ECON 201 – An increase in the demand for corn is more than offset by an increase

1. An increase in the demand for corn is more than offset by an increase in its supply. As a result the equilibrium price will __________ and the equilibrium quantity will ___________.a.increase, decreaseb. increase, increasec. decrease, increased. decrease, decrease2. If a price ceiling is set above the equilibrium price in a marketa. rationing will be necessary.b. surpluses of the commodity will develop.c. the quantity demanded will exceed the quantity supplied.d. the quantity supplied will equal the quantity demanded.3. PriceQuantity DemandedQuantity Supplied$ 60100400 50140340 40180280 30220220 20260160 10300100The government’s introduction of a guaranteed price floor of $50 will result ina. a surplus of 200 units.b. a shortage of 200 units.c. no shortage or surplus.d. an unstable market.4. A large increase in the supply of HD-TV sets occurs simultaneously with a smaller decrease in its demand. As a result the equilibrium price will __________ and the equilibrium quantity will __________.a.increase, decreaseb. increase, increasec. decrease, decreased. decrease, increase5. A tax on buyers will cause the ________ schedule to shift ________.a. demand, downb. demand, upc. supply, downd. supply, up6.Price per UnitQuantity Demanded per YearQuantity Supplied per Year$ 52,000 0 101,800 300 151,600 600 201,400 900 251,2001,200 301,0001,500There will be a shortage whenever the price isa. higher than $25.b. higher than $30.c. lower than $25.d. equals $25.7. The minimum acceptable price for a product that producer Sam is willing to receive is $15. The price he could get for the product in the market is $18. How much is Sam’s producer surplus?a. $3b. $33c. $45d. $2708.UnitsMaximum Willingness to PayMarket PriceMinimum Acceptable Price1$14$8$ 22 12 8 43 10 8 64 8 8 85 6 8 106 4 8 14If output is at 3 units, then the market ____ allocative efficiency and _____ productive efficiencya. achieves, achievesb. achieves, does not achievec. does not achieve, achievesd. does not achieve, does not achieve9.UnitsMaximum Willingness to PayMarket PriceMinimum Acceptable Price1$14$8$ 22 12 8 43 10 8 64 8 8 85 6 8 106 4 8 14At what level of output is allocative efficiency achieved?a. 2b. 3c. 4d. 510. ProducerMinimum Acceptable Product PriceActual Product Price (Equilibrium Price)Kimberly$ 6$13Drake 7 13Nicki 9 13Victoria 11 13Which producer has a producer surplus of $4?a. Victoriab. Kimberlyc. Draked. Nicki11. At the output level defining allocative efficiencya. the areas of consumer and producer surplus necessarily are equal.b. marginal benefit exceeds marginal cost by the greatest amount.c. consumer surplus exceeds producer surplus by the greatest amount.d. the maximum willingness to pay for the last unit of output equals the minimum acceptable price of that unit of output. 12. When a competitive market achieves allocative efficiency, it is implied thata. the combined consumer and producer surplus is maximized.b. the marginal benefit of having the product is greater than the marginal cost.c. the buyers are getting the maximum consumer surplus from the product.d. the quantity demanded is lower than the quantity supplied.13. Charlie is willing to pay $10 for a T-shirt that is priced at $9. If Charlie buys the T-shirt, then his consumer surplus isa. $19.b. $1.c. $90.d. $0.90.14.PriceQuantity Supplied$1010 89 68 47 26Over the $6-$4 price range, supply isa. zerob. elasticc.nonresponsived. inelastic 15. To economists, the main differences between “the short run” and “the long run” are thata. law of diminishing returns applies in the long run, but not in the short run.b. the short run all resources are fixed, while in the long run all resources are variable.c. fixed inputs are more important to decision making in the long run than they are in the short rund. the long run all resources are variable, while in the short run at least one resource is fixed16. The demand schedules for such products as eggs, bread, and electricity tend to bea. perfectly price elastic.b. of unit price elasticityc. relatively price inelastic.d. relatively price elastic. 17. The price elasticity of demand of a straight-line demand curve isa. elastic in high-price ranges and inelastic in low-price ranges.b. elastic but does not change at various points on the curve.c. inelastic but does not change at various points on the curved. 1 at all points on the curve. 18. Price elasticity of demand is generallya. greater in the long run than in the short run.b. greater in the short run than in the long run.c. the same in both the short run and the long run.d. greater for “necessities” than it is for “luxuries.”19.Price per UnitQuantity Demanded per Unit of Time$2012 1817 1620 1424 1230 1036 840 644 448Over which price range is the demand unit-elastic?a. $18-$16b. $16-$14c. $14-$12d. $12-$1020. The cross elasticity of demand for product X with respect to the price of product Y is 2. It can be inferred that X and Y area. substitute products.b. secondary products.c. better products.d. unrelated products.decrease, increase