tag:blogger.com,1999:blog-42446122921614327602024-02-07T05:51:22.617-08:00June O'Neill_microeconomicsJune O'Neillhttp://www.blogger.com/profile/13572937206547270171noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-4244612292161432760.post-88569479947317756462009-05-05T13:44:00.001-07:002009-05-05T13:46:00.400-07:00Quiz # 3-11. In an unregulated, competitive market consumer surplus exists because some<br />a. sellers are willing to take a lower price than the equilibrium price.<br />b. consumers are willing to pay more than the equilibrium price.<br />c. sellers will only sell at prices above equilibrium price (or actual price).<br />d. consumers are willing to make purchases only if the price is below the actual price.<br /><br />2. In an unregulated, competitive market producer surplus exists because some<br />a. consumers are willing to pay more than the equilibrium price.<br />b. producers are willing to take more than the equilibrium price.<br />c. producers are willing to sell at less than the equilibrium price.<br />d. consumers are willing to purchase, but only at prices below equilibrium price.<br /><br />3. When government intervenes in a competitive market by imposing an effective price ceiling, we would expect the quantity supplied to _______ and the quantity demanded to ________.<br />a. fall; rise<br />b. fall; fall<br />c. rise; rise<br />d. rise; fall<br /><br />4. Price ceilings can result in a net loss in consumer surplus when the ______ curve is ________.<br />a. demand; very elastic<br />b. demand; very inelastic<br />c. supply; very inelastic<br />d. none of the above; price ceilings always increase consumer surplus.<br /><br />5. Consider the following statements when answering this question<br />I. Overall, the sick will always gain from a price ceiling on prescription drugs.<br />II. The reduction of supply caused by the imposition of a price ceiling is greater the more inelastic the market supply curve.<br /><br />a. I and II are true.<br />b. I is true, and II is false.<br />c. I is false, and II is true.<br />d. I and II are false.<br /><br />6. Eliminating price supports for all US agricultural producers will hurt the farmers who cultivate products that have<br />a. a high own price elasticity of demand and a high price elasticity of market supply.<br />b. a high own price elasticity of demand and a low price elasticity of market supply.<br />c. a low own price elasticity of demand and a high price elasticity of market supply.<br />d. a low own price elasticity of demand and a low price elasticity of market supply.<br /><br />7. What is the difference between a price support and a price floor?<br />a. A price support is below equilibrium; a price floor is above it.<br />b. A price support is above equilibrium; a price floor is below it.<br />c. Government buys the excess supply to maintain a price floor, but not a price support.<br />d. Government buys the excess supply to maintain a price support, but not for a price floor.<br />e. There is no difference between the two.<br /><br />8. A price support may be pictured by<br />a. shifting the demand curve to the right by the amount of the government purchase.<br />b. shifting the demand curve to the left by the amount of the government purchase.<br />c. shifting the supply curve to the right by the amount of the government purchase.<br />d. shifting the supply curve to the left by the amount of the government purchase.<br />e. Drawing a horizontal line below equilibrium price at the supported price.June O'Neillhttp://www.blogger.com/profile/13572937206547270171noreply@blogger.com0tag:blogger.com,1999:blog-4244612292161432760.post-9259820819089272162009-05-05T13:41:00.000-07:002009-05-05T13:43:15.143-07:00Quiz # 3-2<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEUtz3GXwW1CydbSRhwIwcY1PqloNT11HtUMWSF-cNAk8E08I1gYKNSJfITb9SNA4dLbRZK_uKKtoY-XbY-M15hyphenhyphenCN48kZYt8tc08HIehA9yELKg1Wpe8XVY0Zgp-LSwfqhfCKr0xEqDR0/s1600-h/Quiz+3_fig+9.6.jpg"><img id="BLOGGER_PHOTO_ID_5332442987125280162" style="FLOAT: right; MARGIN: 0px 0px 10px 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 217px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEUtz3GXwW1CydbSRhwIwcY1PqloNT11HtUMWSF-cNAk8E08I1gYKNSJfITb9SNA4dLbRZK_uKKtoY-XbY-M15hyphenhyphenCN48kZYt8tc08HIehA9yELKg1Wpe8XVY0Zgp-LSwfqhfCKr0xEqDR0/s320/Quiz+3_fig+9.6.jpg" border="0" /></a><br /><div> </div><div> </div><div> </div><div> </div><div><strong>Figure 9.6: A Price Support Problem<br /><br /></strong><br /><br /></div><div> </div><div> </div><div> </div><div><strong>Draw the appropriate lines you need to answer questions 9-13 which are based on Figure 9.6<br /><br /></strong>9. Refer to <strong>Figure 9.6</strong>. As a result of this policy, quantity will<br />a. fall to 300.<br />b. rise to 400.<br />c. stay at 400.<br />d. fall to 400.<br />e. rise to 600.<br /><br />10. Refer to <strong>Figure 9.6</strong>. As a result of this policy, consumer surplus will<br />a. fall to $15.<br />b. fall to $2250.<br />c. rise to $2500.<br />d. fall to $5000.<br />e. rise to $5000.<br /><br />11. Refer to <strong>Figure 9.6</strong>. As a result of this policy, producer surplus will be<br />a. $2000.<br />b. $3375.<br />c. $4500.<br />d. $6000.<br />e. $12,000.<br /><br />12. Refer to <strong>Figure 9.6</strong>. The amount the government pays in the market to implement this policy is<br />a. $20.<br />b. $3000.<br />c. $4000.<br />d. $6000.<br />e. $12,000.<br /><br />13. Refer to <strong>Figure 9.6</strong>. Including the consumers' expected tax burden, the total change in welfare from this policy is<br />a. -$6000.<br />b. -$5250.<br />c. -$4500.<br />d. $4500.<br />e. $5250.<br /><br /><br />14. Compared to a tariff, an import quota, which restricts imports to the same amount as the tariff, will leave the country as a whole<br />a. worse off than a comparable tariff.<br />b. not as bad off as a comparable tariff.<br />c. about the same as a comparable tariff.<br />d. any of the above can be true.</div>June O'Neillhttp://www.blogger.com/profile/13572937206547270171noreply@blogger.com0tag:blogger.com,1999:blog-4244612292161432760.post-53751401988143818672009-05-05T13:37:00.000-07:002009-05-05T14:30:36.448-07:00Quiz # 3-3<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvz5NTkpCwJXylKdzXVWDX1YNZfNRqT5KHhih1JMONVqsTV542i__I8fKPSBkmfUsNC9KDJLuW_fIotGeOI5T_mhJgsPlLUPpKTgaO2kcH-VfFzxKI11aPG48WcREaUeGJgEXRrucni7hP/s1600-h/Quiz+3_fig+9.8.jpg"><img id="BLOGGER_PHOTO_ID_5332441961240485970" style="FLOAT: right; MARGIN: 0px 0px 10px 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 203px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvz5NTkpCwJXylKdzXVWDX1YNZfNRqT5KHhih1JMONVqsTV542i__I8fKPSBkmfUsNC9KDJLuW_fIotGeOI5T_mhJgsPlLUPpKTgaO2kcH-VfFzxKI11aPG48WcREaUeGJgEXRrucni7hP/s320/Quiz+3_fig+9.8.jpg" border="0" /></a><br /><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong>Figure 9.8: A Foreign Trade Problem</strong> </div><div></div><div></div><div></div><div></div><div></div><div></div><div></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong></div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong></strong> </div><div><strong>Draw the appropriate lines to answer questions 15-20. Here, Pw = the world price of sugar.<br /></div></strong><div><br />15. Refer to <strong>Figure 9.8.</strong> With no government interference, the country pictured will<br />a. import 500 tons of sugar.<br />b. import 300 tons of sugar.<br />c. import 200 tons of sugar.<br />d. import no sugar.<br />e. export sugar.<br /><br />16. Refer to <strong>Figure 9.8</strong>. A $50 tariff would result in domestic consumption of<br />a. 600, domestic production of 100, and imports of 500.<br />b. 500, domestic production of 200, and imports of 300.<br />c. 400, domestic production of 300, and imports of 100.<br />d. 300, domestic production of 400, and exports of 100.<br />e. 200, domestic production of 500, and exports of 300.<br /><br />17. Refer to <strong>Figure 9.8.</strong> If free trade in sugar is allowed, consumer surplus will be<br />a. $175.<br />b. $250.<br />c. $30,625.<br />d. $61,250.<br />e. $62,500.<br /><br />18. Refer to <strong>Figure 9.8.</strong> If free trade in sugar is replaced by a $50 tariff in sugar, consumer surplus will<br />a. fall by $50.<br />b. fall by $26,250.<br />c. fall by $22,500.<br />d. rise by $50.<br />e. rise by $17,500.<br /><br />19. Refer to <strong>Figure 9.8.</strong> If free trade in sugar is replaced by a $50 tariff on sugar, the effect on domestic producer surplus will be to<br />a. lower it by $50.<br />b. lower it by $12,500.<br />c. leave it unchanged.<br />d. raise it by $50.<br />e. raise it by $12,500.<br /><br />20. Refer to <strong>Figure 9.8.</strong> If free trade in sugar is replaced by a $50 tariff in sugar, government revenue from the tariff will be<br />a. $50.<br />b. $5000.<br />c. $15,000.<br />d. $17,500.<br />e. $25,000.</div><div></div>June O'Neillhttp://www.blogger.com/profile/13572937206547270171noreply@blogger.com0tag:blogger.com,1999:blog-4244612292161432760.post-52730554158963685912009-05-05T10:27:00.001-07:002009-05-05T11:02:39.325-07:00Quiz # 4<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhVbpU2BbAy7dRGAs9GVkv1YG-ZFkBrkaAKWa1_3eQw7htQyOv7Tjdfl-y7vh32A2Ezo8GjehyWhZRBzgAIo10wwEbd1WV2EKRHmO6gID72MMgktuSrXccUcRpDOly5moVJWbyYG2B4grsH/s1600-h/Quiz+4_Q1.jpg"><img id="BLOGGER_PHOTO_ID_5332400851320738738" style="WIDTH: 320px; CURSOR: hand; HEIGHT: 241px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhVbpU2BbAy7dRGAs9GVkv1YG-ZFkBrkaAKWa1_3eQw7htQyOv7Tjdfl-y7vh32A2Ezo8GjehyWhZRBzgAIo10wwEbd1WV2EKRHmO6gID72MMgktuSrXccUcRpDOly5moVJWbyYG2B4grsH/s320/Quiz+4_Q1.jpg" border="0" /></a><br /><div><div>2. Which of the following is true at the output level where P=MC?<br />a. The monopolist is maximizing profit.<br />b. The monopolist is not maximizing profit and should increase output.<br />c. The monopolist is not maximizing profit and should decrease output.<br />d. The monopolist is earning a positive profit.<br /><br />3. Compared to the equilibrium price and quantity sold in a competitive market, a monopolist will charge a ______________ price and sell a ______________ quantity.<br />a. higher; larger<br />b. lower; larger<br />c. higher; smaller<br />d. lower; smaller<br />e. none of these<br /></div><div><br />4. As the manager of a firm you calculate the marginal revenue is $152 and marginal cost is $200. You should<br />a. expand output.<br />b. do nothing without information about your fixed costs.<br />c. reduce output until marginal revenue equals marginal cost.<br />d. expand output until marginal revenue equals zero.<br />e. reduce output beyond the level where marginal revenue equals zero.<br /><br />5. The monopolist has no supply curve because<br />a. the quantity supplied at any particular price depends on the monopolist's demand curve.<br />b. the monopolist's marginal cost curve changes considerably over time.<br />c. the relationship between price and quantity depends on both marginal cost and average cost.<br />d. there is a single seller in the market.<br />e. although there is only a single seller at the current price, it is impossible to know how many sellers would be in the market at higher prices.<br /><br />6. Use the following two statements to answer this question:<br />I. For a monopolist, at every output level, average revenue is equal to price.<br />II. For a monopolist, at every output level, marginal revenue is equal to price.<br /><br />a. Both I and II are true.<br />b. I is true, and II is false.<br />c. I is false, and II is true.<br />d. Both I and II are false.<br />e. Statements I and II could either be true or false depending upon demand.<br /><br />7. A monopolist has determined that at the current level of output the price elasticity of demand is -0.15. Which of the following statements is true?<br />a. The firm should cut output.<br />b. This is typical for a monopolist; output should not be altered.<br />c. The firm should increase output.<br />d. None of the above is necessarily correct.<br /><br />8. Assume that a firm's marginal cost is $10 and the elasticity of demand is -2. We can conclude that the firm's profit maximizing price is approximately<br />a. $20.<br />b. $5.<br />c. $10.<br />d. The answer cannot be determined without additional information.<br /><br /><strong>Scenario 2:<br /></strong><br />A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost curve for its product:<br /><strong>Q = 200 - 2P<br />MR = 100 - Q<br />TC = 5Q<br />MC = 5<br /></strong><br />9. Refer to <strong>Scenario 2.</strong> What is the profit maximizing level of output?<br />a. 0<br />b. 90<br />c. 95<br />d. 100<br />e. none of the above<br /><br />10. Refer to <strong>Scenario 2</strong>. What is the profit maximizing price?<br />a. $95.00.<br />b. $5.00.<br />c. $52.50.<br />d. $10.00.<br /><br />11. Refer to <strong>Scenario 2</strong>. How much profit does the monopolist earn?<br />a. $4512.50.<br />b. $4987.50.<br />c. $475.00.<br />d. $5.00.<br /><br />12. Refer to <strong>Scenario 2</strong>. Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing level of output?<br />a. 0<br />b. 90<br />c. 95<br />d. 100<br />e. none of the above<br /><br />13. Refer to <strong>Scenario 2</strong>. Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing price?<br />a. $90.00.<br />b. $10.00.<br />c. $55.00.<br />d. $52.50.<br /><br />14. Refer to <strong>Scenario 2</strong>. Suppose that a tax of $5 for each unit produced is imposed by state government. How much profit does the monopolist earn?<br />a. $4050.<br />b. $4950.<br />c. $450.<br />d. $5.<br /><br />15. Refer to<strong> Scenario 2</strong>. Suppose that in addition to the tax, a business license is required to stay in business. The license costs $1000. What is the profit maximizing level of output?<br />a. 0<br />b. 90<br />c. 95<br />d. 100<br />e. none of the above </div></div>June O'Neillhttp://www.blogger.com/profile/13572937206547270171noreply@blogger.com0