Question

On a graph of a demand curve, total consumer surplus equals:
   
A-the demand curve.
B-the area above the demand curve and beneath the market price.
C-the market price.
D-the area beneath the demand curve and above the market price.

Total producer surplus equals:
   
A-the area above the supply curve and beneath the market price.
B-the area beneath the supply curve and above the demand curve.
C-the market price.
D-the supply curve.

An increase in supply refers to:
   
A-a downward movement along the supply curve.
B-an upward movement along the supply curve.
C-a leftward shift of the supply curve.
D-a rightward shift of the supply curve.

In the market for fertilizer, an:
   
A-increase in the wage rate will increase the supply of fertilizer.
B-advance in technology will increase the supply of fertilizer.
C- increase in the cost of equipment will increase the supply of fertilizer.
D- increase in the wage rate will increase the demand for fertilizer.

   Which of the following factors causes a decrease in supply?
   
A-an increase in the price of the product
B-new taxes on output
C- a decrease in the price of the product
D-a decrease in demand

   A subsidy is a:
   
A-form of tax increase.
B-0movement along the supply curve.
C-means of shifting the supply curve left.
D-reverse tax.

When there is a surplus of a good:
   
A-sellers will lower the price in order to increase quantity demanded.
B-sellers will raise the price in order to decrease quantity demanded.
C-sellers will compete with buyers.
D-this is an indication the buyers do not value the good.

The equilibrium price is:
   
A- stable because at this price the quantity demanded equals the quantity supplied.
B-unstable because at this price the quantity demanded exceeds the quantity supplied.
C-unstable because at this price the quantity demanded is less than the quantity supplied.
D- stable because at this price all buyers are willing and able to pay.

If the demand increases, what happens with the supply curve?
   
A-The supply increases.
B- There is a movement rightward along the supply curve.
C- There is a movement leftward along the supply curve.
D-The supply decreases.

The growing economies of China and India have increased the demand for:
   
A- automobiles, leading to a decrease in the supply of oil and rising oil prices.
B- oil, leading to lower oil prices in the early part of the twenty-first century.
C-oil, leading to higher oil prices in the early part of the twenty-first century.
D-automobiles, leading to rising oil supplies and falling prices.

At a free market equilibrium there are no unexploited gains from trade.
   
   True
   False

Increases in farm productivity have lowered the prices of many agricultural products. Farm revenues decreased, which implies that the:
   
A-demand for many agricultural products is inelastic.
B- costs of production increased.
C-costs of production stayed the same.
D- demand for many agricultural products is elastic.

The elasticity of supply measures:
   
A- the rate of change of supply in relation to demand.
B- how responsive price is to a change in the quantity supplied of a good or service.
C- how much value suppliers place on each unit of the good or service.
D- how responsive the quantity supplied is to a change in the price of a good or service

The elasticity of supply measures:
   
A-the rate of change of supply in relation to demand.
B- how responsive price is to a change in the quantity supplied of a good or service.
C- how much value suppliers place on each unit of the good or service.
D- how responsive the quantity supplied is to a change in the price of a good or service

Price discrimination can be defined as:
   
A- selling different products to the same consumers in the same market.
B- selling the same product in two different markets.
C- exporting goods to foreign countries.
D- selling the same product at two different prices in two different markets.

  

Under perfect price discrimination:
   
A-each customer is charged his or her maximum willingness to pay.
B-markets are segmented and each segment is charged a markup inversely proportional to the elasticity of demand.
C-it is easy to arbitrage.
D- each customer is charged the average price that others with his or her characteristics are willing to pay.

   

Under perfect price discrimination:
   
A-each customer is charged his or her maximum willingness to pay.
B-markets are segmented and each segment is charged a markup inversely proportional to the elasticity of demand.
C- it is easy to arbitrage.
D- each customer is charged the average price that others with his or her characteristics are willing to pay.

Answer 1

1) consumer surplus equals D-the area beneath the demand curve and above the market price.

2)producer surplus equals:
   
A-the area above the supply curve and beneath the market price.

3)an increase in supply refers to a right word shift in the supply curve.

4)in the market for fertilizer an increase in the B-advance in technology will increase the supply of fertilizer.

5)new taxes on output causes a decrease in supply.

6) a subsidy is a reverse tax.

7)When there is a surplus of a good:
   
A-sellers will lower the price in order to increase quantity demanded.

8) the equilibrium price is stable because at this price the quantity demanded equals the quantity supplied.

9)if demand increases There is a movement rightward along the supply curve.