Name
Test Form A
Economics 1
Quiz 1
April 22, 2009
TrueFalse Questions:
Fill in Bubble A for True, Bubble
B
for False.
1.
Consumer’s surplus is the diﬀerence between the number of units of a good demanded and
the number of units supplied.
2.
A market outcome is not eﬃcient if some other possible arrangement of trades will result in
higher total proﬁts for market participants.
3.
If all buyers in an experimental market are able to buy a unit of the good, the market
eﬃciency of the experimental outcome is 100%.
4.
Assume the supply curve for a good shifts in (less supplied at every price) and the demand
curve for the good does not change. If the total revenue of suppliers rises as a result of this
shift, the demand for the good is inelastic.
5.
The fact that fresh raspberries are both cheaper and more plentiful in the summer than in
the winter is best explained by a shift in the demand curve.
Multiple Choice Questions
6.
The supply function for fresh strawberries is given by the equation
P
s
(
Q
) = 3 + 6
Q
. The
demand function is given by the equation
P
d
(
Q
) = 187

2
Q
where
Q
is the number of crates of
strawberries sold. In competitive equilibrium, how many crates of strawberries will be sold?
(a)
20
(b)
23
(c)
28
(d)
141
(e)
None of the above.
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2
7.
In the Farmers’ Apple Market as in Experiment 1, there are 15 buyers with a $40 buyer
value, 10 buyers with a $20 buyer value, 10 sellers with a $10 seller cost, and 10 sellers with
a $30 seller cost. Suppose you arranged trades among these buyers and sellers to maximize
the total proﬁt from trade. How many trades would you arrange?
(a)
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 Spring '07
 Bergstrom
 Economics, Supply And Demand, motel rooms

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