Ag Econ 1041
Quiz 10, 30 points
November 29, 2012
Name ____KEY______________________
11 a.m. Section
True/False – one point each
T
F
1.
T
F
2.
T
T
T
F
F
F
3.
4.
5.
If the price of petroleum based ink increases, the demand for soy based ink will
also increase.
Kristen’s opportunity cost of going to college is what she pays for food, drinks
and housing.
A minimum wage increases efficiency.
Fixed costs only exist in the long run.
Demand for charcoal will increase if the price of charcoal barbecue grills is
substantially reduced.
Multiple choice –two points each
__a___ 6. Suppose the government imposes a $1 per gallon tax on the sellers of gasoline. As a
result, the
a) Supply curve shifts leftward
b) Consumer surplus increases
c) Demand curve shifts leftward
d) Demand curve shifts rightward
e) Demand and supply curves both shift leftward
__d___ 7. Rent controls
a) Create a deadweight loss
b) Increase maintenance by landlords
c) Benefit people who live in rent controlled apartments
d) Both answers A and C are correct
e) Both answers B and C are correct
__d___ 8. A point on the demand curve shows the
a) Price and corresponding quantity demanded
b) Marginal benefit from purchasing that unit
c) Marginal cost to the seller of producing the unit
d) Both answers A and B are correct
e) Both answers A and C are correct
__b___ 9. When efficiency is attained, the sum of the total amount of consumer surplus and
producer surplus is
a) Minimized
b) Maximized
c) Equal to the deadweight loss
d) Undefined or equal to zero
e) Equal to total utility
TURN THE QUIZ OVER
__e___ 10. A monopoly
a) Creates a deadweight loss
b) Always leads to higher prices
c) Decreases the price below the equilibrium price
d) Should not be allowed
e) Can set price or quantity but not both
The following questions are valued at 5 points each
11. What do we call the competitive environment where firms compete with other firms
producing similar but not necessarily identical products?
Monopolist competition
12. Finish the equation or statement.
a) P x Q = ___TR_______________________
b) % Δ Qd ÷ % Δ P = _price elasticity_____________
c) Demand – Price = _consumer surplus____________________
d) Δ TR = __MR_______________
e) Sum of MC = ___VC______________
13. Draw a demand and supply curve that represents the market for apples. If this is a typical
perfectly competitive industry, draw the case for the typical firm.
S
P
MC
P
ATC
D = MR
P
P
D
Q
Q
q
q