ARE 444-QUIZ #1 Please select the best answer for each of the following ten multiple choice questions (10 points for each question). The world's largest producer of oil is: China United States Russia Saudi Arabia 2. The theory of peak oil: a) Correctly predicted the peaking of world oil production in 2005 b) Was proposed by Hubbert in the 1950's c) Predicts that oil production peaks every 30 years d) None of the above 3. Which of the following resource use or activity results in the most carbon dioxide emissions from China? Coal Gas Dil Cement production 4. Consider the market for gasoline. Other things being the same, a rise in consumer incomes will typically cause: Both the supply curve and the demand curve for gasoline to shift to the right The supply curve for gasoline to shift to the left, thus creating a rise in the equilibrium price gage The demand curve for gasoline to shift to the left, thus creating a fall in the equilibrium price The demand curve for gasoline to shift to the right, thus creating a rise in the equilibrium price 5. Which of the following statements about perfect competition is false? Costs of production remain the same over time All firms in the industry produce a standardized product Market price equals a firm's marginal cost at equilibrium Individual firms have no control over market price 6. If a rightwards shift in the supply curve of a product results in a lower price, but causes no change in the quantity bought and sold, then: Price elasticity of supply is 0 Price elasticity of supply is less than 1 but greater than () Price elasticity of demand is zero Price elasticity of demand is greater than 1 (in absolute value)Mary charges $10 per pound for her handmade chocolate. The price elasticity of denan chocolate in her town is - 2.5. If Mary wants to increase her total revenue, what advice would you her? Lower the price of chocolate Reduce the quantity of chocolate produced Raise the price of chocolate dj Lower the costs of production by using cheaper inputs B. For a straight-line supply curve passing through the quantity-axis at a positive value, price elasticity of supply is: Greater than I everywhere Equal to 1 everywhere Less than I everywhere Greater, equal to, or less than 1, depending on values of price and quantity 9. Consider the case of a monopoly. You would expect this firm to produce where: a) Price equals marginal cost b) Absolute value of price elasticity of demand is less than one Social welfare is maximized None of the above 10. Use the diagram below to determine which of the following statements is true. Consumer surplus under monopoly is area BCE b) Producer surplus under monopoly is area HFMA Social welfare loss due to monopoly is area HFMJ Producer surplus under perfect competition is area OECL S/unit Marginal Cost Curve 3- Demand Curve Marginal Revenue Curve K L Frantiny