04 Jun Question 1. The buyer side of the market is known as the:
Question
1.
The buyer side of the market is known as the:
income side.
demand side.
supply side.
seller side.
Changes in the price of good A lead to a change in:
demand of good A.
demand of good B.
the quantity demanded of good A.
the quantity demanded of good B.
If good A is an inferior good, an increase in income leads to:
a decrease in the demand for good B.
a decrease in the demand for good A.
an increase in the demand for good A.
no change in the quantity demanded of good A.
Which of the following pairs of goods are probably complements?
Televisions and roller skates.
Frozen yogurt and ice cream.
Steak and chicken.
Hamburgers and ketchup.
Persuasive advertising influences demand by:
providing information about the availability of a product.
offering reduced prices for the product.
altering the underlying tastes of consumers.
none of the statements are correct.
Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM. From the law of demand we know that ax will be:
less than zero.
greater than zero.
zero.
none of the statements associated with this question are correct.
Producer surplus is measured as the area
below the demand curve and above the market price.
above the demand curve and below the market price.
above the supply curve and below the market price.
below the supply curve and above the market price.
Suppose the market demand for good X is given by QXd = 20 – 2PX. If the equilibrium price of X is $5 per unit, then the total value a consumer receives from consuming the equilibrium quantity is
$100.
$75.
$50.
$25.
Other things held constant, the higher the price of a good
the lower the producer surplus.
the greater the producer surplus.
the higher the supply.
the lower the supply.
Consider a market characterized by the following inverse demand and supply functions: PX = 40 – 4QX and PX = 10 + 2QX.
Compute the surplus received by consumers and producers.
rev: 03_10_2014_QC_46551
$25 and $25, respectively.
$20 and $40, respectively.
$40 and $20, respectively.
$50 and $25, respectively.
Consumer surplus is
the value consumers get from a supplier.
the value consumers do not pay because of a discount by supplier.
the value consumers get from a good but do not pay for.
equal to the amount consumers pay for a good.
Producer surplus is the
area above the supply curve but below the demand curve.
area above the supply curve but below the market price of the good.
minimum amount required by a producer for producing the good.
maximum amount a producer can collect from consumers.
If supply increases, then the
supply curve shifts to the left.
equilibrium price goes down.
equilibrium quantity goes down.
demand curve shifts to the right.
If a shortage exists in a market, the natural tendency is for:
demand to increase.
price to increase.
quantity supplied to decrease.
no change in the market.
If steak is a normal good, what do you suppose would happen to price and quantity during an economic recession?
Price would increase and quantity decrease.
Price and quantity would both increase.
Price and quantity would both decrease.
Price would decrease and quantity increase.
Consider a market characterized by the following demand and supply conditions: PX = 15 – 2QX and PX = 3 + 2QX. The
equilibrium price and quantity are, respectively,
$3 and 9 units.
$9 and 3 units.
$12 and 4 units.
$4 and 12 units.
Suppose market demand and supply are given by Qd = 300 – 4P and QS = -50 + 3P. The equilibrium price is:
$35.
$40.
$50.
$60.
An ad valorem tax causes the supply curve to:
shift to the right.
become flatter.
become steeper.
shift to the left.
Suppose market demand and supply are given by Qd = 100 – 2P and QS = 5 + 3P. If a price ceiling of $15 is imposed,
there will be a surplus of 40 units.
there will be neither a surplus or shortage.
there will be a shortage of 40 units.
there will be a shortage of 20 units.
Suppose market demand and supply are given by Qd = 100 – 2P and QS = 5 + 3P. If a price floor of $30 is set, what will be size of the resulting surplus?
0.
45.
30.
55.
An ad valorem tax shifts the supply curve
down by the amount of the tax.
up by the amount of the tax.
by rotating it counter-clockwise.
by rotating it clockwise.
Consider a market characterized by the following inverse demand and supply functions: PX = 10 – 2QX and PX = 2 + 2QX. An
$8 per unit price floor will result in a
rev: 10_09_2014_QC_55537
shortage of 1 unit.
surplus of 5 units.
shortage of 3 units.
surplus of 3 units.
A price ceiling is
the minimum legal price that can be charged in a market.
the maximum legal price that can be charged in a market.
above the initial equilibrium price.
equal to the initial equilibrium price.
A floor price is
rev: 10_17_2014_QC_56862
the minimum legal price that a firm can charge.
the maximum legal price that can be charged in a market.
below the initial market equilibrium price.
equal to the initial market equilibrium price.
An excise tax of $1.00 per gallon of gasoline placed on the suppliers of gasoline would shift the supply curve
down by $1.00.
down by more than $1.00.
up by $1.00.
up by less than $1.00.
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