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1 | |
Answer the next question on the basis of the following diagram:
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Refer to the diagram. We would model a decrease in demand in this market by: |
| | A) | shifting the downward-sloping line to the right, increasing the equilibrium quantity |
| | B) | shifting the downward-sloping line to the left, increasing the equilibrium price |
| | C) | shifting the downward-sloping line to the left, decreasing the equilibrium quantity |
| | D) | moving upward and to the left along the downward-sloping line |
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2 | |
Use the following to answer the next question:
| Quantity demanded | Price | | 8,000 | $40 | | 10,000 | 35 | | 12,000 | 30 | | 14,000 | 25 | | 16,000 | 20 |
Refer to the table, which shows the demand schedule for a particular concert being held at a 10,000 seat amphitheatre. If the concert promoters set the ticket price at $35: |
| | A) | 2000 tickets will remain unsold |
| | B) | all the tickets will be sold |
| | C) | ticket scalping will likely emerge |
| | D) | there will be a surplus of 4000 tickets |
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3 | |
An increase in supply of greater magnitude than a simultaneous increase in demand will: |
| | A) | increase both equilibrium price and equilibrium quantity |
| | B) | increase equilibrium quantity but reduce equilibrium price |
| | C) | increase equilibrium price but reduce equilibrium quantity |
| | D) | increase equilibrium quantity but price may either increase or decrease |
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4 | |
Use the following to answer the next question:
| Demand 1 | Demand 2 | Price | | 35,000 | 45,000 | $40 | | 40,000 | 50,000 | 35 | | 45,000 | 55,000 | 30 | | 50,000 | 60,000 | 25 | | 55,000 | 65,000 | 20 |
Refer to the table, which shows two demand schedules for a particular major league baseball game. The team's owners initially set a ticket price of $25, hoping to sell out the 50,000 seat stadium, believing demand was given by schedule 1. However, the team is on the verge of making the playoffs and demand is instead given by schedule 2. At the preset price of $25: |
| | A) | a secondary market will likely emerge in which the price will exceed $25 |
| | B) | a secondary market will likely emerge in which the price will equal $25 |
| | C) | a secondary market will likely emerge in which the price will be below $25 |
| | D) | the game will not sell out |
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5 | |
Answer the next question on the basis of the following diagram:
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Refer to the diagram. S represents the sustainable supply of a commonly held resource and D is its demand. Quantities are in thousands of pounds. In this market: |
| | A) | price will be $5 and the resource will be sustained |
| | B) | there will be a shortage of 8,000 pounds and the resource will be overharvested |
| | C) | there will be a shortage of 12,000 pounds and the resource will be overharvested |
| | D) | there will be a surplus of 12,000 pounds and the resource will be sustained |
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6 | |
Answer the next question on the basis of the following diagram:
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Refer to the diagram. At the equilibrium price and quantity, total producer surplus in this market is: |
| | A) | $4 |
| | B) | $7 |
| | C) | $200 |
| | D) | $350 |
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7 | |
Answer the next question on the basis of the following diagram:
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Refer to the diagram. Allocative efficiency is achieved in this market: |
| | A) | at a price of $13 |
| | B) | at a price of $6 |
| | C) | at an output of 50 units |
| | D) | at an output of 100 units |
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8 | |
Which of the following will unambiguously lead to a higher price? |
| | A) | Both demand and supply increase |
| | B) | Both demand and supply decrease |
| | C) | Demand increases and supply decreases |
| | D) | Demand decreases and supply increases |
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9 | |
True or false: The introduction of a generic drug reduces consumer surplus. |
| | A) | True |
| | B) | False |
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10 | |
Suppose Stephanie sells a compact disc to Kevin for $5, although he would willingly have paid up to $14. If Stephanie would have accepted as little as $2, then: |
| | A) | Kevin experiences a consumer surplus of $9 |
| | B) | Stephanie experiences a consumer surplus of $3 |
| | C) | Stephanie experiences a producer surplus of $12 |
| | D) | there is an efficiency loss of $12 |
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