ECON 2001.01 Study Guide - Midterm Guide: Milkshake, Deadweight Loss, Price Ceiling
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Practice questions for midterm 2
(Here are 28 questions, but the exam will have 30 questions.)
1) Nick can purchase each milkshake for $2.
For the first milkshake purchased Nick is willing to pay $4,
for the second milkshake $3,
for the third milkshake $2 and for the fourth milkshake $1.
What is the value of Nick's consumer surplus for the milkshakes he buys?
2) The figure above shows Clara's demand for CDs. If the price for a CD is $15, then Clara
A) receives no consumer surplus on the 6th CD she buys.
B) receives a total of $10 of consumer surplus.
C) will buy no CDs.
D) receives a total of $40 of consumer surplus.
3) The figure above shows Clara's demand for CDs. If the price of a CD were to increase from
$15 to $25, Clara's total consumer surplus for all the CDs she buys would
A) decrease by $40.
B) remain unchanged.
C) decrease by $90.
D) increase by $80.
4) Suppose there are four firms that are each willing to sell one unit of a good.
Each firm has a different minimum price that they are willing to sell for: Firm A $6, Firm B
$7, Firm C $10, and Firm D $12. If the market price is $11 then the market supply for this
good will be
A) 3 units.
B) 4 units.
C) 1 unit.
D) 2 units.
5) In the figure above, when the price of a CD is $8.00, total producer surplus from all the CDs
B) greater than at $10.00 per CD.
C) $20 million.
D) $10 million.
6) Resource use is efficient when
A) marginal social benefit exceeds marginal social cost.
B) marginal social cost is decreasing.
C) marginal social benefit equals marginal social cost.
D) marginal social benefit is increasing.
7) Based on the above table, which of the following is the efficient quantity of output?
D) None of the above answers is correct.
8) A price ceiling ________.
A) makes it illegal to charge a higher price than the specified price
B) is more effective when it is higher
C) is necessary to maintain market equilibrium
D) occurs in housing markets only
Practice questions for midterm 2 (here are 28 questions, but the exam will have 30 questions. ) Good luck: nick can purchase each milkshake for . For the first milkshake purchased nick is willing to pay , for the second milkshake , for the third milkshake and for the fourth milkshake . What is the value of nick"s consumer surplus for the milkshakes he buys: , , , . Answer: c: the figure above shows clara"s demand for cds. Answer: a: the figure above shows clara"s demand for cds. If the price of a cd were to increase from. to , clara"s total consumer surplus for all the cds she buys would: decrease by , remain unchanged, decrease by , increase by . Answer: a: suppose there are four firms that are each willing to sell one unit of a good.