ECO/365 PRINCIPLES OF MICROECONOMICS The Latest Version A+ Study Guide
********************************************** ECO 365 Entire Course Link https://uopcourses.com/category/eco-365/ ********************************************** ECO 365 Week 2 Apply Market Dynamics and Efficiency Homework Review the Week 2 Market Dynamics and Efficiency Quiz in preparation for this assignment. Complete the Week 2 Market Dynamics and Efficiency Homework in McGraw-Hill ConnectÂŽ. These are randomized questions. Note: You have only one attempt available to complete assignments. Grades must be transferred
manually to eCampus by your instructor. Don't worry, this might happen after the due date. The demand and supply schedules for sunscreen at a small beach are shown below. Market for Sunscreen Quantity Quantity Price
of
of
(dollars Sunscreen Sunscreen per
Demanded Supplied
bottle)
(bottles)
(bottles)
$35
1,000
8,500
30
2,000
7,000
25
3,000
5,500
20
4,000
4,000
15
5,000
2,500
10
6,000
1,000
Instructions: Enter your answers as a whole number.
a. If the price is $15 per bottle, how many bottles of sunscreen are demanded and supplied? Qd = bottles Qs = bottles In this case, there would be upward pressure on the price. b. What is the equilibrium price and quantity in the market for sunscreen? P= Q = bottles
The market for ice cream bars on a hot day at the local beach is summarized in the table below. Market for Ice Cream Bars
Quantity Quantity of IceIce Price
Cream
of
Cream
BarsBars
(dollars) Demanded
Supplied
$1.40
310
100
1.60
280
140
1.80
250
180
2.00
220
220
2.20
190
260
2.40
160
300
2.60
130
340
Instructions: Enter your answer as a whole number. Determine whether there is a surplus or a shortage at a price of $1.80 per ice cream bar, and determine the size of the surplus or shortage.
There is a shortage in a market for a product when Multiple Choice
the current price is lower than the equilibrium price. quantity demanded is lower than quantity supplied. demand is less than supply. supply is less than demand.
Assume that the graphs show a competitive market for the product stated in the question.
Select the graph above that best shows the change in the market
for
leather
coats
when
leather
become more fashionable among young consumers. Multiple Choice
coats
graph (1) graph (2) graph (3) graph (4)
Use the following graph for the milk market to answer the question below.
There would be excess production of milk whenever the price is Multiple Choice
greater than $1.50 per gallon. greater but not less than $2.00 per gallon. less but not greater than $2.00 per gallon. less than $1.50 per gallon.
There is a surplus in a market for a product when Multiple Choice
quantity demanded is greater than quantity supplied. demand is less than supply.
quantity demanded is less than quantity supplied. the current price is lower than the equilibrium price.
Use the following graph for the milk market to answer the question below.
In this market, the equilibrium price is ____ and equilibrium quantity is ___ Multiple Choice
$1.50 per gallon; 30 million gallons.
$1.50 per gallon; 28 million gallons. $1.00 per gallon; 35 million gallons. $28 per gallon; 150 million gallons.
In competitive markets, a surplus or shortage will Multiple Choice
cause changes in the quantities demanded and supplied that tend to intensify the surplus or shortage. cause changes in the quantities demanded and supplied that tend to eliminate the surplus or shortage. cause shifts in the demand and supply curves that tend to eliminate the surplus or shortage.
never exist because the markets are always at equilibrium.
Use the following table to answer the question below.
Quantity Demanded
perQuantity Supplied
Price per Unit
Year
per Year
$5
2,000
0
10
1,800
300
15
1,600
600
20
1,400
900
25
1,200
1,200
30
1,000
1,500
In this competitive market, the price and quantity will
settle at Multiple Choice $25 and 1,200 units. $15 and 1,600 units. $10 and 1,800 units. $20 and 900 units.
There is an excess demand in a market for a product when Multiple Choice
quantity demanded is greater than quantity supplied. quantity demanded is less than quantity supplied.
the current price is higher than the equilibrium price. supply is less than demand.
The marginal benefit of an additional beach towel is $12. The marginal cost of producing an additional beach towel is $8. If producers are minimizing the average costs of production, then we can conclude: beach towel production is allocatively efficient but not productively efficient. beach towel production is neither allocatively nor productively efficient. beach towel production is both allocatively and productively efficient. beach towel production is not allocatively efficient but is
productively efficient.
The difference between the maximum price a consumer is willing to pay for a product and the actual price the consumer pays is called Multiple Choice
utility. consumer demand. consumer surplus. market failure.
Consumer surplus arises in a market because Multiple Choice
at the current market price, quantity supplied is greater than quantity demanded. at the current market price, quantity demanded is greater than quantity supplied. the market price is below what some consumers are willing to pay for the product. the market price is higher than what some consumers are willing to pay for the product.
If the equilibrium wage for fast-food restaurants is $8 and the government enforces a minimum wage of $15
Multiple Choice
overall, society will be better off. workers will get paid less. fast-food restaurants will hire fewer workers. workers will be able to find more jobs.
In the market for a particular pair of shoes, Jena is willing to pay $75 for a pair while Jane is willing to pay $85 for a pair. The actual price that each has to pay for a pair of shoes is $65. What is the combined amount of consumer surplus for Jena and Jane? Multiple Choice
$215. $10. $130. $30.
A producer’s minimum acceptable price for a particular unit of a good Multiple Choice
will, for most units produced, equal the maximum that consumers are willing to pay for the good. must cover the wages, rent, and interest payments
necessary to produce the good but need not include profit. is the same for all units of the good. equals the marginal cost of producing that particular unit.
Charlie is willing to pay $10 for a T-shirt that is priced at $9. If Charlie buys the T-shirt, then his consumer surplus is Multiple Choice
$19. $0.90.
$90. $1.
Graphically, producer surplus is measured as the area Multiple Choice
above the supply curve and above the actual price. above the supply curve and below the actual price. under the demand curve and below the actual price. under the demand curve and above the actual price.
Productive efficiency occurs at the point where Multiple Choice
marginal benefit exceeds marginal cost by the greatest amount. the production technique minimizes economic surplus. the production technique minimizes cost. consumer surplus exceeds producer surplus by the greatest amount.
The market supply curve indicates the Multiple Choice
total revenues that sellers would receive from selling various quantities of the product. total amount that buyers will pay in buying a given quantity of the product. maximum prices that buyers are willing and able to pay for the product. minimum acceptable prices that sellers are willing to accept for the product.
Which of the following goods is both nonrival and nonexcludable? A hot dog at a hot dog stand
A tuna in the ocean A soccer match in a stadium The light from a lighthouse at a harbor entrance
Which of the following goods is nonrival? A soccer match in a stadium A visit to the doctor at her office A pizza at a pizza parlor A tuna in the ocean
The production of paper often creates a waste product that pollutes waterways. Assume the producer of paper does not directly pay to dispose of the waste in the water. In this case, the price of paper will be
the socially
efficient price and the amount of paper produced will be the socially efficient amount.
If one person’s consumption of a good does not preclude another’s consumption, the good is said to be Multiple Choice
nonexcludable.
rival in consumption. nonrival in consumption. excludable.
If there are external benefits associated with the consumption of a good or service Multiple Choice
the private demand curve will overestimate the true demand curve. consumers will be willing to pay for all these benefits in private markets. the market demand curve will be the vertical summation of the individual demand costs.
the private demand curve will underestimate the true demand curve.
If a good that generates negative externalities were priced to take these negative externalities into account, its Multiple Choice
price would decrease, and its output would increase. price would remain constant and output would increase. price would increase but its output would remain constant.
price would increase, and its output would decrease.
What are the two characteristics that differentiate private goods from public goods? Multiple Choice
ownership and usage negative externality and positive externality rivalry and excludability marginal cost and marginal benefit
A negative externality or spillover cost (additional social cost) occurs when
Multiple Choice
the price of the good exceeds the marginal cost of producing it. firms fail to achieve allocative efficiency. the total cost of producing a good exceeds the costs borne by the producer. firms fail to achieve productive efficiency.
Where there are spillover (or external) benefits from having a particular product in a society, the government can make the quantity of the product approach the socially optimal level by doing the following except Multiple Choice
providing the product itself. taxing the sellers of the product. subsidizing the buyers of the product. subsidizing the sellers of the product.
If some activity creates external benefits as well as private benefits, then economic theory suggests that the activity ought to be Multiple Choice subsidized. prohibited. taxed. left alone.