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Question $1$

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A good will have a more elastic demand,

Question $1$Select one:

a$.$

the greater the availability of close substitutes.

b$.$

the more narrow the definition of the market.

c$.$

the more it is regarded as a necessity.

d$.$

the shorter the period of time.

Question $2$

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A monopolist faces the following demand curve:

Price

Quantity

$$10$

$5$

$$9$

$10$

$$8$

$16$

$$7$

$23$

$$6$

$31$

$$5$

$45$

$$4$

$52$

$$3$

$60$

The monopolist has total fixed costs of $$40$ and a constant marginal cost of $$5.$ What is the profit$-$maximizing level of output?

Question $2$Select one:

a$.$

$31$ units

b$.$

$7$ units

c$.$

$16$ units

d$.$

$23$ units

Question $3$

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A profit$-$maximizing monopolist will produce the level of output at which

Question $3$Select one:

a$.$

average revenue is equal to average total cost.

b$.$

total revenue is equal to opportunity cost.

c$.$

average revenue is equal to marginal cost.

d$.$

marginal revenue is equal to marginal cost.

Question $4$

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A tax imposed on the sellers of a good will

Question $4$Select one:

a$.$

raise both the price buyers pay and the effective price sellers receive.

b$.$

raise the price buyers pay and lower the effective price sellers receive.

c$.$

lower both the price buyers pay and the effective price sellers receive.

d$.$

lower the price buyers pay and raise the effective price sellers receive.

Question $5$

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An early frost in the vineyards of Napa Valley harms existing crops of grapes and would cause

Question $5$Select one:

a$.$

a decrease in the supply of wine, increasing price.

b$.$

an increase in the supply of wine, decreasing price.

c$.$

a decrease in the demand for wine, decreasing price.

d$.$

an increase in the demand for wine, increasing price.

Question $6$

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Canada and the U$.$S$.$ both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if

Question $6$Select one:

a$.$

Canada requires fewer resources than the U$.$S$.$ to produce a bushel of wheat.

b$.$

the U$.$S$.$ has an absolute advantage over Canada in producing computer software.

c$.$

the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the U$.$S$.$

d$.$

the opportunity cost of producing a bushel of wheat is lower for the U$.$S$.$ than it is for Canada.

Question $7$

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Efficiency is attained when

Question $7$Select one:

a$.$

total surplus is maximized.

b$.$

consumer surplus is maximized and producer surplus is minimized.

c$.$

producer surplus is maximized.

d$.$

all resources are being used.

Question $8$

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Figure $1$

The vertical distance between points A and B represents a tax in the market.

nar$006-1.$jpg

Refer to Figure $1.$ The per$-$unit burden of the tax on sellers is

Question $8$Select one:

a$.$

$$2.$

b$.$

$$3.$

c$.$

$$5.$

d$.$

$$4.$

Question $9$

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Figure $2$

nar$004-1.$jpg

Refer to Figure $2.$ Which area represents the increase in consumer surplus when the price falls from P$1$ to P$2?$

Question $9$Select one:

a$.$

ACG

b$.$

BCGD

c$.$

DFG

d$.$

ABD

Question $10$

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Figure $3$

nar$008-1.$jpg

Refer to Figure $3.$ As a result of the tariff, there is a deadweight loss that amounts to

Question $10$Select one:

a$.$

B$.$

b$.$

B $+$ D $+$ E $+$ F$.$

c$.$

D $+$ F$.$

d$.$

E$.$

Question $11$

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Figure $4$

nar$005-1.$jpg

Refer to Figure $4.$ At the equilibrium price, producer surplus is

Question $11$Select one:

a$.$

$$200.$

b$.$

$$900.$

c$.$

$$450.$

d$.$

$$400.$

Question $12$

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Figure $5$

nar$007-1.$jpg

Refer to Figure $5.$ The increase in total surplus resulting from trade is

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