Figure 45
Refer to Figure 45. Which of the following would cause the demand curve to shift
from Demand B to Demand A in the market for oranges in the United States?
a. a freeze in Florida
b. a technological advance that allows oranges to ripen faster
c. a decrease in the price of apples
d. an announcement by the FDA that oranges prevent heart disease
Figure 810
Refer to Figure 810. Suppose the government imposes a tax that reduces the quantity
sold in the market after the tax to Q2. With the tax, the consumer surplus is
a. (P0P2) x Q2.
b. 1/2 x (P0P2) x Q2.
c. (P0P5) x Q5.
d. 1/2 x (P0P5) x Q5.
Figure 71
Refer to Figure 71. If the price of the good is $50, then consumer surplus amounts to
a. $400.
b. $500.
c. $600.
d. $750.
Table 79
The only four consumers in a market have the following willingness to pay for a good:
BuyerWillingness to Pay
Ashleigh$12
Barb$15
Carolyn$19
Danita$27
Refer to Table 79. If there is only one unit of the good available for purchase, and if the
buyers bid against each other for the right to purchase it, then the good will sell for
a. $12 or slightly less
b. $15 or slightly more
c. $19 or slightly more
d. $27 or slightly less
Figure 628
Refer to Figure 628. Suppose a tax of $4 per unit is imposed on this market. Which of
the following is correct?
a. Buyers and sellers will share the burden of the tax equally.
b. Buyers will bear more of the burden of the tax than sellers.
c. Sellers will bear more of the burden of the tax than buyers.
d. Any of the above is possible in this market.
The government’s benefit from a tax can be measured by
a. consumer surplus.
b. producer surplus.
c. tax revenue.
d. All of the above are correct.
Figure 725
Refer to Figure 725. Suppose the government imposes a price floor of $28 in this
market. If the sellers with the lowest cost are the ones who sell the good and the
government does not purchase any excess units produced, then total surplus will be
a. $400.
b. $800.
c. $1,120.
d. $1,184.
Which of these statements about economic models is correct?
a. For economists, economic models provide insights about the world.
b. Economic models are built with assumptions.
c. Economic models are often composed of equations and diagrams.
d. All of the above are correct.
The size of the deadweight loss generated from a tax is affected by the
a. elasticities of both supply and demand.
b. elasticity of demand only.
c. elasticity of supply only.
d. total revenue collected by the government.
A common argument in favor of restricting international trade in good x is based on the
premise that
a. international trade reduces total surplus in countries that export good x.
b. international trade reduces total surplus in countries that import good x.
c. international trade is desirable only when countries with different domestic supplies
of natural resources play by different rules when trading with one another.
d. trade restrictions can be useful when one country bargains with its trading partners.
Which of the following will cause an increase in consumer surplus?
a. an increase in the production cost of the good
b. a technological improvement in the production of the good
c. a decrease in the number of sellers of the good
d. the imposition of a binding price floor in the market
Figure 917
Refer to Figure 917. When comparing no trade to free trade, the gains from trade
amount to
a. $400.
b. $600.
c. $750.
d. $1,000.
Figure 99
Refer to Figure 99. Consumer surplus in this market after trade is
a. A.
b. A + B.
c. A + B + D.
d. C.
Which of the following is the most correct statement about the relationship between
inflation and unemployment?
a. In the short run, falling inflation is associated with falling unemployment.
b. In the short run, falling inflation is associated with rising unemployment.
c. In the long run, falling inflation is associated with falling unemployment.
d. In the long run, falling inflation is associated with rising unemployment.
Analysis of data on workers and those looking for work is conducted by economists at
the
a. Office of Management and Budget.
b. Department of Labor.
c. Congressional Budget Office.
d. Department of the Treasury.
Figure 83
The vertical distance between points A and C represents a tax in the market.
Refer to Figure 83. The price that buyers effectively pay after the tax is imposed is
a. P1.
b. P2.
c. P3.
d. P4.
Figure 926
The diagram below illustrates the market for baseballs in the U.S.
Refer to Figure 926. The figure shows that
a. there will be a surplus of baseballs if the U.S. opens the market for baseballs to
international trade.
b. there will be a shortage of baseballs after the U.S. market for baseballs opens up to
international trade.
c. the U.S. has a comparative advantage in the production of baseballs.
d. other countries have an absolute advantage in the production of baseballs.
Scenario 53
The supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both
goods are considered to be normal goods by a majority of consumers. Suppose that a
large income tax increase decreases the demand for both goods by 10%.
Refer to Scenario 53. The change in equilibrium quantity will be
a. greater in the aged cheddar cheese market than in the bread market.
b. greater in the bread market than in the aged cheddar cheese market.
c. the same in the aged cheddar cheese and bread markets.
d. Any of the above could be correct.
Figure 79
Refer to Figure 79. If the price of the good is $14, then producer surplus is
a. $19.50.
b. $22.50.
c. $20.50.
d. $25.00.
Figure 92
The figure illustrates the market for calculators in a country.
Refer to Figure 92. If this country chooses to trade, the price of calculators in this
country will be
a. $15 and 80 calculators will be sold domestically.
b. $15 and 130 calculators will be sold domestically.
c. $20 and 80 calculators will be sold domestically.
d. $20 and 130 calculators will be sold domestically.
The quantity sold in a market will decrease if the government decreases a
a. binding price floor in that market.
b. binding price ceiling in that market.
c. tax on the good sold in that market.
d. All of the above are correct.
Duties of the Council of Economic Advisers include
a. advising the president and writing the annual Economic Report of the President.
b. implementing the president’s tax policies.
c. tracking the behavior of the nation’s money supply.
d. All of the above are correct.
Alex is willing to pay $10, and Bella is willing to pay $8, for 1 pound of ribeye steak.
When the price of ribeye steak increases from $9 to $11,
a. Alex experiences a decrease in consumer surplus, but Bella does not.
b. Bella experiences a decrease in consumer surplus, but Alex does not.
c. both Bella and Alex experience a decrease in consumer surplus.
d. neither Bella nor Alex experiences a decrease in consumer surplus.
Which of the following statements is correct about the extent of disagreement among
economists?
a. There is a great deal of agreement among economists on virtually every economic
issue.
b. There is a great deal of agreement among economists on many important economic
issues.
c. All disagreements among economists are attributable to differences in their values.
d. All disagreements among economists are attributable to the fact that different
economists have different degrees of faith in the validity of alternative economic
theories.
The demand curve for a good is a line that relates
a. price and quantity demanded.
b. income and quantity demanded.
c. quantity demanded and quantity supplied.
d. price and income.
A perfectly elastic demand implies that
a. buyers will not respond to any change in price.
b. any rise in price above that represented by the demand curve will result in a quantity
demanded of zero.
c. quantity demanded and price change by the same percent as we move along the
demand curve.
d. price will rise by an infinite amount when there is a change in quantity demanded.
Figure 91
The figure illustrates the market for coffee in Guatemala.
Refer to Figure 91. In the absence of trade, the equilibrium price of coffee in
Guatemala is
a. $30.
b. $90.
c. $110.
d. $140.
The distinction between efficiency and equality can be described as follows:
a. Efficiency refers to maximizing the number of trades among buyers and sellers;
equality refers to maximizing the gains from trade among buyers and sellers.
b. Efficiency refers to minimizing the price paid by buyers; equality refers to
maximizing the gains from trade among buyers and sellers.
c. Efficiency refers to maximizing the size of the pie; equality refers to producing a pie
of a given size at the least possible cost.
d. Efficiency refers to maximizing the size of the pie; equality refers to distributing the
pie fairly among members of society.
Figure 910. The figure applies to Mexico and the good is rifles.
Refer to Figure 910. The price and quantity of rifles in Mexico before trade is
a. P0 and Q0.
b. P1 and Q1.
c. P2 and Q2.
d. P1 and Q0.
Figure 613
This figure shows the market demand and market supply curves for good X.
Refer to Figure 613. If the government imposes a price floor of $3 on this market, then
there will be
a. no surplus.
b. a surplus of 10 units.
c. a surplus of 15 units.
d. a surplus of 20 units.
Figure 314
Arturo’s Production Possibilities FrontierDina’s Production Possibilities Frontier
Refer to Figure 314. If Arturo and Dina switch from each person dividing their time
equally between the production of tacos and burritos to each person spending all of
their time producing the good in which they have a comparative advantage, then total
production of burritos will increase by
a. 50.
b. 100.
c. 150.
d. 300.
Figure 726
Refer to Figure 726. At the equilibrium price, producer surplus is
a. $600.
b. $900.
c. $1,200.
d. $1,800.
A good will have a more elastic demand, the
a. greater the availability of close substitutes.
b. more broad the definition of the market.
c. shorter the period of time.
d. more it is regarded as a necessity.
Figure 722
Refer to Figure 722. The efficient price is
a. $80, and the efficient quantity is 50.
b. $70, and the efficient quantity is 60.
c. $70, and the efficient quantity is 100.
d. $50, and the efficient quantity is 60.
Figure 91
The figure illustrates the market for coffee in Guatemala.
Refer to Figure 91. With trade, Guatemala will
a. export 22 units of coffee.
b. export 10 units of coffee.
c. import 30 units of coffee.
d. import 12 units of coffee.