1.Suppose, BC's current import of wine is 8000 litres. Government introduces a tariff of $5 per litre of wine, as a result, the volume of wine imports cuts down to half. What is the value of tariff revenue collected by the government?

Select one:

a. $2000

b. Cannot be determined

c. $40000

d. $20000

e. $1600

2.All of the following except one are necessary conditions in order for price discrimination to be practiced. Which is the exception?

Select one:

a. The different groups of buyers must have different elasticities of demand.

b. The seller must be able to separate members belonging to different buying groups.

c. The seller must be able to identify members belonging to different buying groups.

d. The seller's costs of production must be different in reference to each group of buyers.

e. The seller must be able to prevent the resale of the product.

3.Suppose that products A, B, C and D have price elasticity of demand coefficients of 0.67, 1.24, 2.01 and 0.2 respectively. A 10% rise in price would result in increased total revenue with which products?

Select one:

a. A and C.

b. B and C.

c. A and B.

d.A and D.

e. B and D.

4.Under what circumstances will there be no opportunity for mutually advantageous trade between two countries?

Select one:

a. When the terms of trade are the same.

b. When comparative costs are different.

c. When comparative costs are the same.

d. When tariffs exist.

5.If you are making a loss in the short-run you should stop production

Select one:

True

False

6.What is the correct interpretation of the perfectly competitive firm's supply curve?

Select one:

a.It is the same as the portion of its marginal cost curve that lies above the average variable cost curve.

b. It is the same as its average variable cost curve.

c. It is the same as the portion of its average variable cost curve that lies above the marginal cost curve.

d.It is the same as its total variable cost curve.

7.A profit maximizing perfectly competitive firm can earn only a zero profit in the long run

Select one:

True

False

8.What is true about the long-run equilibrium price of a monopolistically competitive firm?

Select one:

a. It will equal both average cost and marginal cost.

b.It will equal both marginal cost and marginal revenue.

c.It will equal average cost and exceed marginal cost.

d.It will exceed both average cost and marginal cost.

e. It will equal marginal cost and exceed average cost.

9.Suppose that, for a certain consumer, the marginal utility of product A is equal to 40 and its price is $42, while the marginal utility of product B is 30 and its price is $40. What conclusion can be inferred from this?

Select one:

a.This consumer should buy more of product B, because it is cheaper.

b. This consumer should buy more of product A and less of product B.

c. This consumer should buy neither product since the prices exceed the marginal utilities.

d. This consumer should buy more of product B because it gives greater value for money.

e. This consumer should buy more of product B and less of product A.

10.When a competitive market is in long-run equilibrium, the firms will be making economic profits but not normal profits.

Select one:

True

False