Unit 2 Quiz MT445 kaplan University Managerial Economics

1.
Table
3-1

Refer to Table 3-1. The table above shows the demand schedules for
loose-leaf tea of two individuals (Sunil and Mia) and the rest of the
market. At a price of $5, the quantity demanded in the market would be
(Points : 1)

51 lbs.

76 lbs.

63 lbs

146 lbs.

Question 2. 2.If the quantity demanded for a product exceeds the
quantity supplied the market price will rise until (Points : 1)

the quantity demanded equals the
quantity supplied. The product will then no longer be scarce.

quantity demanded equals quantity
supplied. The equilibrium price will then be greater than the market price.

only wealthy consumers will be
able to afford the product.

quantity demanded equals quantity
supplied. The market price will then equal the equilibrium price.

Question 3. 3.
Figure
3-6

Refer to Figure 3-6. The graph in this figure illustrates an initial
competitive equilibrium in the market for apples at the intersection of D1
and S1 (point A). If there is a shortage of apples
how will the equilibrium point change? (Points : 1)

The equilibrium point will move
from A to B.

The equilibrium point will move
from A to C.

There will be no change in the
equilibrium point.

The equilibrium point will move
from A to E.

Question 4. 4.
Figure
3-6

Refer to Figure 3-6. The graph in this figure illustrates an initial
competitive equilibrium in the market for apples at the intersection of D1
and S1 (point A). If there is an increase in
the wages of apple workers and an increase in the price of oranges, a
substitute for apples, the equilibrium could move to which point? (Points :
1)

B

C

E

None of the points shown.

Question 5. 5.”The price of digital cameras fell because of
improvements in production technology. As a result, the demand for
non-digital cameras decreased. This caused the price of non-digital cameras
to fall; as the price of non-digital cameras fell the demand for non-digital
cameras decreased even further.” Evaluate this statement.(Points : 1)

The statement is false because the
demand for non-digital cameras would increase as the price of digital cameras
fell.

The statement is false. A decrease
in the price of digital cameras would decrease the demand for non-digital
cameras, but a decrease in the price of non-digital cameras would not cause
the demand for non-digital cameras to decrease.

The statement is false because it
confuses the law of demand with the law of supply.

The statement is false because
digital camera producers would not reduce their prices as a result of
improvements in technology; doing so would reduce their profits.

Question 6. 6.
Figure
4-1

Figure 4-1 shows Kendra’s demand
for ice-cream cones curve.

Refer to Figure 4-1. If the market price is $2.50, what is
the maximum number of ice cream cones that Kendra will buy? (Points : 1)

1

2

4

3

Question 7. 7.
Figure
4-7

Figure 4-7 shows the demand and
supply curves for the almond market. The government believes that the
equilibrium price is too low and tries to help almond growers by setting a
price floor at Pf.

Refer to Figure 4-7. What is the area that represents
producer surplus after the imposition of the price floor? (Points : 1)

A + B + E

B + E

B + E + F

B + C + D + E

Question 8. 8.Congress passed the Freedom to Farm Act in 1996. What
was the purpose of this Act?
(Points : 1)

To encourage more people to become
farmers.

To grant free land to farmers in
order to produce crops that were particularly scarce.

To phase out the use of price
ceilings in agricultural markets.

To phase out price floors and
return to a free market in agriculture.

Question 9. 9.
Figure
4-7

Figure 4-7 shows the demand and
supply curves for the almond market. The government believes that the
equilibrium price is too low and tries to help almond growers by setting a
price floor at Pf.

Refer to Figure 4-7. What area represents consumer surplus
after the imposition of the price floor? (Points : 1)

A + B + E

A + B

A + B + E + F

A

Question 10. 10.The actual division of the burden of a tax between
buyers and sellers in a market is called
(Points : 1)

tax incidence.

tax liability.

tax bearer.

tax parity.

 

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