Microeconomics MidtermWeb

Java Python Microeconomics Midterm

1) The time spent looking for someone with whom to do business is called

A) elasticity of time.

B) market time.

C) search activity.

D) opportunity time.

E) development time.

Use thefigure below to answer thefollowing questions.

 

2) Consider the market for rental housing illustrated in Figure when the demand curve is D0. The equilibrium in an unregulated market is

A) 1,500 rooms rented at $150 a month.

B) 1,500 rooms rented at $200 a month.

C) 1,750 rooms rented at $175 a month.

D) 1,750 rooms rented at $200 a month.

E) 2,000 rooms rented at $150 a month.

3) Refer to Figure. If the demand for rental housing increases and the demand curve shifts rightward from D0to D1, and the market is unregulated, the number of rooms rented is

A) 1,500, and the rent rises to $200 a month.

B) 2,000, and the rent is at its initial level.

C) 1,750, and the rent rises to $175 a month.

D) 2,000, and the rent rises to $200 a month.

E) 1,750, and the rent rises to $200 a month.

4) Refer to Figure. If the demand for rental housing increases and the demand curve shifts rightward from D0to D1, and there is a strictly enforced rent ceiling of $150 per room,

A) the number of rooms rented will increase to 2,000.

B) the number of rooms rented is 1,500.

C) there is a housing shortage of 500 rooms.

D) the number of rooms rented decreases to 1,000.

E) both B and C

5) Refer to Figure. Suppose the demand for rental housing is shown by demand curve D1,

and there is a rent ceiling of $150 per room. What is the highest rent that would be charged in a black market?

A) $150 a month

B) $175 a month

C) $200 a month

D) $100 a month

E) cannot be determined from the graph, but we know it is greater than $200

6) Refer to Figure. Suppose the demand for rental housing is shown by demand curve D1, and there is a rent ceiling of $150 per room. What is the highest amount that would be

expended on search activity?

A) $200

B) $150

C) $100

D) $50 E) $0

7) The buyer pays most of a tax if demand is relatively inelastic because

A) the buyer cannot easily substitute to other markets.

B) the buyer can easily substitute to other markets.

C) the government forces the seller to bear the burden of the tax.

D) there is a black market for this good.

E) the seller cannot easily substitute to other goods.

8) If a sales tax is imposed on food, who is likely to pay most of the tax?

A) mostly the buyer

B) mostly the seller

C) neither the seller nor the buyer

D) the buyer and the seller equally

E) The burden of the tax depends on the size of the tax.

9) The goods and services we sell to people in other countries are our

A) tariffs.

B) quotas.

C) exports.

D) imports.

E) investment goods and services.

10) The fundamental force that drives international trade is

A) comparative advantage.

B) absolute advantage.

C) a countries' desire to increase their trade surplus.

D) cheap labour in countries like China and India.

E) unemployment of factors of production.

11) Canada has a comparative advantage in producing hardwood if the Canadian price of

hardwood before international trade is                  the world price.

A) equal to

B) greater than

C) not comparable to

D) at least double

E) less than

12) A country opens up to trade. In an import industry, surplus has been redistributed from

A) producers to consumers.

B) consumers to producers.

C) government to consumers.

D) producers to government.

E) government to producers.

Refer to the table below to answer thefollowing questions.

Table

Glazeland's Doughnut Market

Price (dollars per doughnut) < Microeconomics MidtermWeb /td>	Glazeland's Supply (millions)	Glazeland's Demand (millions)
0.20	1	10
0.30	2	8
0.40	3	6
0.50	4	4
0.60	5	2
0.70	6	0

13) Table shows Glazeland's doughnut market before international trade. Glazeland opens up to international trade. If the world price is $0.60 a doughnut then Glazeland will produce

 doughnuts and will                  doughnuts.

A) 2 million; import 3 million

B) 4 million; import 1 million

C) 4 million; export 1 million

D) 5 million; import 3 million

E) 5 million; export 3 million

14) Table 7.1.1 shows Glazeland's doughnut market before international trade. Glazeland opens up to international trade. If the world price is $0.40 a doughnut then Glazeland will produce                  doughnuts and will                  doughnuts.

A) 3 million; import 3 million

B) 3 million; export 3 million

C) 4 million; import 1 million

D) 4 million; export 1 million

E) 6 million; export 3 million

15) Choose the correct statement.

A) Exports include goods and services.

B) Imports include goods but not services.

C) Imports include services but not goods.

D) Exports include goods but not services.

E) Exports include services but not goods.

16) Who benefits from imports?

A) domestic consumers

B) domestic producers

C) foreign consumers

D) domestic workers in the industry

E) everyone benefits

17) A tariff is imposed on a good. This                   producer surplus and                  total surplus in importing country.

A) increases; does not change

B) increases; increases

C) decreases; increases

D) decreases; decreases

E) increases; decreases

18) An import quota is

A) a tariff that is a fixed percentage of the price of a good.

B) a tariff that is a fixed dollar amount per unit of a good.

C) an agreed upon price for a good to be imported at a specified future date.

D) a restriction that specifies the maximum quantity of a good that maybe imported in a given time period.

E) the same as an export subsidy.

19) A tariff                  the domestic price of the good and an import quota                  the domestic price of the good.

A) lowers; lowers

B) lowers; raises

C) raises; lowers

D) raises; raises

E) does not change; does not change

20) As more of a good is consumed, its

A) marginal utility increases.

B) marginal utility decreases.

C) marginal utility remains unchanged.

D) total utility decreases.

E) total utility increases at an increasing rate