1. What is the intended effect of a country imposing an import tariff on a good?

A.Decreasing domestic production

B.Increasing foreign trade

C.Increasing domestic production

D.Improving the quality of foreign trade

E.Decreasing prices for transport

2.What is the price elasticity of supply for a good that sees a 1% increase in quantity supplied for a 5% increase in price?

A.0.2

B.1

C.4

D.5

E.6

3.A production possibility curve would ________ if the availability of an input decreased and would ________ if a lack of technology decreased production efficiency.

A.shift outward; shift inward

B.not move; shift outward

C.not move; not move

D.shift outward; shift outward

E.shift inward; shift inward

4.Own price elasticity of demand measures the

A.change in quantity demanded over change in price

B.change in demand over time

C.percentage change in quantity demanded of the good over percentage change in price of the same good

D.average change in quantity demanded over time

E.average percentage change in price over average percentage change in quantity demanded

5.In the short run, a price-taking firm decides to produce zero units of output. Which of the following must have been the case?

A.The market price was less than the firm's average variable cost.

B.The firm was earning normal profits in the short run but projected economic losses in the long run.

C.The firm's average total cost was higher than its average revenue.

D.The market price was between the firm's average variable cost and average total cost.

E.The market price was equal to the firm's average total cost.

6.Which of the following is a basic question that must be answered in resource allocation?

A.How much education should workers have?

B.What goods and services should be produced?

C.What is a fair price for a particular good or service?

D.How much should a good or service cost the consumer?

E.What sort of technology should be used to produce goods?

7.If the supply for a good is very elastic and the demand is very inelastic, who would pay more for an excise tax?

A.Consumers

B.Producers

C.Consumers and producers share the burden equally

D.The government

E.Indeterminate

8.A monopolist engages in perfect price discrimination. What will happen to the consumer surplus?

A.It significantly increases as it absorbs the producer surplus.

B.It disappears and becomes deadweight loss.

C.It decreases based on the elasticity of demand.

D.It is unchanged.

E.It is entirely converted to producer surplus.

9.What is the most likely goal of a government that enacts a per-unit subsidy?

A.To increase market competition

B.To correct for a positive externality

C.To correct for a negative externality

D.To encourage production of private goods

E.To increase profit and encourage production

10.What would be the effect on the market supply curve from the government imposing a per unit tax on the production of the good?

A.No change

B.A shift to the left

C.A shift to the right

D.An increase in price

E.An increase in the quantity supplied