ECN 2

If a binding price floor is imposed on the video game market, then

• the supply of video games will increase

• a surplus of video games will develop

Which of the following is not correct?

• Taxes levied on sellers and taxes levied on buyers are not equivalent

• A tax places a wedge between the price that buyers pay and the price that sellers receive.

The movement from point A to point B on the graph shows

• an increase in demand

• an increase in quantity demanded

Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increase the minimum wage by $1.00 per hour, then it is likely that the

• Supply of bicycles will shift to the left

• Supply of bicycles will shift to the right

Assume Lianna buys coffee beans in a competitive market. It follows that

• even buying a large quantity of coffle beans, Liana cannot influence the price.

• Whenever buying coffees beans, Liana will negotiate with sellers.

Moving produciton form a high-cost producer to a low-cost producer will

• lower total surplus

• raise total surplus

• 2.33

• 2.89

• A is a luxury , and B is neccesity

• A has fewer substitutes than B

The current price of blue jeans is $30 per pair, but the equilibrium price of blue jeans is $25 per pair. As a result, which of the following statements is not true?

• There is a surplus of blue jeans at the $30 price

• There is a shortage of blue jeans at $30 price.

All else equal, what happens to consumer surplus if the price of a good increase?

• Consumer surplus decrease

• Consumer surplus is unchanged