AP MICRO W2021 - C3

AP MICRO W2021 - C3

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Multiple Choice

Which of the following is likely to have the highest price elasticity of demand?

• eggs

• beef

• housing

• gasoline

• foreign travel

Multiple Choice

If a decrease in price from $2 to $1 causes an increase in quantity demanded from 100 to 120, using the midpoint method, price elasticity of demand equals

• 0.17.

• 0.27.

• 0.40.

• 2.5.

• 3.72.

Multiple Choice

Which of the following is correct for a price increase? When demand is______ , total revenue will _______ .

• a

• b

• c

• d

• e

Multiple Choice

Total revenue is maximized when demand is

• elastic

• inelastic

• unit-elastic

• zero

• infinite

Multiple Choice

If the cross-price elasticity between two goods is negative, this means that the two goods are

• substitutes

• complements

• normal

• inferior

• luxuries

Multiple Choice

Other things equal, a rise in price will result in which of the following?

• Producer surplus will rise; consumer surplus will rise.

• Producer surplus will fall; consumer surplus will fall.

• Producer surplus will rise; consumer surplus will fall.

• Producer surplus will fall; consumer surplus will rise.

• Producer surplus will not change; consumer surplus will rise.

Multiple Choice

Consumer surplus is found as the area

• above the supply curve and below the price.

• below the demand curve and above the price

• above the demand curve and below the price.

• below the supply curve and above the price

• below the supply curve and above the demand curve.

Multiple Choice

An excise tax imposed on sellers in a market will result in which of the following?

I. an upward shift of the supply curve II. a downward shift of the demand curve III. deadweight loss

• I only

• II only

• III only

• I and III only

• I, II, and III

Multiple Choice

An excise tax will be paid mainly by producers when

• it is imposed on producers.

• it is imposed on consumers

• the price elasticity of supply is low and the price elasticity of demand is high.

• the price elasticity of supply is high and the price elasticity of demand is low.

• the price elasticity of supply is perfectly elastic.