Question 1

Russian state television has imposed a temporary ban on all TV commercials.Your firm specializes in exports to Russia.Ninety percent of its sales consist of consumer goods shipped to Russia.Your supervisor wants to know the likely impact of the ban on your firm's operations.What do you tell her?

Accepted Answer

A ban on advertising will like...

Question 2

The federal government recently decided to raise the excise tax on hard liquor.
a.Graphically illustrate the effects of this tax on the market for hard liquor.
b.Would a $1 increase in the excise tax on liquor increase the equilibrium price of liquor by $1?
 
c.How would the excise tax on hard liquor affect a beer distributor?

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> a.As can be seen from the figure shown ...

Question 3

Under a price ceiling,the full economic price is:

Accepted Answer

A)   the dollar price paid to the firm.
B)   the opportunity cost of not being able to buy a good when a consumer needs it.
C)   lower than the free-market price.
D)   higher than the free-market price.E) B) and D)
F) A) and C)

Question 4

If good A is an inferior good,an increase in income leads to:

Accepted Answer

A)  a decrease in the demand for good B.
B)  a decrease in the demand for good A.
C)  an increase in the demand for good A.
D)  no change in the quantity demanded for good A.E) C) and D)
F) All of the above

Question 5

Which of the following pairs of goods are probably complements?

Accepted Answer

A)   Televisions and roller skates
B)   Frozen yogurt and ice cream
C)   Steak and chicken
D)   Hamburgers and ketchupE) A) and C)
F) B) and C)

Question 6

Suppose the supply of good X is given by Qsx = 10 + 2Px.How many units of good X are produced if the price of good X is 20?

Accepted Answer

A)   10
B)   20
C)   30
D)   None of the statements associated with this question are correct.E) A) and B)
F) A) and C)

Question 7

Other things held constant,the lower the price of a good:

Accepted Answer

A)   the lower the producer surplus.
B)   the greater the producer surplus.
C)   the higher the supply.
D)   the lower the supply.E) A) and B)
F) B) and D)

Question 8

Persuasive advertising influences demand by:

Accepted Answer

A)   providing information about the availability of a product.
B)   offering reduced prices for the product.
C)   altering the underlying tastes of consumers.
D)   None of the statements are correct.E) All of the above
F) B) and C)

Question 9

Which of the following is NOT a supply shifter?

Accepted Answer

A)   Level of technology
B)   Prices of inputs
C)   Average income level
D)   WeatherE) A) and D)
F) A) and C)

Question 10

Suppose both supply and demand decrease.What effect will this have on price?

Accepted Answer

A)   It will fall.
B)   It will rise.
C)   It may rise or fall.
D)   It will remain the same.E) A) and D)
F) B) and D)

Question 11

Suppose that good X is a substitute for good Y.Then an increase in the price of good Y leads to

Accepted Answer

A)   an increase in the demand for good X.
B)   a decrease in the demand for good X.
C)   a decrease in the supply of good X.
D)   an increase in the supply of good X.E) A) and D)
F) B) and C)

Question 12

As additional firms enter an industry,the market supply curve:

Accepted Answer

A)   shifts to the right.
B)   shifts to the left.
C)   remains the same.
D)   None of the statements associated with this question are correct.E) B) and C)
F) A) and B)

Question 13

The law of demand states that,holding all else constant:

Accepted Answer

A)   as price falls, demand will fall also.
B)   as price rises, demand will also rise.
C)   price has no effect on quantity demanded.
D)   as price falls, quantity demanded rises.E) None of the above
F) B) and C)

Question 14

Recently,the Brazilian Association of Citrus Exports (Abecitrus)announced that orange production would be down 25 percent this year because of poor weather conditions,disease,and tree stress resulting from three straight bumper crops.What effect will the decreased production of oranges have on the demand for tomato juice?

Accepted Answer

A 25 percent reduction in the production...

Question 15

Suppose the supply curve for a product is given by Qsx = −300 + 4Px + 2Pz and Px = 30,Pz = 40.
a.How much X is produced?
b.What is the inverse supply curve for X given the above information?
c.Graph this supply curve.
d.Show what happens to this supply curve if the price of Z goes up by $10.

Accepted Answer

a.Q^s_x = −300 + 4(30)+ 2(40)= −100.Since ne...

Question 16

If the price of good X becomes lower,then the level of consumer surplus becomes

Accepted Answer

A)   lower.
B)   higher.
C)   unchanged.
D)   lower in the short run but higher in the long run.E) B) and D)
F) B) and C)

Question 17

Which of the following are least likely to be substitutes?

Accepted Answer

A)   Chicken and beef
B)   Cars and trucks
C)   Automobile and housing
D)   Automobile and gasolineE) B) and C)
F) B) and D)

Question 18

Suppose the market supply for good X is given by QXS = −100 + 5PX.If the equilibrium price of X is $100 per unit,then producers' revenue from X is:

Accepted Answer

A)   $100.
B)   $20,000.
C)   $40,000.
D)   This cannot be determined from the information contained in the question.E) A) and D)
F) A) and C)

Question 19

Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM.If ay is positive,then:

Accepted Answer

A)   goods y and x are complements.
B)   goods y and x are inferior goods.
C)   goods y and x are normal goods.
D)   goods y and x are substitutes.E) A) and D)
F) None of the above

Question 20

Producer surplus is the:

Accepted Answer

A)   area above the supply curve but below the demand curve.
B)   area above the supply curve but below the market price of the good.
C)   minimum amount required by a producer for producing the good.
D)   maximum amount a producer can collect from consumers.E) B) and C)
F) A) and C)

Exam 2: Market Forces: Demand and Supply

As additional firms enter an industry,the market supply curve:

Correct Answer
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The law of demand states that,holding all else constant:

Correct Answer
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Producer surplus is the:

Correct Answer
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Suppose the market supply for good X is given by Q_X^S = −100 + 5P_X.If the equilibrium price of X is $100 per unit,then producers' revenue from X is:

Correct Answer
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If the price of good X becomes lower,then the level of consumer surplus becomes

Correct Answer
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Correct Answer
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A 25 percent reduction in the production...
View Answer

Which of the following is NOT a supply shifter?

Correct Answer
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Which of the following pairs of goods are probably complements?

Correct Answer
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Suppose the supply curve for a product is given by Q^s_x = −300 + 4P_x + 2P_z and P_x = 30,P_z = 40. a.How much X is produced? b.What is the inverse supply curve for X given the above information? c.Graph this supply curve. d.Show what happens to this supply curve if the price of Z goes up by $10.

Correct Answer
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a.Q^s_x = −300 + 4(30)+ 2(40)= −100.Since ne...
View Answer

Persuasive advertising influences demand by:

Correct Answer
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Correct Answer
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a.As can be seen from the figure shown ...
View Answer

Russian state television has imposed a temporary ban on all TV commercials.Your firm specializes in exports to Russia.Ninety percent of its sales consist of consumer goods shipped to Russia.Your supervisor wants to know the likely impact of the ban on your firm's operations.What do you tell her?

Correct Answer
verified
A ban on advertising will like...
View Answer

Suppose that good X is a substitute for good Y.Then an increase in the price of good Y leads to

Correct Answer
verified

Suppose both supply and demand decrease.What effect will this have on price?

Correct Answer
verified

Which of the following are least likely to be substitutes?

Correct Answer
verified

Other things held constant,the lower the price of a good:

Correct Answer
verified

Suppose the demand for good X is given by Q^d_x = 10 + a_xP_x + a_yP_y + a_MM.If a_y is positive,then:

Correct Answer
verified

Under a price ceiling,the full economic price is:

Correct Answer
verified

If good A is an inferior good,an increase in income leads to:

Correct Answer
verified

Suppose the supply of good X is given by Q^s_x = 10 + 2P_x.How many units of good X are produced if the price of good X is 20?

Correct Answer
verified

Exam 2: Market Forces: Demand and Supply

As additional firms enter an industry,the market supply curve:

Correct AnswerverifiedShow Answer

The law of demand states that,holding all else constant:

Correct AnswerverifiedShow Answer

Producer surplus is the:

Correct AnswerverifiedShow Answer

Suppose the market supply for good X is given by QXS = −100 + 5PX.If the equilibrium price of X is $100 per unit,then producers' revenue from X is:

Correct AnswerverifiedShow Answer

If the price of good X becomes lower,then the level of consumer surplus becomes

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA 25 percent reduction in the production...View AnswerShow Answer

Which of the following is NOT a supply shifter?

Correct AnswerverifiedShow Answer

Which of the following pairs of goods are probably complements?

Correct AnswerverifiedShow Answer

Suppose the supply curve for a product is given by Qsx = −300 + 4Px + 2Pz and Px = 30,Pz = 40. a.How much X is produced? b.What is the inverse supply curve for X given the above information? c.Graph this supply curve. d.Show what happens to this supply curve if the price of Z goes up by $10.

Correct Answerverifieda.Qsx = −300 + 4(30)+ 2(40)= −100.Since ne...View AnswerShow Answer

Persuasive advertising influences demand by:

Correct AnswerverifiedShow Answer

Correct Answerverified a.As can be seen from the figure shown ...View AnswerShow Answer

Russian state television has imposed a temporary ban on all TV commercials.Your firm specializes in exports to Russia.Ninety percent of its sales consist of consumer goods shipped to Russia.Your supervisor wants to know the likely impact of the ban on your firm's operations.What do you tell her?

Correct AnswerverifiedA ban on advertising will like...View AnswerShow Answer

Suppose that good X is a substitute for good Y.Then an increase in the price of good Y leads to

Correct AnswerverifiedShow Answer

Suppose both supply and demand decrease.What effect will this have on price?

Correct AnswerverifiedShow Answer

Which of the following are least likely to be substitutes?

Correct AnswerverifiedShow Answer

Other things held constant,the lower the price of a good:

Correct AnswerverifiedShow Answer

Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM.If ay is positive,then:

Correct AnswerverifiedShow Answer

Under a price ceiling,the full economic price is:

Correct AnswerverifiedShow Answer

If good A is an inferior good,an increase in income leads to:

Correct AnswerverifiedShow Answer

Suppose the supply of good X is given by Qsx = 10 + 2Px.How many units of good X are produced if the price of good X is 20?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Suppose the market supply for good X is given by Q_X^S = −100 + 5P_X.If the equilibrium price of X is $100 per unit,then producers' revenue from X is:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A 25 percent reduction in the production...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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a.Q^s_x = −300 + 4(30)+ 2(40)= −100.Since ne...
View Answer

Correct Answer
verified

Correct Answer
verified
a.As can be seen from the figure shown ...
View Answer

Correct Answer
verified
A ban on advertising will like...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Suppose the demand for good X is given by Q^d_x = 10 + a_xP_x + a_yP_y + a_MM.If a_y is positive,then:

Correct Answer
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Correct Answer
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Correct Answer
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Suppose the supply of good X is given by Q^s_x = 10 + 2P_x.How many units of good X are produced if the price of good X is 20?

Correct Answer
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