D All of the above are A sellers costs are B consumer surplus is C total surplus is D producer surplus is A Producer surplus refers to a situation in which there are B Consumer surplus refers to a situation in which there are C Total surplus is measured as the area below the demand Which of the following is correct more sellers than buyers in a market more buyers than sellers in a market curve and above the supply curve up to the equilibrium quantity correct 2 We can say that the allocation of resources is efficient if minimized maximized maximized maximized 3 Efficiency in a market is achieved when cost per unit is maximized any unit of the good after evaluating buyers willingness to pay and sellers costs 4 At the equilibrium price of a good the good will be purchased by those buyers who the good than price A all firms are producing the good at the same low B the sum of producer surplus and consumer surplus C no buyer is willing to pay more than the equilibrium price for D a social planner intervenes and sets the quantity of output A have the money to buy B value the good less C consider the good a D value the good more necessity than price 5 At the equilibrium price of a good the good will be sold by those sellers than price price good first 6 A whose cost is more B whose cost is less than C that can produce the D enter the market Figure 1 Refer to Figure 1 At the equilibrium price producer surplus is A 300 B 450 C 125 D 150 7 Refer to Figure 1 At the equilibrium price total surplus is A 125 B 250 A B C D C 450 D 500 8 Refer to Figure 1 If the government imposes a price ceiling of 55 in this market then total surplus will be 187 50 125 00 266 67 250 00 9 Refer to Figure 1 If the government imposes a price floor of 55 in this market then total surplus will be price floor price floor price floor price floor 10 Refer to Figure 1 If the government imposes a price floor of 55 in this market then total surplus will be 275 00 187 50 137 50 A 50 00 lower than it would be without the B 125 00 lower than it would be without the C 62 50 lower than it would be without the D 100 00 higher than it would be without the A B C D 125 00 11 Figure 2 Refer to Figure 2 Total surplus can be measured as the area A JRL B JNL C JNK D JNML 12 Which of the following statements is correct to be paid more to be paid less to be paid more to be paid less 13 A Buyers always want to pay less and sellers always want B Buyers always want to pay less and sellers always want C Buyers always want to pay more and sellers always want D Buyers always want to pay more and sellers always want Table 1 Buyer Willingness To Pay 150 00 Calvin Sam 135 00 Andrew 120 00 100 00 Lori Refer to Table 1 If the price of the product is 90 then who would be willing to purchase the product A Calvin Sam Andrew and Lori B Calvin and Sam C Calvin Sam and Andrew D Calvin 14 Figure 3 Refer to Figure 3 At the equilibrium price consumer surplus is A 1 225 B 1 050 C 1 575 D 2 450 15 Refer to Figure 3 If the government imposes a price floor of 100 in this market then consumer surplus will decrease by A 150 B 650 C 675 D 325 16 Suppose the tax on automobile tires is increased so that the tax goes from being a medium tax to being a large tax As a result it is likely that loss decreases loss decreases loss increases loss increases 17 In the market for widgets the supply curve is the typical upward sloping straight line and the demand curve is the typical downward sloping straight line The equilibrium quantity in the market for widgets is 250 per month when there is no tax Then a A tax revenue increases and the deadweight B tax revenue decreases and the deadweight C tax revenue increases and the deadweight D tax revenue decreases and the deadweight tax of 6 per widget is imposed As a result the government is able to raise 750 per month in tax revenue We can conclude that the after tax quantity of widgets is A 100 per month B 75 per month C 150 per month D 125 per month 18 The vertical distance between points A and B represents a tax in Figure 4 the market A 20 and total surplus with the tax B 10 and total surplus with the C 10 and total surplus with the D 20 and total surplus with the Refer to Figure 4 Total surplus without the tax is is 2 50 tax is 7 50 tax is 2 50 tax is 7 50 19 Refer to Figure 4 The loss of consumer surplus associated with some buyers dropping out of the market as a result of the tax is A 3 B 4 50 C 0 D 1 50 20 Refer to Figure 4 The loss of consumer surplus for those buyers of the good who continue to buy it after the tax is imposed is A 0 B 4 50 C 3 D 1 50 21 Refer to Figure 4 The loss of producer surplus associated with some sellers dropping out of the market as a result of the tax is A 2 B 0 C 3 D 1 22 A logical starting point from which the study of international trade begins is advantage competitive advantage sometimes enhances the economic welfare of the society A the principle of comparative B the recognition that not all markets are C the principle of absolute D the recognition that government intervention in markets A Which argument for restricting free trade is B Who gains and who loses from free trade C How do the gains from trade compare to D How does international trade affect consumer 23 Which of the following is not an important question for economic policy raised by the experience of the textile industry politically feasible among countries the losses well being 24 Suppose the nation of Canada forbids international trade In Canada you can obtain a hockey stick by trading 5 baseball bats In other countries you can obtain a hockey stick by trading 8 baseball bats These facts indicate that countries in producing hockey sticks hockey sticks countries in producing baseball bats correct 25 When in our analysis of the gains and losses from international trade we assume that a particular country is small we are A assuming the domestic price before trade will continue to prevail once that country is opened up to trade with other countries gains and losses from …