Econ 202 Exam 2 Practice Problems Principles of Microeconomics Dr. Phillip Miller Multiple Choice Identify the choice that best completes the statement or answers the question. Chapter 6 ____ 1. If a binding price ceiling is imposed on the computer market‚ then a. the quantity of computers demanded will increase. b. the quantity of computers supplied will decrease. c. a shortage of computers will develop. d. All of the above are correct. ____ 2. In response to a shortage caused
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consumer surplus and –D-E in producer
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International Economics‚ 9e (Krugman et al.) Chapter 9 The Instruments of Trade Policy 9.1 Basic Tariff Analysis 1) Specific tariffs are A) import taxes stated in specific legal statutes. B) import taxes calculated as a fixed charge for each unit of imported goods. C) import taxes calculated as a fraction of the value of the imported goods. D) the same as import quotas. E) import taxes calculated based solely on the origin country. Answer: B Page Ref: 192-198 Difficulty: Easy
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Assignment III Chapter 3 2. Draw graphs to illustrate the difference between a decrease in the quantity demanded and a decrease in demand for Mickey Mantle baseball cards. Give a possible reason for change in each graph. Decrease in the quantity demand of Mickey Mantle Baseball cards. The reason is that the price increase. Decrease in demand for Mickey Mantle Baseball cards. The reason may be taste and preferences. 4. Draw graphs to illustrate the difference between a
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adjusted‚ triggering a chain reaction. 3. How does it affects producers and consumers? There are two major effects: 1. Reduced quantity 2. Raised prices. There is a transfer of wealth from consumers to producers. A portion of consumer surplus is shifted to producer surplus and also creates a deadweight loss. When prices increase from p0 to p1 due to price fixing‚ rectangle A‚ from consumer surplus gets shifted to producer surplus. At the same time there is also a deadweight loss of triangles
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is: 50.375 Use the following statements to answer this question: I. When the market price is held above the competitive price level‚ it is possible for the loss in consumer surplus to be fully captured by producers. II. When the market price is held above the competitive level‚ there is no deadweight loss because producer gains exactly equal consumer losses. Select one: a. I and II are true. Incorrect b. I is true and II is false. c. I and II are false. d. II is true and I is false.
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Name:_______________________________ FOUNDATIONS OF COMPETITIVE ANALYSIS HOMEWORK 1 Jenny Ellis‚ Spring 2013 Due date: Thursday April 11‚ in class. Fill in the blanks‚ and briefly show your work 1. A partial income statement from Webfoot Industries‚ Inc. is shown below: Revenues Revenue from sales of goods and services ................ $27‚500‚000 Operating costs and expenses: Cost of products and services sold.............................. $15‚000‚000 Selling expenses .............
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1 . Revenue increases when A. producer surplus increases B. producer surplus decreases C. consumer surplus increases D. consumer surplus decreases Answer : A. producer surplus increases 2 . An increase in the price of an inelastic good A. decreases revenues B. decreases the percentage change in quantity less than the percentage change in price C. increases revenues D. increases the percentage change in quantity more than the percentage change in price Answer: C. increases revenues
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Names____________________ 1. Melissa buys an iPod for $ 120 and gets consumer surplus of $ 80. a. What is her willingness to pay? b. If she had bought the iPod on sale for $ 90‚ what would her consumer surplus have been? c. If the price of an iPod were $ 250‚ what would her consumer surplus have been? 2. An early freeze in California sours the lemon. Explain what happens to consumer surplus in the market for lemons. Explain what happens to consumer surplus in the market for lemonade. Illustrate your answers with
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market can be inefficient from the standpoint of society as a whole. 2. What happens to consumer and producer surplus when the sale of a good is taxed? How does the change in consumer and producer surplus compare to the tax revenue? Consumer surplus is money buyers would be willing to spend to buy a good above what they must pay at the current price; and producer surplus is money the producers are making at the current price above what they would be willing to accept to still stay in the market
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