Ch 3 and 4 Review

Refer to the figure: The market price of the product is $20 per unit. Calculate the dollar amount of consumer surplus being earned in this market.

• $120,000

• $60,000

• $100,000

• $80,000

Refer to the figure: Which factor would cause change in the figure?

• A decrease in the price of a complement good

• a decrease in the price of the product

• a decrease in the price of a substitute

• an increase in taxes

Which statement is TRUE regarding the figure?

• At a price of $6 per unit, consumers are willing and able to buy 10 units.

• The maximum price demanders are willing to pay for 15 units is $6 per unit

• The higher the price, the greater the quantity demanded.

• At a price of $3.75 per unit, consumers are indifferent between buying 10 and 15 units.

True or False: A decrease in the cost of inputs will shift the supply curve down and to the right

• True

• False

A decrease in expected future supply of a good will lead to:

• A change in the demand for the good, but not until supply actually goes down

• a change in the price of the good, but not until supply actually goes down

• a change in the demand for the good even before the supply decreases

• no change in the demand for the good

Refer to the figure. If the price of bananas in the diagram is $6 a pound, what is total producer surplus?

• 120,000

• 160,000

• 80,000

• 240,000

Refer to the table. The equilibrium price is:

• $2

• $4

• $6

• $8

After a hurricane in Florida destroys half of the orange crop, economists predict:

• an increase in both orange prices and orange sales

• a decrease in orange prices and orange sales

• an increase in orange prices and a decrease in orange sales

• a decrease in orange prices and an increase in orange sales

in the figure, the demand curve shifted from D0 to D1. To describe this movement, we would say that:

• demand increased, which caused an increase in supply

• quantity demanded increased, which caused and increase in supply

• demand increased, which caused an increase in quantity supplied

• quantity demanded increased, which caused an increase in quantity supplied

A demand curve shows the relationship between:

• quantity demanded and quantity supplied, which are positively related.

• quantity demanded and quantity supplied, which are negatively correlated

• price and quantity demanded, which are positively related

• price and quantity demanded, which are negatively related