Economics Assignment 06

EC202 Fall 2016

                                                  Homework 1  (due Oct 12)              Name_______________________

1.     Whichofthesestatementsbestrepresentsthelawofdemand?

a.  Whenbuyers’tastesforagoodincrease,theypurchasemoreofthegood.

b.  Whenincomelevelsincrease,buyerspurchasemoreofmostgoods.

c.  Whenthepriceofagooddecreases,buyerspurchasemoreofthegood.

d.  Whenbuyers’demandsforagoodincrease,thepriceofthegoodincreases.

Table4-9

2.  RefertoTable4-9.Whichcombinationwouldproduceanincreaseinequilibriumquantityandanindeterminatechangeinequilibriumprice?

a.  A

b.  B

c.  C

d.  D

3.     RefertoTable4-9.Whichcombinationwouldproduceanincreaseinequilibriumpriceandanindeterminatechangeinequilibriumquantity?

a.  A

b.  B

c.  C

d.  D

4.     RefertoTable4-9.Whichcombinationwouldproduceadecreaseinequilibriumpriceandanindeterminatechangeinequilibriumquantity?

a.  A

b.  B

c.  C

d.  D

5.     RefertoTable4-9.Whichcombinationwouldproduceadecreaseinequilibriumquantityandanindeterminatechangeinequilibriumprice?

a.  A

b.  B

c.  C

d.  D

Table4-10

Thefollowingtableshowsthenumberofcasesofwatereachselleriswillingtosellatthepriceslisted.

6.     RefertoTable4-10.IfAlpineSpringsandDewGoodaretheonlytwosuppliersinthismarket,byhowmuchdoesthemarketquantitysuppliedchangewitheach$3increaseinprice?

a.  -200cases

b.  -100cases

c.  100cases

d.  200cases

7.     RefertoTable4-10.Ifthefoursupplierslistedaretheonlysuppliersinthismarketandthemarketdemandscheduleis:

theequilibriumpriceandquantityare

a.  $0.00and1200cases

b.  $3.00and300cases

c.  $6.00and600cases

d.  $9.00and600cases

8.     RefertoTable4-10.Ifthefoursupplierslistedaretheonlysuppliersinthismarketandthemarketquantitydemandedis500caseswhenthepriceis$5.00,whichofthefollowingstatementsiscorrect?

a.  Themarketisinequilibriumatapriceof$5.00.

b.  Thereisasurplusof100casesatapriceof$5.00.

c.  Thereisashortageof100casesatapriceof$5.00.

d.  Thereisashortageof50casesatapriceof$5.00.

Table4-11

9.  RefertoTable4-11.Theequilibriumpriceandquantity,respectively,are

a.  $2and50units.

b.  $6and30units.

c.  $6and60units.

d.  $12and30units.

10.                       RefertoTable4-11.Ifthepricewere$8,a

a.  shortageof20unitswouldexist,andpricewouldtendtorise.

b.  surplusof25unitswouldexist,andpricewouldtendtofall.

c.  shortageof25unitswouldexist,andpricewouldtendtorise.

d.  surplusof45unitswouldexist,andpricewouldtendtofall.

11.RefertoTable4-11.Ifthepricewere$4,a

a.  surplusof15unitswouldexist,andpricewouldtendtofall.

b.  shortageof25unitswouldexist,andpricewouldtendtorise.

c.  surplusof25unitswouldexist,andpricewouldtendtofall.

d.  shortageof40unitswouldexist,andpricewouldtendtorise.

Table4-12

Acountryclubusuallyonlyallowsmemberstopurchaseticketsforitscelebritygolftournament,buttheclubisconsideringallowingnon-memberstopurchaseticketsthisyear.Thedemandandsupplyschedulesareasfollows:

12.RefertoTable4-12.Ifonlymembersareallowedtopurchaseticketstothisyear'scelebritygolftournament,thenwhatwillbetheequilibriumprice?

a.    $10

b.   $15

c.    $20

d.   $25

13.RefertoTable4-12.Ifbothmembersandnon-membersareallowedtopurchaseticketstothisyear'scelebritygolftournament,thenwhatwillbetheequilibriumprice?

a.    $10

b.   $15

c.    $20

d.   $25

14.RefertoTable4-12.Ifbothmembersandnon-membersareallowedtopurchaseticketstothisyear'scelebritygolftournamentandthecountryclubsetstheticketpriceat$30,thentherewillbe

a.  ashortageof300tickets.

b.  asurplusof300tickets.

c.  600ticketssold.

d.  600ticketsunsold.

15.RefertoTable4-12.Ifbothmembersandnon-membersareallowedtopurchaseticketstothisyear'scelebritygolftournamentandthecountryclubsetstheticketpriceat$20,thentherewillbe

a.  ashortageof300tickets.

b.  asurplusof300tickets.

c.  300ticketssold.

d.  600ticketsunsold.

16.       Consumersurplusis

a.  aconceptthathelpsusmakenormativestatementsaboutthedesirabilityofmarketoutcomes.

b.  representedonagraphbytheareabelowthedemandcurveandabovetheprice.

c.  agoodmeasureofeconomicwelfareifbuyers'preferencesaretheprimaryconcern.

d.  Alloftheabovearecorrect.

17.Inamarket,themarginalbuyeristhebuyer

a.  whosewillingnesstopayishigherthanthatofallotherbuyersandpotentialbuyers.

b.  whosewillingnesstopayislowerthanthatofallotherbuyersandpotentialbuyers.

c.  whois willing to buyexactly one unit of thegood.

d.  whowouldbethefirsttoleavethemarketifthepricewereanyhigher.

Table7-1

18.RefertoTable7-1.Ifthepriceoftheproductis$110,thenwhowouldbewillingtopurchasetheproduct?

a.  Calvin

b.  CalvinandSam

c.  Calvin,Sam,andAndrew

d.  Calvin,Sam,Andrew,andLori

19.RefertoTable7-1.Ifthepriceoftheproductis$130,thenwhowouldbewillingtopurchasetheproduct?

a.  Calvin

b.  CalvinandSam

c.  Calvin,Sam,andAndrew

d.  Calvin,Sam,Andrew,andLori

20.RefertoTable7-1.Ifthepriceoftheproductis$122,thenthetotalconsumersurplusis

21.RefertoTable7-1.Ifpriceoftheproductis$135,thenthetotalconsumersurplusis

 a.$-50.

 b.$-35.

 c.$15.

          d.$150.

22.RefertoTable7-1.Ifthemarketpriceis$105,

a.  Calvin’sconsumersurplusis$45andtotalconsumersurplusis$85.

b.  Sam’sconsumersurplusis$30andtotalconsumersurplusis$90.

c.  Andrew’sconsumersurplusis$15andtotalconsumersurplusis$67.50.

d.  Lori’sconsumersurplusis­$2andtotalconsumersurplusis$100.

Table7-2

Thistablereferstofivepossiblebuyers'willingnesstopayforacaseofVanillaCoke.

23.RefertoTable7-2.IfthepriceofVanillaCokeis$6.90,whowillpurchasethegood?

a.  allfiveindividuals

b.  Megan,MalloryandAudrey

c.  David,LauraandMegan

d.  DavidandLaura

24.                      RefertoTable7-2.Whichofthefollowingisnottrue?

a.  Atapriceof$9.00,nobuyeriswillingtopurchaseVanillaCoke.

b.  Atapriceof$5.50,MeganisindifferentbetweenbuyingacaseofVanillaCokeandnotbuyingone.

c.  Atapriceof$4.00,totalconsumersurplusinthemarketwillbe$9.00.

d.  Alloftheabovearecorrect.

25.RefertoTable7-2.Ifthemarketpriceis$5.50,theconsumersurplusinthemarketwillbe

 a.$3.00.

b.$4.50.

c.$15.50.

d.$21.00.

26.        RefertoTable7-2.Ifthemarketpriceis$3.80,

a.  David’sconsumersurplusis$4.70andtotalconsumersurplusforthefiveindividualsis$9.50.

b.  Megan’sconsumersurplusis$1.70andtotalconsumersurplusforthefiveindividualsis$9.80.

c.  David,Laura,andMeganwillbetheonlybuyersofVanillaCoke.

d.  thedemandcurveforVanillaCoke,takingthefiveindividualsintoaccount,ishorizontal.

Figure7-6

27.                RefertoFigure7-6.Attheequilibriumprice,consumersurplusis

 a.$1,600.

 b.$800.

 c.$1,400.

 d.$700.

28.     RefertoFigure7-6.Ifthegovernmentimposesapricefloorof$110inthismarket,thenconsumersurpluswilldecreaseby

a.$200.

b.$400.

c.$600.

d.$800.

Figure7-11

29.       RefertoFigure7-11.IfthesupplycurveisS,thedemandcurveisD,andtheequilibriumpriceis$100,whatistheproducersurplus?

a.  $625

b.  $1,250

c.  $2,500

d.  $5,000

30. RefertoFigure7-11.IfthesupplycurveisS’,thedemandcurveisD,andtheequilibriumpriceis$150,whatis theproducersurplus?

a.$625

b.$1,250

c.$2,500

d.$5,000

31.  RefertoFigure7-11.IfthedemandcurveisDandthesupplycurveshiftsfromS’toS,whatisthe changeinproducersurplus?

a.       Producersurplusincreasesby$625.

b.      Producersurplusincreasesby$1,875.

c.       Producersurplusdecreasesby$625.

d.      Producersurplusdecreasesby$1,875.

32.RefertoFigure7-11.IfthesupplycurveisSandthedemandcurveshiftsfromDtoD’,whatisthechangeinproducersurplus?

a.       Producersurplusincreasesby$3,125.

b.      Producersurplusincreasesby$5,625.

c.       Producersurplusdecreasesby$3,125.

d.      Producersurplusdecreasesby$5,625.

33.RefertoFigure7-11.IfthesupplycurveisSandthedemandcurveshiftsfromDtoD’,whatistheincreasein producersurplustoexistingproducers?

a.$625

b.$2,500

c.$3,125

d.$5,625

34. RefertoFigure7-11.IfthesupplycurveisSandthedemandcurveshiftsfromDtoD’,whatistheincreasein producersurplusduetonewproducers

        a.$625

        b.$2,500

       c.$3,125

       d.$5,625

35.  Supposethat50icecreamconesaredemandedataparticularprice.Ifthepriceoficecreamconesrisesfromthatpriceby4percent,thenumberoficecreamconesdemandedfallsto46.Usingthemidpointapproachtocalculatethepriceelasticityofdemand,itfollowsthatthe

a.       demandforicecreamconesinthispricerangeiselastic.

b.      demandforicecreamconesinthispricerangeisinelastic.

c.       demandforicecreamconesinthispricerangeisunitelastic.

d.      priceelasticityofdemandforicecreamconesinthispricerangeis0.

36.Whenthepriceofchaitealattésis$5,Maxinebuys20permonth.Whenthepriceis$4,shebuys30permonth.

Maxine'sdemandforchaitealattésis

a.       elastic,andherdemandcurvewouldberelativelyflat.

b.      elastic,andherdemandcurvewouldberelativelysteep.

c.       inelastic,andherdemandcurvewouldberelativelyflat.

d.      inelastic,andherdemandcurvewouldberelativelysteep.

Table5-1

37.RefertoTable5-1.WhichofthefollowingisconsistentwiththeelasticitiesgiveninTable5-1?

a.       AisaluxuryandBisanecessity.

b.      AisagoodafteranincreaseinincomeandBisthatsamegoodafteradecreaseinincome.

c.       AhasfewersubstitutesthanB.

d.      AisagoodimmediatelyafterapriceincreaseandBisthatsamegood3yearsafterthepriceincrease.

38.RefertoTable5-1.WhichofthefollowingisconsistentwiththeelasticitiesgiveninTable5-1?

a.       AislaundrydetergentandBisTide.

b.      AisDietPepsiandBissoda.

c.       AisfoodandBisayacht.

d.      AistoiletpaperandBiscandles.

39.RefertoTable5-1.WhichofthefollowingisconsistentwiththeelasticitiesgiveninTable5-1?

a.       AispensandBispencils.

b.      AisaSnickersbarandBisaMilkyWaybar.

c.       AisanairlineticketfromChicagotoNewYorkdemandedbyavacationerandBisanairlineticketfromChicagotoNewYorkdemandedbyabusinesstraveler.

d.      AisabottleofwaterdemandedbyatouristinadesertandBisabottleofwaterdemandedbyatouristinarainforest.

40.Supposethereisa6percentincreaseinthepriceofgoodXandaresulting6percentdecreaseinthequantityofXdemanded.PriceelasticityofdemandforXis

a.       0.

b.      1.

c.       6.

d.      36.