1. Christine has a linear demand curve for candy. If she wants to see her
consumer surplus ____, she would like to see a _____ in the market price of
candy.
a. Increase; decrease b. Not change; decrease
c. Decrease; decrease d. Increase; increase
2. Total revenue is _____
a. The price effect times the quantity
effect
b. Total sales less total cost
c. The price of a good times the
quantity of the good that is sold
d. The price of a good divided by the
amount of the good sold
3. The cost of sensors used in making digital cameras fall while a successful
ad campaign makes digital cameras more fashionable. As a result, use the
equilibrium price of digital cameras _____ and the equilibrium quantity_____.
a. May increase, decrease or stay the same, increase
b. Increases; may increase, decrease, or stay the same
c. Increases; increases
d. Decreases; increases
4. The most likely reason the government implements a _____ is because it
feels the price is too high for _____.
a. Price ceiling; producers b. Price floor; consumers
c. Price floor; producers d. Price ceiling; consumers
5. Suppose that an increase in the price of a good leads to an increase in total
revenue. Ignoring other factors (such as supply), at its current price in the
good must be.
a. Inferior b. Price-elastic
c. Perfectly price-elastic d. Price-inelastic
6. An inward shift in the US economy’s production possibility frontier could
represent which statement?
a. US workers moving from NJ to Mas
b. US economic growth as workers move to different states
c. US workers moving to Canada
d. US economic growth
7. A competitive market with flexible price and many buyers and sellers will:
a. Reach equilibrium b. Eliminate surpluses
