Exam 3 - I“ gw(E‘wA-lLK CbaPl'V'S r1,“ Please choose...

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Unformatted text preview: I“) gw (E‘wA-lLK CbaPl'V'S r1,“ Please choose the best answer at the choices Qresented in the multigle choice questions. One of the basic principles of economics is that markets are usually a good way to organize economic activity. This principle is explained by the study of a factor markets. . energy markets. b c welfare economics. d labor economics. This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Table 7-2 Refer to Table 7 —2. If the price of Vanilla Coke is $6.00, who will purchase the good? a. all five individuals b. Megan, Mallory and Audrey c. David, Laura and Megan d. David and Laura Shannon buys a new CD player for her car for $135. She receives consumer surplus of $25 on her purchase if her willingness to pay is a. $25. b. $110. 0. $135. @ $160. Figure 7-1 Price Refer to Figure 7 -1. When the price is P1, total consumer surplus is 1:. 24B endow! 6”?“ J hLlow anmé' 6) A+B+C. d. A+B+D, Producer surplus is a. measured using the demand curve for a good. b. always a negative number for sellers in a competitive market. Q the amount a seller is paid minus the cost of production. d. the opportunity cost of production minus the cost of producing goods that go unsold. Figure 7-6 C . 6. Refer to Figure 7 -6. When the price is P2, total producer surplus is a A b: A.+ C. be\uw?flc¢,€r (Mauve 3.x??R7 69. A + B + C. d. D+E. Figure 7-9 Price $28 Egg 26 1.1+”- 24 \f; 6 O 22 $45 20 g a 0 0 /l 18 16 14 0L: 7/; L; (4 12 : bio Cu) O 10 2O 30 40 50 60 70 8C) 90100110120130140150 Quantity A ‘ 7. Refer to Figure 7 -9. At the equilibrium price, total consumer surplus is a? $480. b. $640. 0. $1,120. d. $1,280. % ~ 8. Refer to Figure 7-9. At the equilibrium price, total producer surplus is a. $480. 63>. $640. c. $1,120. d. $1,280. (1— 9. Refer to Figure 7-9. The efficient price is a. $22 and the efficient quantity is 40. b. $22 and the efficient quantity is 110. 63? $16 and the efficient quantity is 80. d. $8 and the efficient quantity is 40. ’4‘ 10. The French expression used by free-market advocates, which literally translates as "allow them to do," is @ laissez-faire. b. je ne sais pas. C. Si”! vous plait. d. téte—c‘z-téte. A . l l . Refer to Figure 8-4. After the tax is levied, total consumer surplus is represented by area @A. b.A+B+Q c D+E+F d F a. b. c. G. b 12. Refer to Figure 8-4. After the tax is levied, total producer surplus is represented by area A. A+B+C D+E+F. F. EL 13. Refer to Figure 8—4. The benefit to the government is a. Q3. c. d. measured by tax revenue and is represented by area A + B. measured by tax revenue and is represented by area B + D. measured by the net gain in total surplus and is represented by area B + D. measured by the net gain in total surplus and is represented by area D + E. b . l4. Refer to Figure 8-4. The loss in total welfare that results from the tax is represented by area a. A+B+D+F. b. A+B+C. c. D--E+F. 6: C—-E. r a b. £9. d. C 15. The deadweight loss from a tax does not vary in amount when the price elasticity of demand changes. does not vary in amount when the amount of the tax per unit changes. is larger, the larger is the amount of the tax per unit. is smaller, the larger is the amount of the tax per unit. A 16. Which of the following statements is correct regarding a tax on a good and the resulting deadweight loss? a b. The greater are the price elasticities of supply and demand, the greater is the deadweight loss. The greater is the price elasticity of supply and the smaller is the price elasticity of demand, the greater is the deadweight loss. The smaller are the decreases in quantity demanded and quantity supplied, the greater the deadweight loss. The smaller is the wedge between the effective price to sellers and the effective price to buyers, the greater is the deadweight loss. E . 17. If the tax on a good is doubled, the deadweight loss of the tax a. increases by 50 percent. b. doubles. c. triples. Q’. quadruples. Figure 9-2. The domestic country is China. Domestic Suppw World Price Domestic C r 18. Refer to Figure 9-2. If China were to abandon a no-trade policy in favor of a free-trade policy, a. Chinese producers of pencil Sharpeners would become worse off. b. Chinese consumers of pencil Sharpeners would become better off. if) total surplus in the Chinese economy would increase. d. All of the above are correct. Tutu $044)in “\w'i-VS §A(rewaS w/ ’Cfco, +P~J< /————“‘— . k 19. Refer to Figure 9-2. With trade, China will a. import 100 pencil Sharpeners. b. import 250 pencil Sharpeners. 0. export 150 pencil Sharpeners. @ export 250 pencil Sharpeners. \5- 20. Refer to Figure 9-2. With trade, producer surplus in China is a. $800. K O b. $1,200. W. (”6 0. $1,800. 7:37: @ $2,700. A . 21. Trade raises the economic well-being of a nation in the sense that 6? the gains of the winners exceed the losses of the losers. pb’. everyone in an economy gains from trade. 0. since countries can choose what products to trade, they will pick those products that are most beneficial to society. 1. the nation joins the international community when it begins to engage in trade. Figure 9-5 Price of Carnations $3.4 Domestic Supply 12 10 Worid Price Domestic Demand Quantity of Carnations 100 200 30“ 400 500 500 ‘2. (in dozens) g‘ 22. Refer to Figure 9-5. The amount of deadweight loss caused by the tariff equals a. $100. (3. $200. 0. $400. d. $500. :91“ 23. Import quotas and tariffs produce similar results. Which of the following is not one of those results? a. The domestic price of the good increases. @. Consumer surplus of domestic consumers increases. 0. Producer surplus of domestic producers increases. d. A deadweight loss is experienced by the domestic country. impart qua“: 9‘ ‘W’F’IS ML #st (moi For CoASuMUS' ‘D. 24. Which of the following is not a commonly-advanced argument for trade restrictions? a. the jobs argument b. the national-security argument c. the infant-industry argument @ the efficiency argument “Trade, ragJfimuorg av: Amy eFP‘cM/rl _C_; 25. Countries usually impose restrictions on trade with other countries in order to protect a. foreign producers. b. foreign consumers. @. domestic producers. d. domestic consumers. Please turn in to me the exam and scantron when you are done. ...
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