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Skill Assessments
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Economics & Development
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Microeconomics Skill Assessment
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Quiz # 11
Microeconomics Quiz # 11
Instructions
Quiz:
Microeconomics Quiz # 11
Subject:
Elasticities In Microeconomics
Total Questions:
30 MCQs
Time:
30 Minutes
Note
Do not refresh the page while taking the test.
Results along with correct answers will be shown at the end of the test.
Start Quiz
Microeconomics Quiz # 11
End Quiz
Question
1
of 30
00:00
The burden of the tax is more likely to fall on the party that has ______.
Less revenue
More revenue
Fewer good alternatives
More good alternatives
What was the amount of the luxury tax levied by Congress in 1991?
5%
10%
15%
20%
Consumer surplus occurs when the market price is ______ customers are willing and able to pay.
More than
Less than
Exactly what
An estimate of what
What happens as people consume additional units of a good?
They are willing to pay more for each additional unit.
They are less willing to pay for additional units.
They willingly pay the same price repeatedly until they have no funds left.
They become unpredictable, sometimes willing to pay more and sometimes less.
The existence of a consumer surplus on a product means ______.
Consumers believe they have received a good deal
Consumers have taken advantage of producers
Producers have taken advantage of consumers
Consumers have received a good deal
A decrease in price ______ consumer surplus.
Increases
Decreases
Eliminates
Freezes
Marginal cost is the cost of ______.
Producing one more unit of a good
Labor used to make a certain good
Producing one good instead of another
A consumer’s time spent shopping for a good
Producer surplus for a particular unit is the difference between the market price and the ______.
Seller’s tax expense on the unit
Seller’s cost of producing the unit
Consumer’s initial offer for the unit
Consumer’s highest offer for the unit.
A supply curve is smooth when there ______.
Are no producers
Is one producer
Are few producers
Are many producers
When an economy maximizes the sum of consumer and producer surplus, it has reached ______.
The equilibrium point
A deadweight loss
Market efficiency
Marginal cost
How does elasticity of a supply or demand curve affect deadweight loss?
A highly elastic curve has an unpredictable effect on deadweight loss.
A highly elastic curve signals the elimination of deadweight loss.
A more elastic curve decreases deadweight loss.
A more elastic curve increases deadweight loss.
A subsidy can be thought of as a ______ tax.
Negative
Positive
Neutral
Progressive
How does a subsidy affect production?
The market produces at peak efficiency.
The market overproduces relative to efficient output.
The market underproduces relative to efficient output.
The market abandons production of the subsidized good.
Clarence believes rent is too high in his city, and he would like to pay less rent. Which government action would Clarence most likely support?
Price increases
Price floors
Price ceilings
Price minimums
In the short term, the supply of rental units is ______.
Correlated with huge deadweight losses
Highly responsive to price controls
Inelastic
Flexible
The equilibrium price of soybeans is $4 per bushel, and the government believes farmers need the help of a price floor. Which price level is the government most likely to set for a bushel of soybeans?
$1
$2
$3
$5
Who receives most government agricultural subsidies?
New farmers
Poor farmers
Small family farms
Large commercial operations
How is a firm’s production influenced by a negative externality?
It will produce less than efficient output.
It will produce more than efficient output.
It will produce optimally efficient output.
It will fluctuate between low and high output.
Corrective ______ are used to internalize negative externalities.
Regulations
Spillovers
Subsidies
Taxes
An educated population is an example of a(n) ______.
Positive externality
Negative externality
Government subsidy
Adverse selection
Because of scarcity, clean air ______.
Is free
Has a cost
Does not exist
Is a private good
If firms had to pay for the externalities they cause, production costs would ______.
Become indeterminate
Remain unaffected
Increase
Decrease
It is probable that pollution regulation is subject to ______.
Increasing returns
Diminishing returns
Being a moral hazard
Being a club good
The idea that when the benefits are greater than the costs for some course of action, potential transactions can make some people better off without making anyone worse off is the ______.
Adverse selection
Free ride problem
Moral hazard
Coase theorem
Transaction costs exclude ______.
The cost of reaching a mutually acceptable price
The cost of the goods or services bought
Costs associated with negotiating
Costs of executing a transaction
Greater numbers of transactors make negotiations______.
Harder
More likely
Faster
Cheaper
A private good is ______.
Neither rival nor excludable
Rival, but not excludable
Rival and excludable
Not rival, but excludable
The use of public goods is ______.
Limited to one person at a time
Restricted to those who pay for them
Protected from free riders
Available to multiple people
Free riders are people who ______.
Take advantage of benefits without paying for them
Provide benefits to other people free-of-charge
Regulate industry by converting private resources to public use
Create technological advances that spill over to other industries
Asymmetric information is information that is ______.
So technically complicated most people are unable to interpret it
Available to one party in a transaction but not the other
Known by government officials but withheld from the public
Too late to be used by the participants in an exchange
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