Archives: Quiz

Figure 82 The vertical distance between points A and B represents a tax in the market. Refer to Figure 82. The loss of consumer surplus as a result of the tax is a. $1.50. b. $3. c. $4.50. d. $6. […]

Figure 92 The figure illustrates the market for calculators in a country. Refer to Figure 92. With free trade, consumer surplus is a. $320. b. $640. c. $845. d. $1,690. When we move along a given supply curve, a. only […]

Which of the following is a decision that economists study? a. how much people work b. what people buy c. how much money people save d. All of the above are correct. The two basic reasons why economists often appear […]

Jane decides to spend four hours working overtime rather than going to a family gathering. She earns $12.50 per hour for overtime work. Her opportunity cost of working is a. the $50 she earns working. b. the $50 minus the […]

Figure 924 The following diagram shows the domestic demand and supply in a market. Assume that the world price in this market is $20 per unit. Refer to Figure 924. With free trade, consumer surplus is a. $400 and producer […]

Water pollution from pulp and paper mills harms plants, animals, and humans. This is an example of a. a market failure caused by an externality. b. a market failure caused by market power. c. a market failure caused by equality. […]

Figure 91 The figure illustrates the market for coffee in Guatemala. Refer to Figure 91. With trade, total surplus in the Guatemalan coffee market amounts to a. 1,250. b. 1,468. c. 1,870. d. 1,980. Which of the following statements is […]

Figure 24 Refer to Figure 24. This economy has the ability to produce at which point(s)? a. Q, R, T, U b. R, T, U c. R, U d. T Suppose the government imposes a 50cent tax on the sellers […]

When a tax is levied on the sellers of a good, the a. supply curve shifts upward by the amount of the tax. b. quantity demanded decreases for all conceivable prices of the good. c. quantity supplied increases for all […]

When OPEC raised the price of crude oil in the 1970s, it caused the a. demand for gasoline to increase. b. demand for gasoline to decrease. c. supply of gasoline to increase. d. supply of gasoline to decrease. Most studies […]

Canada and the U.S. both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if a. Canada requires fewer resources than the U.S. to produce a bushel of wheat. b. the opportunity cost […]

Table 25 Corn (in bushels)Wheat (in bushels) 20000 1600700 12001300 8001800 4002200 02500 Refer to Table 25. Table 25 shows one set of production possibilities. Which of the following combinations of corn and wheat is not currently attainable but would […]

In a particular country in 1998, the average worker needed to work 25 hours to produce 40 units of output. In that same country in 2008, the average worker needed to work 40 hours to produce 68 units of output. […]

Which of the following statements is not correct? a. Trade allows for specialization. b. Trade has the potential to benefit all nations. c. Trade allows nations to consume outside of their production possibilities curves. d. Absolute advantage is the driving […]

A demand curve shows the relationship between price and a. income. b. quantity demanded. c. production. d. income and quantity demanded. If the crossprice elasticity of two goods is negative, then the two goods are a. necessities. b. complements. c. […]

In the circularflow diagram, which of the following items flows from firms to households through the markets for the factors of production? a. goods and services b. land, labor, and capital c. dollars spent on goods and services d. wages, […]

Suppose the price of milk is $2.39 per gallon, and the equilibrium quantity of milk is 100 thousand gallons per day with no tax on milk. Starting from this initial situation, which of the following scenarios would result in the […]

Suppose the government has imposed a price ceiling on sliced sandwich bread. Which of the following events could transform the price ceiling from one that is binding to one that is not binding? a. An increase in the price of […]

Dee is an accomplished actress and a homeowner who pays a landscaper to maintain her lawn rather than do it herself. Dee has determined that she can earn more in the hour it would take her to work on her […]

Table 54 The following table shows the demand schedule for a particular good. PriceQuantity $200 $163 $126 $89 $412 $015 Refer to Table 54. Using the midpoint method, when price rises from $8 to $12, the price elasticity of demand […]

Figure 622 Refer to Figure 622. Sellers pay how much of the tax per unit? a. $0.50. b. $1.50. c. $3.00. d. $5.00. Which of the following will cause a decrease in producer surplus? a. the imposition of a nonbinding […]

A decrease in demand is represented by a a. movement downward and to the right along a demand curve. b. movement upward and to the left along a demand curve. c. rightward shift of a demand curve. d. leftward shift […]

Figure 53 Refer to Figure 53. Jenna says she would buy 10 gallons of gas per week regardless of the price. If this is true, then Jenna’s demand for gas is represented by demand curve a. A. b. B. c. […]

Table 75 For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three […]

Figure 624 Refer to Figure 624. Which of the following statements is correct? a. The amount of the tax per unit is $6. b. The tax leaves the size of the market unchanged. c. The tax is levied on buyers […]

Figure 915 Refer to Figure 915. Producer surplus with trade and without a tariff is a. G. b. C + G. c. A + C + G. d. A + B + C + G. Figure 84 The vertical distance […]

Figure 87 The vertical distance between points A and B represents a tax in the market. Refer to Figure 87. Suppose a 20th unit of the good were sold by a seller to a buyer. Which of the following statements […]

Figure 95 The figure illustrates the market for tricycles in a country. Refer to Figure 95. Without trade, consumer surplus amounts to a. $810. b. $1,620. c. $3,240. d. $6,480. Table 75 For each of three potential buyers of oranges, […]

For economists, historical episodes a. are not worthy of study because they offer few insights into current economic events and problems. b. are not worthy of study because laboratory experiments provide more reliable data. c. are worthy of study because […]

If a tax is levied on the sellers of a product, then there will be a(n) a. downward shift of the demand curve. b. upward shift of the demand curve. c. decrease in quantity demanded. d. increase in quantity demanded. […]

Figure 629 Suppose the government imposes a $2 on this market. Refer to Figure 629. Suppose D1 represents the demand curve for gasoline in both the short run and long run, S1 represents the supply curve for gasoline in the […]

Figure 629 Suppose the government imposes a $2 on this market. Refer to Figure 629. Suppose D1 represents the demand curve for paperback novels, D2 represents the demand curve for gasoline, and S1 represents the supply curve for paperback novels […]

In a market economy, economic activity is guided by a. the government. b. central planners. c. large businesses. d. prices and selfinterest. Scenario 82 Roland mows Karla’s lawn for $25. Roland’s opportunity cost of mowing Karla’s lawn is $20, and […]

Dawn’s bridal boutique is having a sale on evening dresses. The increase in consumer surplus comes from the benefit of the lower prices to a. only existing customers who now get lower prices on the gowns they were already planning […]

At the equilibrium price of a good, the good will be purchased by those buyers who a. value the good more than price. b. value the good less than price. c. have the money to buy the good. d. consider […]

Consider Frank’s decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in […]

The longrun effects of rent controls are a good illustration of the principle that a. society faces a shortrun tradeoff between unemployment and inflation. b. the cost of something is what you give up to get it. c. people respond […]

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes? a. The supply curve for saddle shoes will shift right, which will […]

In the short run, an increase in the money supply is likely to lead to a. lower unemployment and lower inflation. b. lower unemployment and higher inflation. c. higher unemployment and lower inflation. d. higher unemployment and higher inflation. Josh […]

Suppose there is a decrease in the price of corn. If corn is an input into the production of ethanol, we would expect the supply curve for ethanol to a. shift rightward. b. shift leftward. c. become flatter. d. remain […]

In analyzing international trade, we often focus on a country whose economy is small relative to the rest of the world. We do so a. because it is impossible to analyze the gains and losses from international trade without making […]

Figure 310 Alice and Betty’s Production Possibilities in one 8hour day. Alice’s Production Possibilities FrontierBetty’s Production Possibilities Frontier Refer to Figure 310. If point A represents Alice’s production and point B represents Betty’s production, a. Alice produces 200 pitchers of […]

The minimum wage, if it is binding, raises the incomes of a. no workers. b. only those workers who cannot find jobs. c. only those workers whose jobs would pay less than the minimum wage if it didn’t exist. d. […]

Table 63 The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market. […]

Which of the following expressions can be used to compute the price elasticity of demand? a. Price elasticity of demand = • . b. Price elasticity of demand = • . c. Price elasticity of demand = • . d. […]

Figure 319 Chile’s Production Possibilities FrontierColombia’s Production Possibilities Frontier Refer to Figure 319. Chile and Colombia would not be able to gain from trade if Colombia’s opportunity cost of one pound of soybeans changed to a. 1/2 pound of coffee. […]

Figure 618 The vertical distance between points A and B represents the tax in the market. Refer to Figure 618. The perunit burden of the tax on sellers is a. $6. b. $8. c. $10. d. $14. Figure 219 In […]

The law of supply states that, other things equal, an increase in a. price causes quantity supplied to increase. b. price causes quantity supplied to decrease. c. quantity supplied causes price to increase. d. quantity supplied causes price to decrease. […]

Consumer surplus equals the a. value to buyers minus the amount paid by buyers. b. value to buyers minus the cost to sellers. c. amount received by sellers minus the cost to sellers. d. amount received by sellers minus the […]

Table 320 Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. Minutes Needed to Make 1 Bushel of Wheat Pound of Beef Brad1012 Theresa610 Refer to Table 320. What is Brad’s opportunity […]