W The suppliers of Automobile A are struggling to increase production in response to price increases at the same rate as the suppliers of Automobile B. What can be determined about the suppliers of Automobile B? (2 points) 0 They sell superior products. 0 They have a greater price elasticity of supply. 0 They are currently experiencing unit elasticity. 0 They have acquired a trade deal to boost production. 0 They have acquired an increase in technology or labor. 11, (02.05 MC) If the income elasticity of demand for a good is 2, then (2 points) 0 quantity demanded and income decrease by 2 percent 0 quantity demanded increases by 2 percent while income increases by 1 percent 0 quantity demanded decreases by 2 percent while income increases by 2 percent 0 quantity demanded increases by 1 percent while income decreases by 2 percent 0 quantity demanded decreases by 2 percent while income increases by 1 percent 12. (02.05 HC) Given that the cross-price elasticity of goods Bee and Zee is 20 and the quantity of Bee decreases by 40 percent, which of the following statements is correct? (2 points) 0 They are substitutes, and the price of Zee goes up by 2 percent. 0 They are substitutes, and the price of Zee goes down by 2 percent. 0 They are complements, and the price of Zee goes up by 2 percent. 0 They are complements, and the price of Zee goes down by 2 percent. 0 They are complements, and the price of Zee goes down by 8 percent. 13. (02.06 MC) If the demand for a product is so great that firms are unable to fulfill all of the orders, what might it conclude? (2 points) The product is an inferior good. O There is a shortage, and the price is below equilibrium. The product is experiencing diminishing marginal returns. At the current price, the supply is greater than the demand. Foreign governments recently placed a tariff on the product.14. (02.06 MC) (2 points) Price Supply A B P2 P3 D K Demand Q1 Q2 Q3 Quantity (units) What area represents the producer surplus at the competitive equilibrium in the graph shown above? OA+ B + E O C+ D + F O B + C + E +F A + B + C + D + E+F O C + D + F + G + H+J15. (02.07 MC) Which of the following accuietely describes the result if the price of a good or service is set below the equilibrium price? (2 points) 0 There will be a surplus of that good. 0 Some of the consumer surplus from equilibrium will be transferred to producers. O The producers will supply a lower quantity than consumers will demand. 0 The consumer surplus will decrease. O The price elasticity of demand will increase to reflect the lower quantity transacted. 15. (02.07 MC) Which of the following events would correctly describe the outcome in a competitive market? (2 points) 0 An increase in supply, ceteris paribus, causes an increase in equilibrium price and quantity. 0 An increase in demand, ceteris paribus, causes a decrease in equilibrium price and quantity. 0 An increase in demand, ceteris paribus, causes an increase in equilibrium price and quantity. 0 An increase in supply, ceteris paribus, causes an increase in equilibrium price and a decrease in equilibrium quantity. 0 A decrease in demand, ceteris paribus, causes an increase in equilibrium price but an indeterminate change in equilibrium quantity. 17. (02.00 HC) A government imposes a per-gallon tax on gasoline. The before-tax price of a gallon of gas is $3 per gallon. The afteretax price of a gallon of gas is $10. Demand for gasoline is unchanged after the tax. Which of the following is true? (2 points) 0 The amount of deadweight loss increases. 0 The demand for gasoline is perfectly inelastic. O Producers of gasoline lose revenue after the tax. 0 The supply of gasoline cannot meet the demand. 0 Consumers and producers bear the tax burden equally. 18. (02.08 MC) (2 points) Price Supply A B P C Demand D Quantity (units) The graph above illustrates a binding price floor. What represents the area of deadweight loss? O A O B + C O E OF OE+F19. (02.09 MC) An economy opens itself up to international trade. What would happen if the average global price for a good is lower than the domestic equilibrium price with no government interventions? (2 points) 0 Domestic supply would increase as well as domestic demand. 0 Domestic supply would decrease, and domestic demand would increase. 0 Domestic quantity supplied would decrease, and domestic demand would increase. 0 Domestic quantity supplied would decrease, and domestic consumption would increase. 0 The domestic market would not be affected. 20. (02.09 MC) (2 points) Ouaniity If an import tariff in the economy above is set such that the effective domestic price is A, what represents the additional producer surplus gained