All of the following are factors that contributed to Demand 1shifting to Demand 2 EXCEPT
an increase in consumer income
a decrease in the price of a substitute good
an increase in the number of buyers in a market
consumers expect the price of the good to increase in thefuture
the product’s popularity with consumers increased
All of the following are factors that contributed to Supply 1shifting to Supply 2 EXCEPT
the price of a key ingredient to the product decreased
the number of sellers decreased
sellers expect the price of the good to rise in the future
the government increased a tax on the product
the product is no longer subsidized by the government
An effective price ceiling is usually set
above the equilibrium price and quantity
at the intersection of the supply and demand curves
by subtracting the highest price for supply and the lowest point for demand on their respective curves
below the equilibrium price
none of the above
A price increase in product X resulted in an increase indemand for product Z. Product Z is most likely a(n)
inferior good
complementary good
substitute good
normal good
factor of production
Suppose the price of iPhones increases 2 percent and the quantity demanded for iPhones decreases by 4 percent, then
elasticity is 2 and demand is price elastic
elasticity is 0.5 and demand is price inelastic
elasticity is 8 and demand is price elastic
elasticity is 0.05 and demand is price inelastic
answer cannot be determined without knowing the length of time the product is on the market with the increase in price
If you calculate the price elasticity of a good to be 0, you arecorrect to assume
it is a normal good
it is a luxury good
people will buy the good regardless of the price
the good has few substitutes
the good has few complements
If there is joint demand for olives and mushrooms, the olives and mushrooms are
substitute goods
complementary goods
normal goods
inferior goods
luxury goods
If corn oil is less substitutable for olive oil, then corn oil willhave
a higher cross-price elasticity of demand
a lower cross-price elasticity of demand
the same cross-price elasticity of demand
a negative cross-price elasticity of demand
an infinite cross-price elasticity of demand
The income effect refers to
the change in the quantity demanded because of a change in price of a relative good
the change in the quantity demanded because of a change in a consumer’s purchasing power
the change in a consumer’s total utility from the consumption of a good
economic profits will be zero in the long run for a perfectly competitive market
collusive pricing tactics that oligopolies use
A designer sells luxury bags for $2,000. The designer raises the bag price to $4,000, and demand for it increases 50%. Which type of good is this bag?
a Giffen good
a Veblen good
an inferior good
a substitute good
a factor of production
A shoe store worker buys 5 pounds of cheap rice weekly. When its price rises, they buy 6 pounds. What type of good is rice?
a Veblen good
a normal good
a substitute good
a Giffen good
a luxury good
After the government imposed a $0.20 per gallon tax on gasoline, the price per gallon of it increased from $1.00 to $1.15. Which of the following is true?
Consumers bear the entire burden of the tax, since producers can pass the tax along to consumers.
Consumers and producers share the tax burden equally
Consumers bear most, but not all, of the tax burden.
Producers bear the entire burden of the tax, since the tax was levied on producers, not consumers.
There is no tax burden, since gasoline is a normal good.
Assume that the government imposes a $4 per-unit tax on sellers of a good in the market described by the graph above. What are the price received by sellers?
Assume that the government imposes a $4 per-unit tax on sellers of a good in the market described by the graph above. What are the price paid by buyers?
Assume that the government imposes a $4 per-unit tax on sellers of a good in the market described by the graph above. What is the tax revenue?
Tax revenue is $200, deadweight loss $0
Tax revenue is $300, deadweight loss $0
Tax revenue is $300, deadweight loss $100
Tax revenue is $500, deadweight loss $200
Tax revenue is $500, deadweight loss $300
The graph shows the teenage labor market with min wage W1. If a lower sub-min wage W2 is set for teens, what is the most likely effect on teenage employment?
Teenage employment will increase because firms will want to hire more teenagers at W2 than at W1.
Teenage employment will increase because more teenagers will want to work at W2 than at W1.
Teenage employment will decrease because fewer teenagers will want to work at W2 than at W1.
Teenage employment will decrease because firms will want to hire fewer teenagers at W2 than at W1.
Teenage employment will stay the same because the market-clearing wage is lower than W1 and W2.
Which of the following will result in the short run if the government imposes a binding quota?
A decrease in the price paid by consumers
A rightward shift in the supply curve
A leftward shift in the demand curve
An increase in consumer surplus
A deadweight loss
Removing a binding price floor on milk will affect the quantity of milk demanded and supplied in the market in which of the following ways?
There will be no change to quantity demanded, and quantity supplied will decrease
Quantity demanded will decrease, and quantity supplied will decrease.
Quantity demanded will decrease, and quantity supplied will increase.
Quantity demanded will increase, and there will be no change to quantity supplied.
Quantity demanded will increase, and quantity supplied will decrease.
A small country imports 40,000 kg of bananas. The global price is $0.5/kg and collects $4,000 in tariff revenue. Which of the following is true?
The consumers in Aronow pay a price of $0.6/kg of bananas.
The domestic production of bananas in Aronow would increase with the removal of the tariff.
The deadweight loss in the market for bananas in Aronow would increase with the removal of the tariff.
Removing the tariff increases CS, but by less than the decrease in PS.
Tariff revenue is maximized when the tariff equals the gap between autarky price and world price.
Ice cream is a normal good; hot fudge is a complement, gelato is a substitute. What could raise ice cream’s price but change quantity indeterminately?
Consumer incomes rise, and the price of hot fudge increases.
Bacteria in ice cream facilities make people sick, and higher dairy output lowers ice cream input costs.
The price of gelato increases, and new technology increases efficiency of ice cream production.
A study indicates that ice cream is associated with improved health, and a big ice cream producer declares bankruptcy
A newly popular diet includes avoiding dairy products, and the government begins to subsidize ice cream production
Assume that the government imposes a $4 per-unit tax on sellers of a good in the market described by the graph above. What are the deadweight loss?