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exam 3 micro economics

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Question;Assignment 3-03Question 1 of 20 5.0 PointsAt the market equilibrium, resources are allocated efficiently because __________.A. the marginal cost of producing another unit is equal to zeroB. the price buyers pay accurately reflects the marginal cost of the resources used to produce the goodC. the price buyers pay is greater than sellers' willingness to sellD. all of the aboveQuestion 2 of 20 5.0 PointsIf the government sets a minimum price above the equilibrium price for soybeans, which of the following statements will be correct?A. There will be an efficient level of output produced.B. There will be excess supply.C. There will be excess demand.D. all of the aboveQuestion 3 of 20 5.0 PointsA ban on imported avocados would result in __________.A. an increase in total surplus because domestic production will increaseB. no change in total surplus because the reduction in consumer surplus will offset the increase in producer surplusC. a reduction in total surplus because a deadweight loss is createdD. It is impossible to say what will happen to total surplus.Question 4 of 20 5.0 PointsIf the government sets a maximum price for insulin below the equilibrium price, __________.A. there will be an efficient level of insulin producedB. there will be excess supply of insulinC. total surplus will be lower than it would be at the market equilibrium priceD. total surplus will be greater than it would be at the market equilibrium priceQuestion 5 of 20 5.0 PointsJody's bakery makes cakes and would be willing to sell each cake for $12.50. If Jody's bakery sells 10 cakes for $13 each, the total producer surplus for Jody's bakery would be equal to __________.A. $5.00B. $12.50C. $125.00D. $130.00Question 6 of 20 5.0 PointsIn the market equilibrium, with a price of $500 there are 2000 apartments. If the government decides to enact a rent control policy, with a maximum price of $400, it reduces the quantity to 1500 apartments. Due to the rent control decreasing the total surplus of the market, the policy generates a(n) __________.A. excess supplyB. equilibriumC. higher priceD. deadweight lossQuestion 7 of 20 5.0 PointsIf the government imposes a maximum price for milk that is above the equilibrium price __________.A. this maximum price for milk will have no economic impactB. quantity demanded of milk will be less than quantity suppliedC. demand for milk will be greater than supplyD. the available milk supply will have to be rationedQuestion 8 of 20 5.0 PointsIf the market price of salmon is $8.99 per pound but the government will not allow salmon farmers to charge more than $4.99 per pound, which of the following will happen?A. The supply curve for salmon will shift to the left.B. There will be an excess demand for salmon.C. There will be an excess supply of salmon.D. The market will be in equilibrium at a price of $4.99.Question 9 of 20 5.0 PointsThe conclusion that the level of output is efficient at the market equilibrium rests on all of the following assumptions EXCEPT that __________.A. buyers and sellers are well-informedB. there are no external costs or benefitsC. the government regulates price and outputD. the market is perfectly competitiveQuestion 10 of 20 5.0 PointsThe difference between the maximum amount a person is willing to pay for a good and its current market price is known as __________.A. the paradox of valueB. profitsC. revealed preferencesD. consumer surplusQuestion 11 of 20 5.0 PointsMary has an old house built in 1950 that she would be willing to sell for $100,000. If someone offers to buy her house for $110,000, Mary's producer surplus would be equal to __________.A. $5,000B. $10,000C. $55,000D. $100,000Question 12 of 20 5.0 PointsAssume that production costs rise and demand remains constant. The equilibrium price will __________ and the producer surplus will __________.A. increase, increaseB. increase, decreaseC. decrease, decreaseD. decrease, increaseQuestion 13 of 20 5.0 PointsLaura makes hand-made jewelry and she would be willing to sell pairs of earrings for $50. If Laura sells each pair of earrings for $65, her producer surplus per pair of earrings sold would be equal to __________.A. $115B. $65C. $15D. $50Question 14 of 20 5.0 PointsTom would be willing to pay a maximum of $2,500 to attend the Super Bowl this year, and he can buy a ticket for $2,050. His consumer surplus is __________.A. $25B. $50C. $275D. $450Question 15 of 20 5.0 PointsAssume that Crystal's demand for handbags remains constant, but the price of handbags increases. Crystal's consumer surplus __________.A. decreasesB. increasesC. remains constantD. may increase or decrease depending on the amount of the price decreaseTaxes may cause deadweight losses because __________.A. they transfer purchasing power from buyers to the governmentB. they lower the surplus in the marketC. they increase consumer surplus at the expense of producer surplusD. they transfer purchasing power from sellers to the governmentQuestion 17 of 20 5.0 PointsYou would be willing to pay a maximum of $1,000 for an airplane ticket to London during the summer, and you can buy an airplane ticket for $890. Your consumer surplus is __________.A. $90B. $190C. $110D. $100Question 18 of 20 5.0 PointsSuppose that you are willing to pay $25 for a new shirt and the market price is $35. In this case __________.A. you will not buy the goodB. you will buy the good and receive a consumer surplus of $5C. you will buy the good and receive a consumer surplus of ?$10D. you will buy the good and receive a consumer surplus of ?$35Question 19 of 20 5.0 PointsRecall the application on rent control and mismatches. Under rent control, the government sets a maximum price for housing, decreasing the quantity supplied and the total value of the market. Rent control and other maximum prices cause __________ and possibly __________.A. inefficiency, mismatchesB. efficiency: mismatchesC. mismatches: equilibriumD. none of the aboveQuestion 20 of 20 5.0 PointsIf the equilibrium price of gasoline is $2.75 per gallon and the government will not allow oil companies to charge more than $2.00 per gallon, which of the following will happen?A. Demand must eventually decrease so that the market will come into equilibrium at a price of $2.00.B. Supply must eventually increase so that the market will come into equilibrium at a price of $2.00.C. Total surplus in the market will be lower than it would be if the price was $2.75 per gallon.D. The market will be in equilibrium at a price of $2.00.

 

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