1. (T/F) The trade tariffs imposed on Chinese product unambiguously increased U.S.

producer surplus and consumer surplus, while total U.S. welfare decreased.

2. (T/F) Over the past two years, the prices of new cars and used cars showed significant

growth. The price increases in new and used cars were both caused by the decrease in

supply due to the semiconductor shortage.

3. (T/F) Charles dislikes Red Vines Licorice. His indifference curves are positively-sloped

lines or curves with positive vertical intercepts with Red Vines Licorice on the horizontal

axis and other snacks on the vertical axis.

4. (T/F) CPI (Consumer Price Index) measures the cost for a fixed amount of products in

the same basket. One criticism is that it ignores the substitution effect and could

overestimate the actual price increase.

5. (T/F) The demand function for apple juice in Davis is P=200-0.5QD where P is in $ per

1,000 gallons and Q is in thousands of gallons per month. Currently consumers in Davis

drink 20,000 gallons of apple juice each month. Total revenue from apple juice sale will

increase when the price goes up slightly.

True or False