Author: R7AL -

Question 17 pts
From 2005 to 2012, the world price of corn skyrocketed from less than $100 per metric ton to over $300 per metric ton.  According to the St. Louis Fed, the price of corn peaked in 2012 at $332 per metric ton (https://fred.stlouisfed.org/series/PMAIZMTUSDM (Links to an external site.)).

Most of this increase was driven by the increased demand for corn ethanol.  Corn ethanol can be used as fuel and a substitute for gasoline.  Increased demand for corn ethanol (remember the popularity of Priuses in this era) drove corn prices up.  

Corn and soybeans are often but not always produced on similar land.  Farmers can grow soybeans one year and corn the next in a corn-soybean cycle.  Or they can grow corn two years in a row and soybeans in the third year, a corn-corn-soybean cycle.  Or they can grow only corn.

Explain what effect the increased demand for corn should have had on soybean markets.  Were soybean growers (farms who only grow soybeans) better off, worse off, or unaffected by higher corn prices?

This is not a complicated question.  Think supply and demand, and think opportunity cost. Don't overcomplicate things!

Question 21 pts
(Table: Production in Chile and Venezuela) According to the table, the opportunity cost of producing one desk in Chile is _________, and the opportunity cost of producing one desk in Venezuela is _______.
 
Labor units required to produce:
| One nightstand | One desk
Chile | 2 | 5
Venezuela | 3 | 9
Group of answer choices

2.5 nightstands; three nightstands

0.4 nightstand; 0.33 nightstand

10 nightstands; 27 nightstands

two nightstands; three nightstands
 
Flag this Question
Question 31 pts
(Table: Production in Chile and Venezuela) According to the table, the opportunity cost of producing one nightstand in Chile is _________, and the opportunity cost of producing one nightstand in Venezuela is _______.
 
Labor units required to produce:
| One nightstand | One desk
Chile | 2 | 5
Venezuela | 3 | 9
Group of answer choices

five desks; nine desks

five nightstands; nine nightstands

0.4 desk; 0.33 desk

2.5 nightstands; three nightstands
 
Flag this Question
Question 41 pts
(Table: Production in Chile and Venezuela) According to the table, which of the following statements is TRUE?
 
Labor units required to produce:
| One nightstand | One desk
Chile | 2 | 5
Venezuela | 3 | 9
Group of answer choices

Chile has a comparative advantage in nightstands.

Chile has a comparative advantage in desks.

Chile has a comparative advantage in nightstands and desks.

Venezuela has an absolute advantage in nightstands and desks.
 
Flag this Question
Question 51 pts
Which society will be wealthier: Society A in which everyone produces their own food, clothes, and medicine, or Society B in which people specialize (a farmer, a tailor, a doctor):
Group of answer choices

Society B

Society A

No answer text provided.

No answer text provided.
 
Flag this Question
Question 61 pts
Suppose Thailand can produce four PlayStations or three Xboxes with one unit of labor, and South Korea can produce one PlayStation or two Xboxes with one unit of labor. If Thailand can trade only with South Korea, then the theory of comparative advantage suggests that:
Group of answer choices

Thailand should produce both Playstations and Xboxes, and import nothing from South Korea.

Thailand should import both Playstations and Xboxes from South Korea.

Thailand should specialize in producing Playstations and import Xboxes from South Korea.

Thailand should specialize in producing Xboxes and import Playstations from South Korea.
 
Flag this Question
Question 71 pts
Which of the following is the definition of quantity demanded?
Group of answer choices

how much buyers are willing and able to buy at different prices.

the amount that buyers are willing and able to buy at a particular price.

how much sellers are willing and able to sell at different prices.

the amount that sellers are willing and able to sell at a particular price.
 
Flag this Question
Question 81 pts

Figure: Demand Curve For Hats
Refer to the figure. What is the maximum price per hat that buyers are willing to pay for 3,500 hats?
Group of answer choices

60

45

30

15
 
Flag this Question
Question 91 pts

Figure: Demand Curve For Hats
Refer to the figure. What is the maximum number of hats that buyers are willing and able to pay at a price of $45 per hat?
Group of answer choices

1,500

0

2,500

4,500
 
Flag this Question
Question 101 pts
John and Markus enjoy the food at a restaurant named El Pollo Rico. John values a meal there at $15, and Markus values it at $26. If the restaurant charges only $10 a meal, what is John and Markus’ joint consumer surplus from a meal at El Pollo Rico?
Group of answer choices

$41

$21

$16

$31
 
Flag this Question
Question 111 pts
Which of the following would cause the demand curve for hamburger buns to shift right?
Group of answer choices

a rise in the price of hamburger buns

a rise in the price of hamburgers

a fall in the price of hamburger buns

a fall in the price of hamburgers
 
Flag this Question
Question 121 pts
When does a surplus occur?
Group of answer choices

When the quantity supplied is greater than the quantity demanded.

When the quantity demanded is greater than the quantity supplied.

When workers are more productive than expected.

When more people want to buy a good than want to sell it.
 
Flag this Question
Question 131 pts
When does a shortage occur?
Group of answer choices

When the quantity demanded is greater than the quantity supplied.

When the quantity supplied is greater than the quantity demanded.

When the price of a good is too high.

When the quantity supplied is zero.
 
Flag this Question
Question 141 pts
Holding all else equal, if demand increases, market price will be ______ at the new equilibrium point.
Group of answer choices

either higher or lower

higher

the same

lower
 
Flag this Question
Question 151 pts
Holding all else equal, if demand increases, the quantity exchanged will be ______ at the new market equilibrium point.
Group of answer choices

either larger or smaller

smaller

the same

larger
 
Flag this Question
Question 161 pts
After a hurricane in Florida destroys half of the orange crop, economists predict:
Group of answer choices

a decrease in both orange prices and orange sales.

an increase in orange prices and a decrease in orange sales.

an increase in both orange prices and orange sales.

a decrease in orange prices and an increase in orange sales.
 
Flag this Question
Question 171 pts
Technological advances have increased the supply of noise-cancelling headphones. As a result of this the:
 
Group of answer choices

quantity demanded for noise-cancelling headphones will increase.

quantity supplied of noise-cancelling headphones will increase, putting downward pressure on the price of noise-cancelling headphones.

demand and supply of noise-cancelling headphones will both increase.

demand for noise-cancelling headphones will increase, putting downward pressure on the price of noise-cancelling headphones.
 
Flag this Question
Question 181 pts
The Price Elasticity of Demand is:
Group of answer choices

the change in the firm's total revenue when prices change.

the responsiveness of quantity demanded to changes in the price of the product.

exactly the same as the slope of the demand curve.

the responsiveness of price to changes in the quantity demanded of the product.
 
Flag this Question
Question 191 pts
Why do supply curves tend to be more elastic over time?
Group of answer choices

Sellers have time to adjust and increase production.

All of the answers are correct.

Consumers have time to look for substitutes for the good.

Consumers have time to reduce their consumption of the good.
 
Flag this Question
Question 201 pts
Because of aging requirements, it takes many years to make fine whisky. If a technology were invented that made it possible to create fine whiskey literally overnight, how would the short-run supply of fine whiskey change?
Group of answer choices

It would become less elastic.

It would become more elastic.

Its elasticity would remain the same.

It is impossible to say anything about the change.
 
Flag this Question
Question 211 pts
In the market for backpacks, 100 backpacks are sold at $40 each. Then a fall in prices results in sales of 500 backpacks at a price of $35 each. Using the midpoint method, what is the absolute value of the elasticity of demand for backpacks?
 
Group of answer choices

.1

.5

2

8
 
Flag this Question
Question 221 pts
If the price of cocoa rises by 20%, the quantity supplied of cocoa rises by 8%. What is the elasticity of supply?
Group of answer choices

5

.2

2

.4
 
Flag this Question
Question 231 pts
If the price of Good Y falls from $10 to $8, and the quantity supplied of it falls from 1,000 units to 500 units, the price elasticity of supply is:
Group of answer choices

2.25

3

2.67

1.33
 
Flag this Question
Question 241 pts

(Figure: Tax on Liquor Sales) A per-unit tax is imposed on sellers of liquor.  This shifts the supply curve from S_0 to S_1. Calculate the amount of the tax using the figure below.
Group of answer choices

2

4

1

3
 
Flag this Question
Question 251 pts

(Tax on Liquor Sales)  Suppose a per-unit tax imposed on liquor sellers shifts the supply curve from S_0 to S_1. What is the equilibrium quantity sold under the tax?
Group of answer choices

12

16

4

10
 
Flag this Question
Question 261 pts

(Figure: Tax on Liquor Sales) A per-unit tax imposed on liquor sellers shifts the supply curve from S_0 to S_1. With the tax, buyers pay ________ and sellers receive ________.
Group of answer choices

$6; $3

$3; $4

$3; $6

$6; $6
 
Flag this Question
Question 271 pts

(Figure: Tax on Liquor Sales) If a $3 tax per unit purchased was placed on the buyers of liquor instead of the sellers, buyers would pay ________ and sellers would receive
Group of answer choices

$3; $6

$4; $3

$6; $3

$4; $6
 
Flag this Question
Question 281 pts
If the city of Pittsburgh decided to tax cigarettes at $2/pack, what would happen to the price of a pack of cigarettes in Pittsburgh?  Assume that the demand for cigarettes is inelastic relative to the supply of cigarettes.
Group of answer choices

It would go up, but by much less than $2.

It would go down by nearly $2.

It would go down, but by less than $2.

It would go up by nearly $2.
 
Flag this Question
Question 291 pts
When will a tax impose the greatest deadweight loss?
Group of answer choices

When supply is inelastic and demand is elastic.

When both supply and demand are inelastic.

When supply is elastic and demand is inelastic.

When both supply and demand are elastic.
 
Flag this Question
Question 301 pts
Brazil is the world's largest sugarcane producer, and sugarcane can be used for producing sugar and the fuel ethanol for automobiles. Which sequence of events is correct?
Group of answer choices

Rising oil prices cause Brazilian producers to shift sugarcane production from the fuel ethanol to sugar. The increase in sugar supply decreases the price of candy bars.

Falling oil prices cause Brazilian producers to shift sugarcane production from the fuel ethanol to sugar. The increase in sugar supply decreases the price of candy bars.

Rising oil prices cause Brazilian producers to shift sugarcane production from sugar to the fuel ethanol. The increase in sugar supply raises the price of candy bars.

Falling oil prices cause Brazilian producers to shift sugarcane production from sugar to the fuel ethanol. The increase in sugar supply raises the price of candy bars.
 
Flag this Question
Question 311 pts
If the price of bottled water in a hurricane-devastated area suddenly skyrockets, then bottled water suppliers will:
Group of answer choices

have an incentive to direct bottled water to its lowest-valued uses.

limit the supply of bottled water in the area to sustain the skyrocketing price.

ship more bottled water to the area, and the price will fall.

enjoy high profits at the expense of consumers.
 
Flag this Question
Question 321 pts
Before the Second World War, rubber was harvested from rubber trees.  Increased demand during the war led to a severe scarcity of natural rubber.  Right on the edge of near complete exhaustion of natural rubber supplies, synthetic rubber was invented.  Explain why this turn of good fortune was likely not a coincidence?
Group of answer choices

Natural rubber went out of fashion because of the superior quality of synthetic rubber.

They lacked the incentive to create higher-producing natural rubber trees.

The opportunity cost of planting more rubber trees was high.

Scarcity raised the price of natural rubber, creating the incentive to invent a substitute.
 
Flag this Question
Question 331 pts
How are oil prices and sugar prices related?

Group of answer choices

Governments set the price of sugar (per ton) to equal 45% of the price of a barrel of oil.

Oil prices and sugar prices are not related.

As oil prices increase, producers divert sugarcane from ethanol production to sugar production.

As oil prices decrease, producers divert sugarcane from ethanol production to sugar production.
 
Flag this Question
Question 341 pts

Figure: Supply and Demand Curves for Uber Rides.

Refer to the Figure.  A price ceiling of $10 is imposed on the market for Uber rides.  How many Uber rides are consumers able to buy?
Group of answer choices

310

40

270

290
 
Flag this Question
Question 351 pts

Figure: Supply and Demand Curves for Uber Rides.

Refer to the Figure.  A price ceiling of $10 is imposed on the market for Uber rides.  The price ceiling results in:
 
Group of answer choices

shortage of 270 units.

shortage of 40 units.

surplus of 40 units.

surplus of 270 units.
 
Flag this Question
Question 361 pts

Figure: Supply and Demand Curves for Uber Rides.

Refer to the Figure.  A price ceiling of $12 is imposed on the market for Uber rides, this results in a:
Group of answer choices

surplus of 40 units.

shortage of 0 units.

surplus of 20 units.

shortage of 50 units.
 
Flag this Question
Question 371 pts
The minimum wage causes unemployment mainly among poor, unskilled workers.
Group of answer choices

False

No answer text provided.

No answer text provided.

True
 
Flag this Question
Question 381 pts

Figure: Market for Copper Wire. 
Refer to the figure.  A price ceiling of $4/pound for copper wire is imposed by the government.  What is the dollar amount of lost producer surplus after the price ceiling is imposed?
Group of answer choices

$160

$90

$80

$10
 
Flag this Question
Question 391 pts

Figure: Market for Copper Wire
Refer to the figure. The government imposes a price ceiling of $4/per pound for copper wire.  What is the dollar amount of the deadweight loss after the price ceiling has been implemented?
Group of answer choices

$180

$10

$160

$20
 
Flag this Question
Question 401 pts
What is a private cost?
Group of answer choices

A cost paid by people other than the consumer or the producer trading in the market.

The cost of reaching an agreement.

A cost paid by the consumer or the producer trading in the market.

The cost to everyone trading in all markets.
 
Flag this Question
Question 411 pts
What is an external cost?
Group of answer choices

The cost of reaching an agreement.

A cost paid by the consumer or the producer.

A cost paid by people other than the consumer or the producer trading in the market.

The cost to everyone.
 
Flag this Question
Question 421 pts
What is a social cost?
Group of answer choices

The cost of reaching an agreement.

The cost to everyone.

A cost paid by the consumer or the producer.

A cost paid by people other than the consumer or the producer trading in the market.
 
Flag this Question
Question 431 pts
Quantity of Vaccines | Marginal Benefit to Buyers | Marginal Cost to Sellers | External Benefit | Marginal Social Benefit
1 | $25 | $10 | $15 | ?
2 | $20 | $15 | $15 | ?
3 | $15 | $20 | $15 | ?
4 | $10 | $25 | $15 | ?
5 | $5 | $30 | $15 | ?
The marginal social benefit of the third unit is:
Group of answer choices

$15

$25

$5

$30
 
Flag this Question
Question 441 pts
Quantity of Vaccines | Marginal Benefit to Buyers | Marginal Cost to Sellers | External Benefit | Marginal Social Benefit
1 | $25 | $10 | $15 | ?
2 | $20 | $15 | $15 | ?
3 | $15 | $20 | $15 | ?
4 | $10 | $25 | $15 | ?
5 | $5 | $30 | $15 | ?
What is the market equilibrium quantity? What is the efficient equilibrium quantity?
Group of answer choices

2; 4

3; 5

3; 2

2; 3
 
Flag this Question
Question 451 pts
Quantity of Vaccines | Marginal Benefit to Buyers | Marginal Cost to Sellers | External Benefit | Marginal Social Benefit
1 | $25 | $10 | $15 | ?
2 | $20 | $15 | $15 | ?
3 | $15 | $20 | $15 | ?
4 | $10 | $25 | $15 | ?
5 | $5 | $30 | $15 | ?
How could the government eliminate deadweight loss in this market?
Group of answer choices

Add a $15 tax per unit.

Equated marginal benefit with marginal cost.

Subsidize consumption by $15 per unit.

Outlaw the production of the good.
 
Flag this Question
Question 461 pts
Suppose Chad's loud music externalizes a cost onto his neighbor, Bartholomew. Suppose Chad and Bartholomew decide to solve this problem using the Coase theorem. If they are successful, what is a possible result of the execution of this theorem?
Group of answer choices

Chad pays Bartholomew weekly and refrains from playing music loudly.

Bartholomew pays Chad weekly to refrain from playing music loudly.

The government taxes Chad for his loud music.

Bartholomew and Chad solve their differences in a market for tradable allowances of loud music.