ECON 2001.01 Study Guide - Midterm Guide: Milkshake, Deadweight Loss, Price Ceiling

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Published on 28 Sep 2018
School
Ohio State University
Department
Economics
Course
ECON 2001.01
Professor
Practice questions for midterm 2
(Here are 28 questions, but the exam will have 30 questions.)
GOOD LUCK!
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?

A) \$2
B) \$9
C) \$3
D) \$10
2) The figure above shows Clara's demand for CDs. If the price for a CD is \$15, then Clara
B) receives a total of \$10 of consumer surplus.
D) receives a total of \$40 of consumer surplus.
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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
will be
A) zero.
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.
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D) marginal social benefit is increasing.
Price
(dollars)
Quantity
supplied
(marginal
social cost)
Quantity
demanded
(marginal
social benefit)
0
0
31
1
4
28
2
8
24
3
12
20
4
16
16
5
20
12
6
24
8
7
28
4
8
32
0
7) Based on the above table, which of the following is the efficient quantity of output?
A) 31
B) 16
C) 32
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
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Document Summary

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.