University:
California State University, Northridge
Course:
ECON 160 | Principles of Microeconomics
Academic year:

2019
Views:

212

Pages:

11
Author:

Leilani Contreras

Introduction to Microeconomics Instructor: PRACTICE MIDTERM III Indicate the answer choice that best completes the statement or answers the question. 1. Consumer surplus. a. is the amount a buyer pays for a good minus the amount the buyer is willing to pay for it. b. is represented on a supply-demand graph by the area below the price and above the demand curve. c. measures the benefit sellers receive from participating in a market. d. measures the benefit buyers receive from participating in a market. Figure 7-24 Price 22 20 Supply Demand 10 11 Quantity 2. Refer to Figure 7-24. If the government imposes a price ceiling at $12, then producer surplus is a. CDI. b. BDF. c. BCIF. d. HGCD. 3. Refer to Figure 7-24. At equilibrium, total surplus is a. $36. b. $54. c. $18. d. $108. 4. Refer to Figure 7-24. At equilibrium, consumer surplus is measured by the area a. AHG. b. AFB. c. ABD. d. BDF. Figure 7-22 ↑ Price 110 100 90 00 70 60 45 30 20 Supply Demand 20 60 70 80 90 100 110 120 130 140 150 160 170 Quantity 5. Refer to Figure 7-22. The efficient price is a. $80, and the efficient quantity is 50. b. $70, and the efficient quantity is 60. c. $70, and the efficient quantity is 100. d. $50, and the efficient quantity is 60. 6. Which of the following events would increase producer surplus? a. Sellers' costs stay the same and the price of the good increases. b. Sellers' costs increase and the price of the good stays the same. c. Sellers' costs increase and the price of the good decreases. d. All of the above are correct. 7. Donald produces nails at a cost of $350 per ton. If he sells the nails for $500 per ton, his producer surplus is a. $150. b. $350. c. $500. 31. It does not matter whether a tax is levied on the buyers or the sellers of a good because a. sellers always bear the full burden of the tax. b. buyers always bear the full burden of the tax. c. buyers and sellers will share the burden of the tax. d. None of the above is correct; the incidence of the tax does depend on whether the buyers or the sellers are required to pay the tax. 32. Suppose a tax is imposed on the sellers of fast-food French fries. The burden of the tax will a. fall entirely on the buyers of fast-food French fries. b. fall entirely on the sellers of fast-food French fries. c. be shared equally by the buyers and sellers of fast-food French fries. d. be shared by the buyers and sellers of fast-food French fries but not necessarily equally. 33. A tax placed on buyers of tuxedoes shifts the a. demand curve for tuxedoes downward, decreasing the price received by sellers of tuxedoes and causing the quantity of tuxedoes to increase. b. demand curve for tuxedoes downward, decreasing the price received by sellers of tuxedoes and causing the quantity of tuxedoes to decrease. c. supply curve for tuxedoes upward, decreasing the effective price paid by buyers of tuxedoes and causing the quantity of tuxedoes to increase. d. supply curve for tuxedoes upward, increasing the effective price paid by buyers of tuxedoes and causing the quantity of tuxedoes to decrease.