ECON 5050
• Question 1 1 out of 1 points Use the following demand and supply functions to answer the following question:
Demand: Qd = 50 - 4P
Supply Qs = 20 + 2P
Equilibrium price and quantity are
Answer
Selected Answer: d.
None of the above.
Correct Answer: d.
None of the above. • Question 2
0 out of 1 points Suppose a frost destroys much of the Florida orange corp. At the same time, suppose consumer tastes shift toward orange juice. What would we expect to happen to the equilibrium price and quantity in the market for orange juice?
Answer
Selected Answer: c.
Price will decrease, quantity is indeterminate.
Correct Answer: a.
Price will increase, quantity is indeterminate (may increase or decrease).
Response Feedback: Make sure you draw demand and supply curves and shift them based on information given. • Question 3
1 out of 1 points A Blue Ribbon Committee has decided that the amount of acid rain should be reduced and is trying to determine the optimal level of reduction. There are benefits from reducing acid rain (reduced loss of wildlife and forest, better health, etc.), but there are also costs. The committee estimates that the marginal benefit of each unit of reduction is $1,400 − 5R, where R is units of reduction, and the marginal cost is 2R. If the committee wants to maximize the net benefit from reducing acid rain, what is marginal cost at the optimal level of reduction?
Answer
Selected Answer: d.
$400
Correct Answer: d.
$400
• Question 4
1 out of 1 points Which of the following will cause an increase in consumer surplus?
Answer
Selected Answer: b. a technological improvement in the production of the good
Correct Answer: b. a technological improvement in the production of the good • Question 5
1 out of 1 points A demand curve is marked with two points. Point A corresponds to P = $7 and Q = 12, and Point B corresponds to P = $5 and Q =
Demand: Qd = 50 - 4P
Supply Qs = 20 + 2P
Equilibrium price and quantity are
Answer
Selected Answer: d.
None of the above.
Correct Answer: d.
None of the above. • Question 2
0 out of 1 points Suppose a frost destroys much of the Florida orange corp. At the same time, suppose consumer tastes shift toward orange juice. What would we expect to happen to the equilibrium price and quantity in the market for orange juice?
Answer
Selected Answer: c.
Price will decrease, quantity is indeterminate.
Correct Answer: a.
Price will increase, quantity is indeterminate (may increase or decrease).
Response Feedback: Make sure you draw demand and supply curves and shift them based on information given. • Question 3
1 out of 1 points A Blue Ribbon Committee has decided that the amount of acid rain should be reduced and is trying to determine the optimal level of reduction. There are benefits from reducing acid rain (reduced loss of wildlife and forest, better health, etc.), but there are also costs. The committee estimates that the marginal benefit of each unit of reduction is $1,400 − 5R, where R is units of reduction, and the marginal cost is 2R. If the committee wants to maximize the net benefit from reducing acid rain, what is marginal cost at the optimal level of reduction?
Answer
Selected Answer: d.
$400
Correct Answer: d.
$400
• Question 4
1 out of 1 points Which of the following will cause an increase in consumer surplus?
Answer
Selected Answer: b. a technological improvement in the production of the good
Correct Answer: b. a technological improvement in the production of the good • Question 5
1 out of 1 points A demand curve is marked with two points. Point A corresponds to P = $7 and Q = 12, and Point B corresponds to P = $5 and Q =