2015 Spring Exam 1

Name: ________________________ Class: ___________________ Date: __________
ID: B
2015 Spring Exam 1
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____
1. Ch.4 Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per
dozen. We would expect a
a. surplus to exist and the market price of roses to decrease.
b. shortage to exist and the market price of roses to increase.
c. shortage to exist and the market price of roses to decrease.
d. surplus to exist and the market price of roses to increase.
Table 3-4
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a
constant rate.
Farmer
Rancher
Labor Hours Needed
to Make 1 Pound of
Meat
Potatoes
8
2
3
6
Pounds Produced
in 24 Hours
Meat
Potatoes
3
12
8
4
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2. Ch.3 Refer to Table 3-4. The rancher has an absolute advantage in the production of
a. potatoes.
b. both goods.
c. meat.
d. neither good.
____
3. Ch.3 Refer to Table 3-4. The rancher has a comparative advantage in the production of
a. neither good.
b. meat.
c. both goods.
d. potatoes.
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4. Ch.3 Refer to Table 3-4. The opportunity cost of 1 pound of potatoes for the rancher is
a. 1/2 pound of meat.
b. 6 hours of labor.
c. 1/2 hour of labor.
d. 2 pounds of meat.
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Name: ________________________
ID: B
Figure 8-1
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5. Ch.8 Refer to Figure 8-1. Suppose the government imposes a tax of P' - P'''. The consumer surplus after the
tax is measured by the area
a. J.
b. J+K+I.
c. M.
d. L+M+Y.
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Name: ________________________
ID: B
Figure 3-2
Peru’s Production Possibilities Frontier
____
6. Ch.3 Refer to Figure 3-2. Suppose Peru decides to increase its production of emeralds by 2. What is the
opportunity cost of this decision?
a. 30 rubies
b. 120 rubies
c. 40 rubies
d. 60 rubies
Figure 6-8
____
7. Ch.6 Refer to Figure 6-8. If the government imposes a price ceiling of $2 on this market, then there will be
a. a shortage of 45 units of the good.
b. a shortage of 85 units of the good.
c. no shortage of the good.
d. a shortage of 60 units of the good.
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Name: ________________________
ID: B
Figure 5-14
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8. Ch.5 Refer to Figure 5-14. Along which of these segments of the supply curve is supply most elastic?
a. CD
b. AB
c. DH
d. GH
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9. Ch.5 Refer to Figure 5-14. Using the midpoint method, what is the price elasticity of supply between points
C and D?
a. 0.21
b. 0.29
c. 0.73
d. 1.36
____ 10. Ch.4 Which of the following changes would not shift the demand curve for a good or service?
a. a change in the price of the good or service
b. a change in expectations about the future price of the good or service
c. a change in income
d. a change in the price of a related good or service
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Name: ________________________
ID: B
Figure 7-20
____ 11. Ch.7 Refer to Figure 7-20. At equilibrium, total surplus is
a. $72.
b. $144.
c. $108.
d. $36.
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Name: ________________________
ID: B
Figure 9-13
____ 12. Refer to Figure 9-13. The price and domestic quantity demanded after trade are
a. $14 and 600.
b. $8 and 900.
c. $14 and 900.
d. $8 and 300.
Figure 6-21
____ 13. Ch.6 Refer to Figure 6-22. How much tax revenue does this tax generate for the government?
a. $120
b. $250
c. $300
d. $15
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Name: ________________________
ID: B
Table 2-3
Production Possibilities for Libraryland
Books
400
300
200
100
0
Magazines
0
200
350
450
500
____ 14. Ch.2 Refer to Table 2-3. What is the opportunity cost to Libraryland of increasing the production of books
from 200 to 300?
a. 150 magazines
b. 100 magazines
c. 350 magazines
d. 200 magazines
Figure 8-4
The vertical distance between points A and B represents a tax in the market.
____ 15. Ch.8 Refer to Figure 8-4. The amount of deadweight loss as a result of the tax is
a. $490.
b. $105.
c. $210.
d. $600.
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Name: ________________________
ID: B
____ 16. Ch.8 Refer to Figure 8-4. The tax results in a loss of producer surplus that amounts to
a. $90.
b. $45.
c. $210.
d. $255.
Figure 2-5
____ 17. Ch.2 Refer to Figure 2-5. The opportunity cost of this economy moving from point A to point C is
a. 125 soccer balls and 240 sweaters.
b. 75 soccer balls.
c. 240 sweaters.
d. 125 soccer balls.
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Name: ________________________
ID: B
Figure 2-4
____ 18. Ch.2 Refer to Figure 2-4. If this economy devotes all of its resources to the production of notepads, then it
will produce
a. 0 notepads and 40 lamps.
b. 70 notepads and 0 lamps.
c. 70 notepads and 40 lamps.
d. 35 notepads and 20 lamps.
Figure 9-4. The domestic country is Nicaragua.
____ 19. Refer to Figure 9-4. With trade, Nicaragua
a. imports 150 calculators.
b. imports 250 calculators.
c. exports 100 calculators.
d. exports 250 calculators.
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Name: ________________________
ID: B
____ 20. Ch.4 Good X and good Y are substitutes. If the price of good Y increases, then the
a. demand for good X will decrease.
b. quantity demanded of good X will decrease.
c. quantity demanded of good X will not change.
d. demand for good X will increase.
Figure 7-8
____ 21. Ch.7 Refer to Figure 7-8. Which area represents producer surplus when the price is P1?
a. DGH
b. ACH
c. ABGD
d. BCG
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Name: ________________________
ID: B
Figure 6-14
The vertical distance between points A and B represents the tax in the market.
____ 22. Ch.6 Refer to Figure 6-14. The per-unit burden of the tax on sellers is
a. $8.
b. $24.
c. $6.
d. $10.
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Name: ________________________
ID: B
Figure 7-18
____ 23. Ch.7 Refer to Figure 7-18. At the equilibrium price, consumer surplus is
a. $1,280.
b. $1,120.
c. $480.
d. $640.
____ 24. Assume, for Canada, that the domestic price of tomatoes without international trade is higher than the world
price of tomatoes. This suggests that, in the production of tomatoes,
a. Canada has a comparative advantage over other countries and Canada will export
tomatoes.
b. other countries have a comparative advantage over Canada and Canada will export
tomatoes.
c. Canada has a comparative advantage over other countries and Canada will import
tomatoes.
d. other countries have a comparative advantage over Canada and Canada will import
tomatoes.
____ 25. Ch.4 macaroni and cheese is an inferior good, then an increase in
a. a consumer’s income will cause the demand curve for macaroni and cheese to shift to the
left.
b. a consumer’s income will cause the demand curve for macaroni and cheese to shift to the
right.
c. the price will cause the demand curve for macaroni and cheese to shift to the right.
d. the price will cause the demand curve for macaroni and cheese to shift to the left.
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Name: ________________________
ID: B
____ 26. Ch.5 Tyler purchases 5 pounds of hot dogs per month when his monthly income is $2,000 and 4 pounds of
hot dogs per month when his monthly income is $2,200. Tyler’s income elasticity of demand for hot dogs is
a. -2.33, and hot dogs are an inferior good.
b. 0.43, and hot dogs are a normal good.
c. -0.43, and hot dogs are an inferior good.
d. 2.33, and hot dogs are a normal good.
____ 27. Ch.5 If a 30 percent change in price causes a 15 percent change in quantity supplied, then the price elasticity
of supply is about
a. 2, and supply is elastic.
b. 0.5, and supply is elastic.
c. 2, and supply is inelastic.
d. 0.5, and supply is inelastic.
Figure 2-7
____ 28. Ch.2 Refer to Figure 2-7. Point K represents an outcome in which
a. the economy is using all of its nails to produce hammers.
b. some of the economy’s resources are unemployed.
c. the economy is using all of its resources to produce hammers.
d. production is inefficient.
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Name: ________________________
ID: B
Figure 6-15
____ 29. Ch.6 Refer to Figure 6-15. Suppose a tax of $4 per unit is imposed on this market. How much will buyers
pay per unit after the tax is imposed?
a. $5
b. $3
c. $7
d. $4
Figure 7-3
____ 30. Ch.7 Refer to Figure 7-3. Which area represents the increase in consumer surplus when the price falls from
P1 to P2?
a. ACG
b. ABD
c. BCGD
d. DFG
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