AP Microeconomics Unit 6

If the quantity demanded is lower that the social optimum what should the government do to raise the equilibrium to that optimum?

• Nothing

• tax the buyers

• subsidize the sellers

• subsidize the buyers

What is the tax per unit?

• $10

• $18

• $12

• $8

G. Zachary Wilickers earns $35,000 per year and pays a 15% income tax while Hugh Mann earns $50,000 per year and pays a 17% income tax. This is an example of...

• A Regressive Tax

• A Progressive Tax

• A Proportional Tax

• A Flat Tax

Octan is the leading producer of the Kragle. What will cause President Business to offer more world ending Kragle?

• A competitor, Turbo Oil, lowers the price of their Kragle.

• The price of a key ingredient increases.

• The price of a key ingredient decreases.

• The demand for the Kragle increases.

Mr. Vergo finally realizes his dream of opening Holy Smokes. What will increase his demand for labor?

• The price of charcoal increases?

• Swine flu hits the US.

• There is a baby boom among pigs and price of pork decreases.

• The government taxes spare ribs.

Producer surplus is measured by

• the area to the right of the supply curve but below the price equilibrium.

• the sum of buyer and seller surplus

• the area above the supply curve but below the equilibrium price.

• the right of the demand curve and above the price.

Which of the following will cause the Production Possibilities Curve to shift outwards?

• Workers become better trained

• Forrest fires destroy 100,000 acres of land

• War destroys factories

• Skilled workers leave the country.

What will happen is the price of ukuleles decrease

• The demand for ukuleles will increase

• The supply of ukuleles will decrease.

• the quantity of ukuleles demanded will increase.

• None of the above.

To calculate marginal revenue product,

• multiply the marginal product by the marginal cost.

• multiply the marginal product by the product price.

• divide the marginal product by the marginal cost.

• None of the answers are correct.

What is the main difference between firms in the long run and firms in the short run?

• Short run firms cannot change the size of the plant.

• Long run firms cannot change the size of the plant.

• Short run is enough time to change the amount of capital.

• Short run firms can change the size of the plant.