EC 201 Study Guide - Final Guide: Economic Equilibrium, Demand Curve, Microeconomics

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turquoisegnu128

28 Sep 2018

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Answers and discussion for form d: as a result of a hurricane, several refineries are damaged, and are temporarily unable to produce gasoline. Thus, it could be said that the technology of producing gasoline has deteriorated. Answer: c. an improvement in technology is represented by a rightward shift in the supply curve. A deterioration in technology is represented by a leftward shift in the supply curve: in the market for imports of gihurs, the equilibrium price is and the equilibrium quantity is 15. Then, a tariff of per gihur is imposed. As a result, the market moves to a new equilibrium, in which the price paid by buyers is , the price received by sellers is. How much tariff revenue is collected by the government of the importing country: $ 80, $ 50, $ 40, $ 10, $ 5.

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QUESTION 11

If the demand for investment loans rises, this could be the result of

		the discovery of new and better roundabout methods of production.
		a lower rate of time preference in society.
		a lower interest rate.
		a higher interest rate.
		a and c

1 points

QUESTION 12

Which of the following statements is true?

		All persons have a high rate of time preference.
		People with a high rate of time preference are more likely to be borrowers than people with a low rate of time preference.
		People with a high rate of time preference are more likely to be lenders than people with a low rate of time preference.
		A high interest rate is the cause of a high rate of time preference.
		none of the above

1 points

QUESTION 13

Which of the following statements is true?

		The nominal interest rate is always higher than the real interest rate since the nominal interest rate equals the real interest rate plus the expected inflation rate.
		The nominal interest rate is always lower than the real interest rate since the nominal interest rate equals the real interest rate minus the expected inflation rate.
		The nominal interest rate can equal the real interest rate, but to do so the expected inflation rate must be zero percent.
		It is the nominal interest rate-not the real interest rate-that matters to borrowers.

1 points

QUESTION 14

If there is an increase in the expected inflation rate, then,

		the supply and demand for loanable funds will decrease.
		the supply and demand for loanable funds will increase.
		the supply of loanable funds will decrease, and the demand for loanable funds will increase.
		the supply of loanable funds will increase, and the demand for loanable funds will decrease.

1 points

QUESTION 15

If suddenly a 4 percent inflation rate (instead of a zero percent inflation rate) is expected by both suppliers and demanders in the loanable funds market, then

		the demand for loanable funds curve will shift rightward, and the supply of loanable funds curve will shift leftward.
		the demand for loanable funds curve will shift leftward, and the supply of loanable funds curve will shift rightward.
		both the demand for loanable funds curve and the supply of loanable funds curve will shift leftward.
		both the demand for loanable funds curve and the supply of loanable funds curve will shift rightward.

1.) An excise tax on a good typically reduces the net price received by the seller. (TRUE/FALSE)

2.) The burden of an excise tax on gasoline falls entirely on consumers of gasoline. (TRUE/FALSE)

3.) Rent controls are one of the few examples of a price floor in market economies. (TRUE/FALSE)

4.) Imposing a price ceiling below the equilibrium price of a good often leads to_____.

A) A greater supply of the good

B) A black market for the good

C) A rightward shift of the supply curve for the good.

D) A leftward shift of the demand curve for the good.

E) All of these

5.) Which of the following is true of price floors and ceilings?

A) Lead to the same price and quantity as in competitive market.

B) Lead to technical efficiency

C) Cause the demand curve to shift left

D) Usually result from government intervention

E) Cause the supply curve to shift right.

6.) Price ceilings often lead to black markets. (TRUE/FALSE)

7.) When minimum wage is above the equilibrium wage what occurs?

A) There will be a shortage of labor

B) There will be no effect on the number of people employed

C) There will be an increase in unemployment rate

D) There will be a decrease in unemployment rate

8.) An excise tax on a good typically reduces the price paid by the consumer (TRUE/FALSE)

9.) If a price ceiling is below the equilibrium price is imposed on a market, it will cause the quantity demanded to rise and the quantity supplied to fall. (TRUE/FALSE)

10.) Price floors often lead to black markets. (TRUE/FALSE)

11.) If an excise tax is imposed on restaurant meals what occurs?

A) Fewer meals will be produced and sold

B) More meals will be produced and sold

C) Market price of the meals will fall

D) Government tax revenue will fall.

mauveyellowjacket715

Recently the government imposed a new requirement that gasoline contains 10% ethanol; the ethanol is made from corn. This new government ethanol mandate has affected the market for cereal made from corn (such as corn flakes and Captain Crunch).

a) According to the competitive market model, how do the government's new ethanol requirement affect the equilibrium average price and quantity of cereal made from corn in the U.S.? Do corn-based cereal prices rise, or fall, or stay the same? Does the equilibrium quantity of boxes of corn-based cereal rise, or fall or stay the same? Explain your answer carefully.

b) What is the proper way to illustrate the effect of the government's ethanol requirement on the corn-based cereal market? (Does the demand curve shift up/right, or does the demand curve shift down/left, or does the supply curve shift up/left, or does the supply curve shift down/right?

greyraccoon805

EC 201 Study Guide - Final Guide: Economic Equilibrium, Demand Curve, Microeconomics

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