Reference no: EM132472977

Question 1: Supply curves tend to be upward sloping in part because

1. producers become confident that they can charge more as they get bigger.
2. suppliers produce the least costly, easy-to-produce units first.
3. inflation affects larger firms more than smaller firms.
4. of all the above.

Question 2: If a price is artificially set below equilibrium in a marketplace, which of the following will be true?

1. The benefit of the last unit sold will exceed the cost of that unit.
2. The cost of the last unit sold will equal the benefit of that unit no matter where the price is.
3. The cost of the last unit sold will exceed the benefit of that unit.
4. It is impossible to know the costs and benefits from the information given.

Question 3: The following two equations depict a market for wheat: P = 160 - 2Q and P = 10 + 48Q. Which of the following is true of this market?

1. The supply intercept implies that the earlier units can be produced free.
2. The supply function is the first of the two equations.
3. The price at equilibrium is 140.
4. The quantity at equilibrium is 3.

Question 4: Using cost-benefit analysis to evaluate market efficiency, we could say that if the amount sold for the last item sold.

1. none of the above answers is true.
2. is at equilibrium, the producer cost and consumer benefit are equal.
3. exceeds equilibrium, the producer cost is less than the consumer benefit.
4. is less than equilibrium, the producer cost is greater than the consumer benefit.

Question 5: Which of the following does not have the same effect on the demand curve as the other three?

1. The consumer's income rises and the good is a normal good.
2. The price of substitution falls.
3. The price of complement rises.
4. The good is an inferior good and the consumer's income rises.