Question 1

Refer to the supply curve diagram. A technological advancement in production would be represented by a movement from:

Accepted Answer

S1 to S2.

Question 2

Refer to the supply curve diagram. An increase in the expected future price of the product would be represented by a movement from:

Accepted Answer

S2 to S1.

Question 3

Refer to the supply curve diagram. An increase in the price of the product would be represented by a movement from:

Accepted Answer

A to B.

Question 4

During the Covid-19 pandemic, most movie theaters were forced to close due to social distancing requirements. What likely happened in the market for streaming movie services like Netflix during this pandemic?

Accepted Answer

The demand curve shifted to the right.

Question 5

The growing popularity of energy conservation has enticed large home improvement stores like Home Depot and Lowes to offer tankless water heaters. How does the fact that home improvement stores now offer these products affect the tankless water heater market?

Accepted Answer

The supply curve for tankless water heaters shifts to the right.

Question 6

Which of the following would shift the supply curve for energy drinks to the left?

Accepted Answer

A decrease in the number of firms that produce energy drinks.

Question 7

Hurricane Harvey damaged a large portion of oil refining and pipeline capacity in Texas and Louisiana. In the market for gasoline:

Accepted Answer

The supply curve shifted to the left resulting in an increase in the equilibrium price.

Question 8

Refer to the tax diagram. What is the size of the per-unit tax?

Accepted Answer

$8

Question 9

Refer to the tax diagram. How much of the tax is paid by buyers?

Accepted Answer

$5

Question 10

Refer to the tax diagram. The price buyers pay after the tax is:

Accepted Answer

$8

Question 11

Refer to the tax diagram. For each unit sold, the price sellers receive after the tax (net of tax) is:

Accepted Answer

$3

Question 12

Refer to the tax diagram. How much of the tax is paid by producers?

Accepted Answer

$3

Question 13

Given the demand and supply equations for Aunt Maud's Premium Hand Lotion: $$P = 50 - Q_D$$ and $$P = 10 + \frac{1}{3} Q_S$$, what are the equilibrium price and quantity (in thousands)?

Accepted Answer

$$20$$ and $$30$$ thousand

Question 14

Given the demand and supply equations for Aunt Maud's Premium Hand Lotion: $$P = 50 - Q_D$$ and $$P = 10 + \frac{1}{3} Q_S$$, and equilibrium price and quantity of $$20$$ and $$30$$ thousand units, what is the value of consumer surplus?

Accepted Answer

$$450$$ thousand

Question 15

Given the demand and supply equations for Aunt Maud's Premium Hand Lotion: $$P = 50 - Q_D$$ and $$P = 10 + \frac{1}{3} Q_S$$, and equilibrium price and quantity of $$20$$ and $$30$$ thousand units, what is the value of producer surplus?

Accepted Answer

$$150$$ thousand

Question 16

Given the demand and supply equations for Aunt Maud's Premium Hand Lotion: $$P = 50 - Q_D$$ and $$P = 10 + \frac{1}{3} Q_S$$, and equilibrium price and quantity of $$20$$ and $$30$$ thousand units, what is the value of economic surplus in this market?

Accepted Answer

$$600$$ thousand

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