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31
5) Refer to Figure 4.4. Assume that initially there is free trade. If the United States then imposes a $25 tax
per barrel of imported oil, the tax revenue generated will equal
A) $25 million per day.
B) $50 million per day.
C) $100 million per day.
D) $125 million per day.
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
6) Refer to Figure 4.4. Assume that initially there is free trade. To reduce U.S. imports without a tax, the
U.S. could
A) increase pollution control regulations.
B) allow drilling for oil in the Alaska National Wildlife Refuge.
C) increase safety regulations for oil refineries.
D) all of the above
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
7) Refer to Figure 4.4. At the world price of ________ per barrel of oil, the United States imports 6 million
barrels of oil per day.
A) $100
B) $125
C) $150
D) > $150
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
8) Refer to Figure 4.4. The United States will import 2 million barrels of oil per day if a ________ per
barrel tax is levied on imported oil.
A) $25
B) $50
C) $100
D) $150
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
32
9) Refer to Figure 4.4. The price of oil in the United States would be $125 per barrel, and the United States
would import 6 million barrels of oil per day if the United States levies ________ per barrel tax on
imported oil.
A) no
B) a $25
C) a $50
D) a $100
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
10) Refer to Figure 4.4. Assume that initially there is free trade. The price of oil in the United States will
increase to $150 per barrel if the United States then imposes ________ tax per barrel of imported oil.
A) no
B) a $25
C) a $50
D) a $100
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
11) Refer to Figure 4.4. Assume that initially there is free trade. Tax revenue of $50 million per day will be
generated if the United States imposes a ________ tax per barrel on imported oil.
A) $25
B) $50
C) $100
D) $150
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
33
12) Refer to Figure 4.4. Assume that initially there is free trade. If the United States allowed drilling for
more oil in the Gulf of Mexico, it could
A) reduce U.S. oil imports without a tax.
B) decrease the demand for domestic oil.
C) reduce the supply of domestic oil.
D) increase the domestic price of oil.
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
Refer to the information provided in Figure 4.5 below to answer the question(s) that follow.
Figure 4.5
13) Refer to Figure 4.5. At the world price of $15 per CD-Rom drive, the United States imports ________
million CD-Rom drives.
A) 3
B) 6
C) 9
D) 12
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
34
14) Refer to Figure 4.5. If a $10.00 per CD-Rom drive tax is levied on imported CD-Rom drives, the United
States will
A) import 3 million CD-Rom drives.
B) import 6 million CD-Rom drives.
C) import 9 million CD-Rom drives.
D) import 12 million CD-Rom drives.
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
15) Refer to Figure 4.5. If the United States eliminates all taxes on CD-Rom drives, which of the following
would occur?
A) The price of CD-Rom drives in the United States would be $15 per CD-Rom drive, and the United
States would import 3 million CD-Rom drives.
B) The price of CD-Rom drives in the United States would be $25 per CD-Rom drive, and the United
States would import 3 million CD-Rom drives.
C) The price of CD-Rom drives in the United States would be $15 per CD-Rom drive, and the United
States would import 9 million CD-Rom drives.
D) The price of CD-Rom drives in the United States after the U.S. government eliminated all taxes on
imported CD-Rom drives cannot be determined from this information.
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
16) 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,
A) the quantity of CD-Rom drives demanded will be reduced by 3 million.
B) the quantity of CD-Rom drives supplied by U.S. firms will increase by 3 million.
C) the price of CD-Rom drives in the United States will increase to $25.
D) all of the above
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
35
17) 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,
A) the quantity of CD-Rom drives demanded will be reduced by 6 million.
B) the quantity of CD-Rom drives supplied by U.S. firms will increase by 3 million.
C) the price of CD-Rom drives in the United States will decrease to $5.
D) U.S. imports of CD-Rom drives will increase by 3 million.
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
18) Refer to Figure 4.5. The United States imports 9 million CD-Rom drives at a world price of ________
per CD-Rom drive.
A) $15
B) $25
C) between $15 and $25
D) > $25
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
19) Refer to Figure 4.5. The United States will import 3 million CD-Rom drives if ________ tax per CD-
Rom drive is levied on imported CD-Rom drives.
A) no
B) a $10
C) a $15
D) a $25
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
36
20) Refer to Figure 4.5. The price of CD-Rom drives in the United States would be $15 per CD-Rom drive,
and the United States would import 9 million CD-Rom drives if the United States imposed ________ tax
per CD-Rom drive on imported CD-Rom drives.
A) no
B) a $10
C) a $15
D) a $25
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
21) Refer to Figure 4.5. Assume that initially there is free trade. The quantity demanded of CD-Rom
drives will be reduced by 3 million CD-Rom drives if the United States imposes ________ tax per CD-
Rom drive on imported CD-Rom drives.
A) no
B) a $10
C) a $15
D) a $25
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
22) Refer to Figure 4.5. Assume that initially there is free trade. The quantity of CD-Rom drives supplied
by U.S. firms will increase by 3 million CD-Rom drives if the United States then imposes ________ tax per
CD-Rom drive on imported CD-Rom drives.
A) no
B) a $10
C) a $15
D) a $25
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-4
23) A U.S. import fee on oil would reduce imports and raise the price of U.S. oil products.
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
37
24) A U.S. import fee on oil would reduce the domestic quantity of oil demanded.
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
25) A U.S. import fee on oil would reduce the domestic quantity of oil supplied.
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
26) A U.S. import fee on steel would reduce imports and lower the price of U.S. steel products.
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
27) A U.S. import fee on steel would increase the domestic quantity of steel demanded.
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
28) A U.S. import fee on steel would increase the domestic quantity of steel supplied.
Answer: TRUE
Diff: 2
Topic: Supply and Demand Analysis: An Oil Import Fee
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro-4
38
Copyright © 2017 Pearson Education, Inc.
4.3 Supply and Demand and Market Efficiency
1) Producer surplus is
A) the difference between the maximum a person is willing to pay and current market price.
B) the difference between current market price and full costs of production for the firm.
C) the difference between willingness to sell and full costs of productions for the firm.
D) current market price.
Topic: Supply and Demand and Market Efficiency
Skill: Definition
Learning Outcome: Micro-7
2) Consumer surplus is
A) the difference between the maximum a person is willing to pay and current market price.
B) the difference between current market price and full costs of production for the firm.
C) the difference between the maximum a person is willing to pay and full costs of productions for the
firm.
D) current market price.
Topic: Supply and Demand and Market Efficiency
Skill: Definition
Learning Outcome: Micro-7
3) If the most someone is willing to pay for ticket to see their favorite team is $100 and the market price of
the ticket is $35, then this buyer will get consumer surplus of
A) 1 ticket.
B) $35.
C) $65.
D) $100.
Topic: Supply and Demand and Market Efficiency
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-7
4) If the market price of a basketball is $35 and the full cost of producing it is $20, then a basketball
producing firm gets producer surplus of
A) 1 basketball.
B) $35.
C) $20.
D) $15.
Topic: Supply and Demand and Market Efficiency
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-7
39
Refer to the information provided in Figure 4.6 below to answer the question(s) that follow.
Equilibrium in this market occurs at the intersection of curves S and D.
Figure 4.6
5) Refer to Figure 4.6. At equilibrium, consumer surplus is area
A) A.
B) A + B + C.
C) G.
D) E + F + G.
Topic: Supply and Demand and Market Efficiency
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-7
6) Refer to Figure 4.6. At equilibrium, producer surplus is area
A) A.
B) A + B + C.
C) G.
D) E + F + G.
Topic: Supply and Demand and Market Efficiency
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-7
