; greater than 300

Question 21

-The figure above shows the demand for and supply of rental housing in Steppeville. If a rent ceiling is set at $700, the marginal benefit from renting an apartment unit is ________ and the quantity of apartment units supplied is ________.

A) $700; 600
B) $850; 600
C) $800; 800
D) $700; 800

Question 22

-________ occurs when a foreign firm sells its exports at a lower price than its cost of production.

A) A quota
B) Dumping
C) A tariff
D) A nontariff barrier

Question 23

-The figure above shows the demand for and supply of rental housing in Steppeville. If a rent ceiling is set at $700, the quantity of apartment units rented is ________, and the efficient quantity of apartment units to rent is ________.

A) 1,200; 600
B) 600; 600
C) 600; 800
D) 800; 800

Question 24

-The figure above shows the demand for and supply of rental housing in Steppeville. A rent ceiling is set at $700. Rental housing is a normal good and people's incomes increase. As a result, the,

A) gap between the efficient quantity of housing to rent and the actual quantity rented will increase.
B) gap between the efficient quantity of housing to rent and the actual quantity rented will decrease.
C) shortage of housing will decrease.
D) quantity of housing supplied will increase.

Question 25

-The figure above shows the demand for and supply of rental housing in Steppeville. A rent ceiling is set at $700. The rent ceiling creates a ________ and there ________ a deadweight loss.

A) surplus of 1,200 apartments; is not
B) surplus of 600 apartments; is
C) shortage of 600 apartments; is
D) shortage; 1,200 apartments; is not