Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Microeconomics > Practice Test 2 > Flashcards

Practice Test 2 Flashcards

1
Q

A price ceiling below the equilibrium price is likely to result in a persistent———-, a transfer of surplus from———-and——— deadweight loss

A

Shortage, producers to some Consumers, some

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Typically the government limits the quantity of a good that can be bought and sold by

A

Licensing suppliers of the good

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

The market for Popeyes sandwiches Suppose a price ceiling is set at four dollars at this price. The deadweight loss is equal to.

A

Three dollars

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

The Alaskan crab market if the government imposes a quarter limiting sales of crab to 250 pound, it will have the same affect on transactions as a price floor of

A

$17.50

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

The government of microstomia, a small dictatorship, restricts the price of automobiles to an amount less than or equal to $12,500 a price below the equilibrium price. Such a policy would create a.

A

Price ceiling

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Price controls in the market for strawberries. The consumer surplus lost to a price floor at point B is equal to the area.

A

BCGE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Suppose the government wants to control the quantity of output in the milk market. The government policy is therefore to regulate the quantity of milk that can be bought and sold rather than the price at which transactions occurred. Such a policy is called a

A

Quota

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

The market for Lyft rides in New York City. If the government imposes a quota limit of 7 million rides, the quota rent that will accrue to the lift owner will be.——-per ride, and there will be a total missed opportunity to consumers and producers of—— million rides

A

Three dollars, three

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

The market for kombucha. The table shows the quantity demanded, and quantity supplied of kombucha at various prices, if the government imposes a price ceiling of three dollars per bottle of kombucha, the quantity of kombucha supplied will be——-bottles

A

Eight

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Supply and demand in the market for fresh produce. If a price floor is set at P4 to help improve farm incomes, and the government wants to assure farmers that they’re out, but will be purchased, the government must purchase an amount of output equal to.

A

Q3minus Q0

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

A quota limit that is below the market equilibrium quantity results in

A

A demand price that exceeds the supply price (I believe it’s a quantity demanded that exceeds the quantity supplied )

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Rent controls in the market for apartments in New York City. If I rent ceiling or Saturday at $800, archers would be willing to pay the price at least as high as.

A

$1200 for 1.8 million units.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Markets for apartments in San Francisco. If a price ceiling of $1700 is imposed in this market, the result will be an inefficiency in the form of.—— million apartments

A

An excess demand of 0.6.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Which of these is a quantity control?

A

Limit on the number of cod that can be caught in the north Atlantic ocean

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

If a price ceiling and a price floor, you’re the same quantity restriction the deadweight loss caused by the price ceiling will be —— deadweight caused by the price for

A

Equal to

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

If the cross price elasticity of demand between two goods is negative, then the two goods are

A

Complements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

The price elasticity of demand is defined as

A

The percentage change in the quantity demanded divided by the percentage change in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

When the percentage change in price is greater than the percentage change in quantity demanded, demand is said to be

A

Inelastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Jenelle recently received a promotion at her job, increasing her income from $940 per week to $1060 per week. As a result, she decided to purchase 9% more sushi per week. A computer using the midpoint method, the income elasticity of Jenelle’s demand for sushi is.

A

0.75.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

If the price of M&M, peanut candies increases, the demand for cherry, flavored, soft drinks decreases, these two goods are——-good

A

Complementary

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

If your purchase of toothpaste remains constant at nine units per year, when the price of shampoo increases from $8.,12 dollars, all other things, equal, for you, toothpaste, and shampoo are—— good

A

Unrelated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Suppose the price of rye increases by 16.53%. If the stories by 3.28% less barley after that price increase, the total revenue for ride. Producers will—— because the——— effect is greater than the——— effect

A

Increase, price, quantity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Martinez family, household, income, and expenditures. The Martinez income elasticity of demand for falafel’s computed using the midpoint method is.

A

Approximately -0.7.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

An important determinant for the price elasticity of demand is

A

What time horizon available to adjust the price changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

The price elasticity of demand for canned fruit is calculated as 0.75. Given this demand is.

A

Inelastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

The price elasticity of supply is computed as the percent change in——-divided by the percent change in——-

A

Quantity supplied, price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Since demand for roasted peanuts decreases as the price of pecans increases, we can assume that these two goods are

A

Compliments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

The demand for organic vegetables at the local, farmers market is study, but supply has fallen dramatically because of lack of rainfall. This is good news for farmers if demand is.——-so that the——-effect outweighs the——-affect

A

Inelastic, price, quantity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

The Bellagio hotel in Las Vegas has a fixed capacity of 3950 rooms in the short run. Which statement best describes the short run elasticity of supply for rooms at this hotel.

A

If you asked us to have supplies zero in the short run, because the short run supply curve is vertical

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

If the quantity supplied does not respond substantially to the relatively large change in price, supply is

A

Inelastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

If demand and supply are both very inelastic, a decrease in the right of an exercise tax will likely

A

Decrease the amount of revenue collected by the government

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

The market for summer sandals. The government Lavada a $10 tax on the producers of summer sandals. What area or areas of the graph identify tax revenue

A

B plus D

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

A progressive tax

A

Requires higher income earners to pay higher taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Market for fried cheesecake. The government decides to tax fried cheesecake at a rate of $.30 per cheesecake and collects the tax from producers. According to the table, Consumers will pay——-per cheesecake and by——— cheesecakes after the tax

A

$3.50, 5000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Suppose the governor of California implements estate tax of 10% on all income up to $50,000. Income about $50,000 is not taxed an individual earning $75,000 will have an average tax rate of.

A

6.67%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

If the tax system is designed to minimize the sum of the deadweight loss, due to distorted incentives, and the administrative costs of taxation, it’s principal goal is

A

Maximizing efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

State governments Levi excise taxes on tobacco, because

A

The demand for most tobacco products is inelastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

An analysis of the effect of excise taxes on markets allows us to conclude that

A

Whether the tax is levied on consumers or producers, the quantity sold will be the same(I said, when the price elasticity of demand is higher than the price elasticity of supply, an excess tax falls, mainly on the consumers)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

—— taxes are paid out of wages

A

Income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Taxes, spending and income in California. Suppose the governor of California implement a state sales tax of 5% on all purchases of good and services. From the information provided in the table this tax will be.

A

Regressive: the tax takes a larger percent of income from lower income earners than it does from higher income earners

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

The market for travel mugs. If a one dollar per unit tax is imposed, the price of travel mugs will increase by approximately.
Demand equals 50-0.5Q
Supply equals 0.33.Q

A

$.60

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

The market for travel mugs. The tax revenue collected by government from a one dollar per unit tax will be.
Demand equals 50-0.5.Q
Supply equals 0.33Q

A

59.04

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

The structure of the American federal income tax system reflects the——-principal

A

Ability to pay

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

The ability to pay principal says that

A

Those with a greater ability to pay, should pay more tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

Suppose that income up to and including $30,000 is not taxed income over $30,001-$60,000 is taxed at 10% and income over $60,000 is taxed at 25%. If Nadine is earning income of $100,000 she will pay.—— in personal taxes

A

$13,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

When an economy moves from autarky to free international trade, for industries in the export sector, consumer surplus——-, producer surplus——-, and the economy as a whole———.

A

Falls rises gains

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

A tax on imports of foreign goods is called a

A

Tariff

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

If I countries price in the absence of trade exceeds the price with trade, the domestic quantity supplied with trade is—— the domestic quantity demanded

A

Less then

49
Q

If a Countries domestic price of labor in the absence of trade exceeds the price with trade, the country will likely

A

Import lumber

50
Q

Production possibilities for the United States and Brazil.——-has an comparative advantage in producing sugar

A

Brazil

51
Q

France must give up the production of 100 ties to produce 50 additional dress shirts. The opportunity cost of producing for a dress shirt is—— ties

A

Eight

52
Q

Countries that trade in accordance with the Heckscher Ohlin model will find that

A

Imported goods are primarily goods that utilize their relatively scares factors of production most intensively

53
Q

Spain and Italy, both produce port and wall with constant opportunity costs. Spain can produce 150 barrels of port if it produces no wall or 100 bolts of wall if it produces no port. Italee can produce 50 barrels of port if it produces no wool or 150 bolts of wall if it produces no port. When international trade takes place, each country specializes completely in the production of the good in which it has a comparative advantage. One barrel of port exchanges for one bolt of wall, and Spain exports 50 units of port. We can conclude that Italee produces——— units of port, and——-units of wall, and that Italy consumes——— units of port, and——— units of wool

A

Zero, 150, 50, 100

54
Q

The market for Swiss watches. Assume that SND represent the domestic demand and supply of Swiss watches. The world price PW equals $100. The government imposes a quarter restricting imports to 25 watches if import licenses are granted to foreigners, but net loss due to the import quota is equal to the area.:

A

G H I J J

55
Q

The market for Swiss watches. Assume that DNS represent domestic demand for aunt supply of Swiss watches. The world price PW equals $100 the government imposes a quarter restricted imports to 25 watches. Did the domestic price rises to——-end of the quarter rent is equal to the area——-

A

$120, H I

56
Q

Spain and Italy, both produce port and wall with constant opportunity costs. Spain can produce 150 barrels of port if it produces no wall and 100 V of wall if it produces no port. Italy can produce 50 perils of port if it produces no wool or 100 barrels of wall if it produces no port. Using this information we can conclude that.

A

Italy has a comparative advantage in wall production

57
Q

The world trade organization

A

Resolve disputes between member nations arising from alleged violations of previous agreements regarding international trade

58
Q

If South Korea must give up the production of 75 notebook computers to produce 25 additional cell phones, the opportunity cost of producing for cell phones is—-Notebook computers

A

12

59
Q

Production possibilities for farm, tractors, and motorcycles. The opportunity cost of.——-is——-in the United States as than in Germany.

A

Tractors, less

60
Q

Suppose the United States places a tariff on imported Brazilian ipe. As a result of the tariff, the domestic price of lumber well.——-, consumer surplus well——— and producer surplus will——-

A

Rise, fall, rise

61
Q

Suppose the demand equation is given by P equals 100 minus 2Q, and the supply equation is given by P equals 20+ 2Q. If a quantity restriction is set at two equals 10, what is the deadweight loss associated with this quantity control?

A

$200

62
Q

A market for oranges is an equilibrium at a price of two dollars per pound if the government imposes a price ceiling on oranges of one dollar per pound

A

There will be an excess demand for the good

63
Q

Quantity control set below the equilibrium quantity does not

A

Cause the supply price at the quantity bought and sold to exceed the demand price at the quantity bought and sold

64
Q

Price control is

A

Illegal restriction on how high or low on market price may go

65
Q

Nicolas maduro is the controversial president of Venezuela. Venezuela is also a major producer of petroleum products. Which remain a critical component of Venezuela’s economy. Suppose president Maja wanted to increase his popularity with the citizens of Venezuela buy an acting a government policy to reduce the price of gasoline sold at State Old gas stations to 60% of the previous price. This policy is called a.

A

Price ceiling

66
Q

Rent controls in the market for apartments in New York City. If I rent ceiling is that at $900.

A

Rental apartments may be of inefficiently low quality

67
Q

Suppose the government such a price floor of $4.85 per bushel of wheat when an equilibrium price is $4.55 per bushel. This price floor will.

A

Cause a surplus of wheat

68
Q

All else equal if a price floor above, the equilibrium price is impose on the market, and the government buys the surplus, consumer surplus well——-and producer surplus well——-

A

Fall, rise

69
Q

An economic markets, a quota is a

A

Upper limit on quantity of goods that can be bought or sold

70
Q

The market for a Lyft rides in New York City. If the government imposes a quarter limit on 6 million rides, the quota rent accruing to the lift owner will be.—— pride, and there will be a total missed opportunity to consumers and producers of—-million rides

A

Four dollars, 4

71
Q

If the government has a maximum allowable rent that is above the equilibrium rental rate than the

A

Lautt will have no effect on the rental market

72
Q

A price ceiling is a

A

Maximum price sellers can charge for a good or service

73
Q

The market for audiobooks. A price for a five dollars is imposed in this market would

A

Have no immediate effect

74
Q

To be binding a price ceiling must be set at a price—-the equilibrium price

A

Below

75
Q

A non-binding price floor is a—— price set—— the equilibrium price

A

Minimum below

76
Q

If the quantity supplied does not respond, substantially to a large change in price supply is

A

Inelastic

77
Q

The demand for most farm fresh produce is generally price elastic. This means that is farmers taken collectively, have a bumper crop, they will have —— prices—— quantity sold, and—— incomes

A

Lower, greater higher

78
Q

Milk is an inexpensive good that most would consider to be a necessity. You were there for expected’s demand to be.

A

Inelastic

79
Q

Markets for Mexican takeout. If income changes from $1000-$14,000 per month, the income elasticity of demand computed using the midpoint method it at a price of $10 per Mexican takeout meal is.

A

1.2.

80
Q

Suppose the price of right increases by 16.53%. If the seller is by 3.28% less barley after the price increase, the total revenue for Rhye producers will.—— because——-effect is greater than the—— affect

A

Increase, price, quantity

81
Q

The demand for online movies. If the price of online movies decreases from six dollars to four dollars total revenue—— which means the demand is——-

A

Remains constant, unit elastic

82
Q

A rancher in Texas, decides to raise the prices for cattle by 19% over the prevailing market price. If the demand for beef is perfectly elastic this rancher quantity demanded well.

A

Fall 0

83
Q

The demand for winter gloves. If the price is below.—— demand is inelastic

A

$30 or the midpoint

84
Q

The demand curve for toll roads. This graphic statements, the demand for highway travel on Florida’s Turnpike, a toll road. Demand between $.90 and $1.10 is.——-since the price elasticity of demand computed using the midpoint method is——-

A

Unit elastic, equal to one

85
Q

The price elasticity of supply is computed as the percentage change in——-divided by the percentage change in——-

A

Quantity supplied, price

86
Q

Butter producers know that the price elasticity of demand for butter is 0.2 if they want to increase sales by 4% they will have to lower prices by.

A

20%

87
Q

In the price of M&M, peanut candies, increases the demand for cherry, flavored, soft drinks decreases, these two goods are—-good

A

Complementary

88
Q

If the price elasticity of demand for cotton is 0.5, and the income elasticity of demand for cotton is 0.4.

A

A 50% increase in income will increase the quantity demanded of cotton by 20%

89
Q

The income elasticity of demand for fresh flowers has been estimated to be 0.67. If income gross by 12% in a given period demand will.

A

Increased by about 8%

90
Q

Homework producers know that the price elasticity of demand for whole milk is 0.1. If they want to increase sales by 5%, they will have to lower prices by.

A

50%

91
Q

The governor wants to Levi a one dollar excise tax on a product but wants to minimize the deadweight loss of the tax. To achieve this, the governor should choose a good for which the demand is.—— and the supply is——

A

Inelastic, inelastic

92
Q

If the United States removed an excise tax on all alcohol and tobacco, which affect would not occur

A

Decrease in producer surplus

93
Q

With perfectly inelastic supply in a downward sloping demand curve

A

Producers will be there the entire burden of a tax

94
Q

Attacks that takes a—— percentage of income as income rises is a—-tax

A

Higher, progressive

95
Q

To maximize the tax revenue collected, the government should impose excise taxes in markets in which demand is relatively—— and supplies relatively——-

A

Inelastic, inelastic

96
Q

The market for green tea. In the green tea market the pre-tax equilibrium price is three dollars and the pre-tax equilibrium quantity is 20 cups and excise tax charged on suppliers is levied on each cup of green tea shifting the supply curve upward. The total tax revenue collected by the government is.

A

$26,250

97
Q

Tax incidence analysis, six to determine

A

Who actually pays the tax

98
Q

Three tax structure proposals. The government of new tax city is considering three tax proposals given in the table below policymakers interested in implementing a progressive tax, would suggest using.

A

Proposal 2

99
Q

Taxes on the purchase of specific items, such as gasoline, tobacco, or alcoholic beverages are called—-taxes

A

Excise

100
Q

Attacks that takes a—— percentage of income as income rises is——

A

Lower, regressive

101
Q

The market for beyond meat burgers. If the market is originally an equilibrium and the government imposes an excise tax of $.80 per unit of the goods sold, the government revenue from the tax will be.

A

$240

102
Q

The market for Amazon echo. The figure shows the pre-tax and post tax positions, S1 and S2, respectively of the supply curve for Amazon echo. The deadweight loss arising from the imposition of this tax is equal to the area.

A

C F

103
Q

Suppose the government is considering imposing, an excise tax on protective gear for cycling. Additionally, I suppose that the government does not know whether supply and demand are elastic, or any lasting, but doesn’t know that the imposition of the tax will cause output to decrease relative to the no tax equilibrium. The government cannot be sure that the tax will result in.

A

Deadweight loss

104
Q

The market for online movie downloads. If the government impose a tax of three dollars in this market, the deadweight loss will equal.

A

$22.50

105
Q

If economy of Alta Vista, a Imports, a good when the economy is open to trade, the domestic price of the Goodwill be—— the autarky price and domestic consumption will be——-the autarky quantity

A

Less then, greater than

106
Q

The production possibilities for Taiwan in Japan. Both nations were gains from trade one one pair of rain boots trades for.

A

1.5 microchips

107
Q

The term autarky refers to a situation when a country

A

Does not trade with other countries

108
Q

In a single year, Germany can raise 100 tons of weight or produce 1000 boxes of daisies. And the same growing season France country is 50 tons of weight or produce 750 boxes of daisies. From this information we know that.

A

Germany has a comparative advantage in raising wheat

109
Q

The production of computers and cell phones in Canada and the United States. The table describes the production of two goods, computers, and cell phones, and Canada and the United States. Each country has a litter, production possibility frontier with respect to the production of the two cats. The number in each column represent the total numbers of units each country could produce if it used all of its resources to Bruce, the good if each country specializes in a good mood, she has a comparative advantage, then the price of computers in terms of cell phones will be.

A

Between two units of cell phones and three units of cell phones

110
Q

The market for pineapples in Brazil Brazil trades based on compared to Vantage end of the world trade prices day then Brazil has—-in the production of pineapples

A

A comparative advantage

111
Q

Attacks and put it on. Foreign goods is called a.

A

Tariff

112
Q

Japan must give up the production of 100 computers to produce 25 additional cell phones. The opportunity cost of producing for computers is.

A

One cell phone

113
Q

Frances give up the production of 100 times +50 additional sweaters. The opportunity cost of producing for ties is.

A

Two sweaters

114
Q

The market for Swiss watches. Assume that DNS represent domestic man for and supply of Swiss watches. The worlds price PW equals $100 the government imposes a quarter restricting imports 25. Watched the domestic price rises to—— and quota. Rent is equal to the area.——

A

$120,H I

115
Q

When a business harass people, in other countries to perform various tasks—— has occurred

A

Offshore outsourcing

116
Q

If South Korea must give up the production of 75 notebook computers to produce 25 additional cell phone is the opportunity cost of producing for cell phones is

A

12 notebook computers

117
Q

The market for grapes in California and I’ll talk to you. The price of grapes in California is PA when the economy is open to trade the price falls to PW and the change in consumer surplus will be given by the area.

A

NOP

118
Q

The United Kingdom must give up the production of 300 motorcycles to produce 15 additional convertible, Jaguars with the same resources. The opportunity cost of producing 100 motorcycles is.

A

Five convertible Jaguars

119
Q

The production possibility for Taiwan in Japan opportunity, cost of producing one pair of rain boots, in Taiwan is—— micro chips, will the opportunity cost of producing one pair of rain boots in Japan is—— micro chips

A

0.5, two.

Microeconomics (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions