ECO 102 Macroeconomics Unit 2 Milestone 2 Sophia Course

ECO 102 Macroeconomics Unit 2 Milestone 2 Sophia Course Click below link for Answer https://www.sobtell.com/q/tutorial/default/206966-eco-102-macroeconomics-unit-2-milestone2-sophia-c https://www.sobtell.com/q/tutorial/default/206966-eco-102-macroeconomics-unit-2-milestone2-sophia-c

1 Which graph accurately represents Silvia's consumer surplus if she is willing to pay up to $20,000 for a new car, but she finds one on sale for $15,000? 

Consumer Surplus 2 If an excise tax is imposed on a product, which of the following will happen?  The price will fall until it reaches equilibrium.  The higher price will cause consumers to purchase more of the product.  A shortage will occur.  The supply curve will shift upward by the amount of the tax.

Taxes and Subsidies 3 Select the example below that corresponds to consumer surplus.  George is willing to spend up to $1,000 on a laptop but is able to find one for $500.  The price of a house in a certain neighborhood is $300,000 for three bedrooms and two bathrooms. At this price, the market is clearing.  The price of gold increases to $300 per ounce, so many people start selling their gold.

 Emily usually works as a babysitter for a price of $15 per hour but is willing to work for as low as $10 per hour.

Consumer Surplus 4 Select the graph that corresponds to a shift in the supply curve. 

Shifts in Supply 5 A popular smartphone consistently sold out until a study was released. It found that users of that particular brand were ten times more likely to get brain cancer than users of other smartphone brands.

Which of the graphs below best represents what happened to demand for the smartphones associated with a higher risk of brain cancer? 

Shifts in Demand 6 George wants to get rid of his old car so he can purchase a newer model. He has figured out that he will not accept a price lower than $3,000, but a buyer offers to pay $5,000 for the car.

How much producer surplus will George receive from this sale?  $5,000  $3,000  $8,000  $2,000

Producer Surplus

7 Economically speaking, which of the kinds of change below would be caused when fishermen along the coast of the Gulf of Mexico find that they have not caught nearly as many shrimp as the year before, due to an oil spill?  No change in supply or demand  Shift in the supply curve  Movement along the supply curve  Shift in the demand curve

Law of Supply Shifts in Supply 8 Which of the following is true about a market at equilibrium price?  Demand is low because the price is so high.  At the prevailing price, there is no market basis for the price to change.  There tend to be shortages because the price is so low.  The market does not clear.

Prevailing Price 9 The people of a certain Mediterranean village always eat salad with balsamic vinegar and olive oil as dressing.

If the olive crop fails one year because of a terrible storm, what most likely would happen to the demand for balsamic vinegar that the people of this village purchase? 

The demand for balsamic vinegar purchased will decrease because it is a complement to olive oil.  The demand for balsamic vinegar purchased will increase because it is a complement to olive oil.  The demand for balsamic vinegar purchased will increase because vinegar and olive oil are substitutes.  The demand for balsamic vinegar purchased will decrease because it is a substitute for olive oil.

Shifts in Demand 10 Which statement below is NOT a reason why the aggregate demand curve slopes downward?  As the price level falls, consumption and investment increase.  As the price level falls, consumption increases.  As the price level falls, consumption and investment decrease.  As the domestic exchange rate falls, foreigners purchase more domestic goods and services.

Aggregate Demand 11 Select the TRUE statement below regarding aggregate supply in the long and short run.  In the short run, there is no relationship between price level and RGDP.  In the long run, changes in price will affect output.  The discovery of new resources can cause the LRAS curve to move.

 If production is below the LRAS, it will eventually have to fall back.

Aggregate Supply 12 If a certain brand of furry boots are suddenly all the rage and the market price increases to $500 a pair, but very few people buy them because they are too expensive, which of the following will happen next?  The price will fall until it reaches equilibrium.  The price will continue to rise indefinitely.  The price will rise until it reaches equilibrium.  The price will stay the same.

Prevailing Price 13

If demand becomes more elastic, which of the following will happen, as demonstrated by the graph shown here?  The incidence of the subsidy on the producer will decrease.  The incidence of the subsidy on the consumer will increase.  Both producer and consumer will receive the incidence of the subsidy in equal amounts.  The incidence of the subsidy on the consumer will decrease.

Taxes and Subsidies

14

Assuming ceteris paribus, what principle behind the law of demand is this graph is illustrating?  Barring special circumstances, an decrease in price will always lead to a decrease in quantity.  Barring special circumstances, an increase in price will always lead to an increase in quantity.  Barring special circumstances, a decrease in price will have no effect on an increase or decrease in quantity.  Barring special circumstances, an increase in price will always lead to a decrease in quantity.

Law of Demand 15 Select the statement below that is true of ONLY price ceilings.  Are binding when they are above equilibrium  The market clears, there are no shortages or surpluses  The market is allowing for trade to occur between buyers and sellers  Can create a shortage of product

Binding & Non-Binding Constraints 16 If the market price for fast food wages is $7 per hour, at which wage level would a price floor be binding?  $1

 $15  $7  $6

Binding & Non-Binding Constraints 17 What economic rule is generally used in the decision of a regulator to impose a binding price constraint?  When it transfers surplus from producers to consumers  When it creates deadweight loss  When consumer and producer surplus are maximized  When the benefit to a specific group of people is greater than deadweight loss

Deadweight Loss 18 You skipped this question and it was marked incorrect.

When an economy is producing to the left of the LRAS, __________.  contractionary monetary policies can be put in place  expansionary fiscal policies can be put in place  the LRAS curve will shift to the left to meet the current price level and GDP  resources are over-utilized

Equilibrium

If the graph shown here represents supply and demand for ethanol, at which of the points below would it be best to put a binding price ceiling instituted by the government?  B  C  A  There is not enough information to answer the question.

Binding & Non-Binding Constraints 2 Jack is willing to pay as much as $1,300 for a new camera but is happy to find one he likes that costs $400.

Select the term below that corresponds to this situation.  Producer surplus  Consumer surplus  Ceteris paribus  Equilibrium

Consumer Surplus 3 Which of the following will cause movement along the demand curve? 

The market price of a pound of beef increases from $5 to $7.  The number of consumers who eat beef decreases.  The price of salt goes down, so the price of black pepper goes up.  The price of Brand A orange juice decreases, so the price of Brand B orange juice decreases.

Law of Demand 4 Select the graph that corresponds to a shift in the supply curve.    

Shifts in Supply 5 If an excise tax is imposed on a product, which of the following will happen?  The higher price will cause consumers to purchase more of the product.  A shortage will occur.  The price will fall until it reaches equilibrium.  The supply curve will shift upward by the amount of the tax.

Taxes and Subsidies 6 Which of the following is true about binding price floors? 

They will transfer deadweight loss from the producer to the consumer.  They maximize consumer and producer surplus.  They do not change consumer and producer surplus at all.  They will create deadweight loss.

Deadweight Loss 7 Economically speaking, which of the kinds of change below would be caused when an executive at a petroleum company develops a new way to extract petroleum from the ground?  Shift in the supply curve  Movement along the supply curve  No change in supply or demand  Shift in the demand curve

Law of Supply Shifts in Supply 8 Select the statement below that is true of long run aggregate supply curves.  There is a variable quantity of RGDP.  Changes in price level affect output.  There is a positive relationship between price level and RGDP. 

There is no relationship between price level and RGDP.

Aggregate Supply 9 Which graph accurately represents Rachel's consumer surplus if she is willing to pay up to $10,000 a year for college tuition, but she finds a school with a tuition of $5,000 a year?    

Consumer Surplus 10 In economic terms, which of the following happened when cupcakes went from being homemade treats to being specialized gourmet goodies with multiple TV shows devoted to them and people waiting in line for them?  Changing tastes created a shift in the supply curve.  A change in the quantity of cupcakes demanded caused movement along the demand curve.  As the price of cupcakes rose, so did demand.  Changes in public tastes created a shift in the demand curve.

Shifts in Demand 11

Which of the following would be true if demand became more inelastic?  The consumer will receive more of the benefit of the subsidy.

 QS will increase.  The producer will receive more of the benefit of the subsidy.  PS will increase.

Taxes and Subsidies 12 If the price of gasoline is too low and vendors sell out quickly, which of the following will happen next?  Consumers will purchase less gasoline.  The price of gasoline will rise to eliminate the shortage.  Consumers will purchase more gasoline.  Producers will lower the price of gasoline.

Prevailing Price 13 Which graph below shows what will happen to Cecilia's demand for designer shoes if she usually buys several pairs each year, but this year she lost her job?    

Shifts in Demand 14 Select the statement below that is true of BOTH price ceilings AND price floors.  This is a form of government policy that alters the market.  Nothing happens if it is placed above equilibrium.  When this is binding, it can cause a surplus.  To be effective it has to be below equilibrium.

Binding & Non-Binding Constraints 15

Based on the graph above, if market price is $19 per unit, what is happening at that market price?  Price is at equilibrium.  The price is too high, so suppliers want to produce less than consumers want.  The price is too high, so suppliers want to produce more than consumers want.  The price is too low so suppliers want to produce less than consumers want.

Prevailing Price 16 When an economy is producing to the left of the LRAS, __________.  expansionary fiscal policies can be put in place

 contractionary monetary policies can be put in place  the LRAS curve will shift to the left to meet the current price level and GDP  resources are over-utilized

Equilibrium 17 Which statement below about producer surplus is NOT true?  Producer surplus is a similar to consumer surplus.  Producer surplus is basically the same as profit.  Producer surplus represents the revenue generated from sales over and above the minimum price at which sellers are willing to sell.  When producer surplus drops to zero, firms stop producing.

Producer Surplus 18 Which statement below regarding aggregate demand is true?  It represents the relationship between price level and the amount of RGDP that producers are willing to produce.  It expresses an inverse relationship between price level and RGDP.  It represents a positive relationship between price level and RGDP.  It represents the fixed amount of RGDP that can be produced.

Aggregate Demand

1 A late-season frost kills most of Florida's orange crop and significantly reduces the availability of oranges.

Which of the following best describes how this change would look? 

Shifts in Supply 2 Laura is willing to pay as much as $1,000 for a wedding dress but is happy to find one she likes that costs $300.

Select the term below that corresponds to this situation.  Producer surplus  Equilibrium  Ceteris paribus  Consumer surplus

Consumer Surplus 3 Which of the following is true about binding price floors?  They do not change consumer and producer surplus at all.  They will transfer deadweight loss from the producer to the consumer.  They maximize consumer and producer surplus. 

They will create deadweight loss.

Deadweight Loss 4 The prevailing market price for smart TVs is $450 and John is willing to pay $600 for a TV.

Which graph accurately represents the amount of consumer surplus?

Consumer Surplus 5 Economically speaking, which of the kinds of change below would be caused when fishermen along the coast of the Gulf of Mexico find that they have not caught nearly as many shrimp as the year before, due to an oil spill?  No change in supply or demand  Shift in the supply curve  Movement along the supply curve  Shift in the demand curve

Law of Supply Shifts in Supply 6 Select the statement below that is true of long run aggregate supply curves.  Changes in price level affect output.  There is no relationship between price level and RGDP.  There is a variable quantity of RGDP.

 There is a positive relationship between price level and RGDP.

Aggregate Supply 7 Which graph below shows what will happen to Cecilia's demand for designer shoes if she usually buys several pairs each year, but this year she lost her job?   

Shifts in Demand 8 Which statement below best describes what will most likely happen, from an economic standpoint, when a music group with growing popularity goes on tour and sells out a certain venue in hours with tickets for $25 apiece?  Nothing changes, since the market is already clearing.  The group will cancel the concert and give everyone a refund.  The group will add more performance dates with tickets at a lower cost.  The price of tickets for future concert dates will rise until it hits equilibrium.

Prevailing Price 9 George wants to get rid of his old car so he can purchase a newer model. He has figured out that he will not accept a price lower than $3,000, but a buyer offers to pay $5,000 for the car.

How much producer surplus will George receive from this sale?  $3,000  $2,000  $5,000  $8,000

Producer Surplus 10 In economic terms, which of the following happened when cupcakes went from being homemade treats to being specialized gourmet goodies with multiple TV shows devoted to them and people waiting in line for them?  Changing tastes created a shift in the supply curve.  As the price of cupcakes rose, so did demand.  A change in the quantity of cupcakes demanded caused movement along the demand curve.  Changes in public tastes created a shift in the demand curve.

Shifts in Demand 11

If a company was forced to adhere to minimum wage laws, the wage that would represent a binding constraint would be represented by which line in the graph shown here?  A  B

 D  C

Binding & Non-Binding Constraints 12 Select the statement below that is true of ONLY price ceilings.  Are binding when they are above equilibrium  Can create a shortage of product  The market clears, there are no shortages or surpluses  The market is allowing for trade to occur between buyers and sellers

Binding & Non-Binding Constraints 13 Which graph below indicates an economic situation that is NOT sustainable?    

Equilibrium 14 Which of the following is true about a market at equilibrium price?  Demand is low because the price is so high.  At the prevailing price, there is no market basis for the price to change.

 There tend to be shortages because the price is so low.  The market does not clear.

Prevailing Price 15

Which of the following would be true if demand became more inelastic?  PS will increase.  The producer will receive more of the benefit of the subsidy.  QS will increase.  The consumer will receive more of the benefit of the subsidy.

Taxes and Subsidies 16 If an excise tax is imposed on a product, which of the following will happen?  The supply curve will shift upward by the amount of the tax.  The higher price will cause consumers to purchase more of the product.  The price will fall until it reaches equilibrium.  A shortage will occur.

Taxes and Subsidies 17

Assuming ceteris paribus, what principle behind the law of demand is this graph is illustrating?  Barring special circumstances, an increase in price will always lead to an increase in quantity.  Barring special circumstances, an increase in price will always lead to a decrease in quantity.  Barring special circumstances, a decrease in price will have no effect on an increase or decrease in quantity.  Barring special circumstances, an decrease in price will always lead to a decrease in quantity.

Law of Demand 18 As the price level falls, people feel as if they have more money, so they spend more, which influences which of the following, in economic terms?  Aggregate supply  Aggregate demand  Interest rate effect  Exchange rate effect

Aggregate Demand

If the demand curve is more elastic than the supply curve, and a tax is imposed, which of the following will happen?

 The price will rise by the amount of the tax.  The seller will bear more of the burden of the tax.  The consumer will bear more of the burden of the tax.  A shortage will be created.

If the market price of a product happens to be at equilibrium, which of the following will happen next?  Surplus will be created.  The price will increase and consumers will purchase less of that item.  The price will decrease and consumers will purchase more.  Nothing will happen since the market is already clearing.

Which of the following is true about price ceilings?  The moment when a price ceiling is above equilibrium, it prevents price increases.  More sellers are willing to sell when a price ceiling has been set.  Binding price ceilings can cause shortages of certain products.  A price ceiling has to be higher than equilibrium in order to be binding.

Roberto suspected that traditional four-year higher education in the U.S. was being influenced by the recession. Most states cut the amount they contribute to public universities,

making it much more expensive for them to operate in the traditional format. This caused many universities to invest in nontraditional, technology-based educational models.

Which graph below best depicts the change Roberto is seeing in the traditional four-year higher education market in the U.S.?

Select the event below that will NOT cause a shift in demand.  The number of people who consume butter increases.  The market price for four tires increases to $300.  The fad for beanbag animals comes to an end.  The unemployment rate increases, so people can purchase less.

Which of the following is true about binding price floors?  They will create deadweight loss.  They maximize consumer and producer surplus.  They do not change consumer and producer surplus at all.  They will transfer deadweight loss from the producer to the consumer.

Which of the following will cause movement along the demand curve?  The number of consumers who eat beef decreases.  The price of Brand A orange juice decreases, so the price of Brand B orange juice decreases.  The price of salt goes down, so the price of black pepper goes up.

 The market price of a pound of beef increases from $5 to $7.

Which of the following would NOT cause a shift in the supply curve for cheese?  The results of a medical study show that eating too much cheese can lead to premature aging.  A celebrity chef develops a new technique for making cheese that makes it easier to increase output.  Thousands of dairy cattle come down with a mysterious illness and need to be quarantined.  The price of feed for the dairy cattle goes up significantly.

Which of the following is generated if market price exceeds the price at which producers are willing to sell?  Consumer surplus  Producer surplus  Deadweight loss  LRAS

Which of the following is true about a market at equilibrium price?  Demand is low because the price is so high.  There tend to be shortages because the price is so low.  At the prevailing price, there is no market basis for the price to change. 

The market does not clear.

A popular smartphone consistently sold out until a study was released. It found that users of that particular brand were ten times more likely to get brain cancer than users of other smartphone brands.

Which of the graphs below best represents what happened to demand for the smartphones associated with a higher risk of brain cancer? 

Which statement below regarding aggregate demand is true?  It expresses an inverse relationship between price level and RGDP.  It represents the fixed amount of RGDP that can be produced.  It represents a positive relationship between price level and RGDP.  It represents the relationship between price level and the amount of RGDP that producers are willing to produce.

Which statement below will be true if demand for a product is inelastic and a tax is imposed on it?  Producers will not be able to raise the price to cover most of the tax.  Consumers cannot easily find substitutes.  Both consumers and producers will bear the burden of the tax equally.  Producers will have to bear most of the burden of the tax.

Which of the following is true about binding price floors?  They do not change consumer and producer surplus at all.

 They will create deadweight loss.  They will transfer deadweight loss from the producer to the consumer.  They maximize consumer and producer surplus.