26. Price controls: (Points: 3)
always increase economic efficiency.
always lead to more equitable results.
can result in inequitable outcomes.
are all of the above.


27. State governments place excise taxes on alcohol because: (Points: 3)
they want to subsidize alcohol production.
they want to encourage individuals to produce their own alcohol.
it discourages drinking alcohol while raising revenue for the government.
of all of the above.


28. Tax incidence refers to: (Points: 3)
who writes the check to the government.
who really pays the tax to the government.
the deadweight loss from the tax
the total revenue that the government collects from the tax.


29. Price elasticity of demand measures the responsiveness of the change in ______. (Points: 3)
quantity demanded to a change in price
price to a change in quantity demanded
slope of the demand curve to a change in price
slope of the demand curve to a change in quantity demanded


30. Using the midpoint method of elasticity to calculate price elasticity of demand eliminates the problem of ______. (Points: 3)
different elasticities, depending on whether price decreases or increases
different elasticities because price and quantity are inversely related on the demand curve
total revenue falling when price falls and demand is inelastic
total revenue increasing when price falls and demand is elastic


31. The demand for agricultural output is price inelastic. This means that if farmers, taken collectively, have a bumper crop, they will experience ______. (Points: 3)
lower prices, greater quantities sold, and lower incomes
higher prices, greater quantities sold, and higher incomes
lower prices, lower quantities sold, and lower incomes
higher prices, higher quantities sold, and higher incomes


32. Along the upper end of a linear demand curve, the price elasticity of demand will be _____. (Points: 3)
price inelastic
price elastic
unit-price elastic
positive


33. If a good is a necessity with few substitutes, then the price elasticity of demand will tend to be ______. (Points: 3)
more price elastic
less price elastic
equal to 1
the same as that of a luxury good


34. To say that two goods are substitutes, their cross-price elasticities of demand should be _____. (Points: 3)
less than zero
negative, yet almost equal to zero
equal to zero
greater than zero


35. To say that two goods are complements, their cross-price elasticities of demand should be _____. (Points: 3)
less than zero
equal to zero
positive, yet almost equal to zero
greater than zero


36. The percent change in quantity demanded divided by the percent change in income, all other things unchanged, is ______. (Points: 3)
price elasticity of demand
quantity elasticity of demand
income elasticity of demand
cross-price elasticity of demand


37. We can measure total consumer surplus for good X as ______. (Points: 3)
the sum of the individual consumer surpluses for all buyers of X
the area above the demand curve for X and below the price of X
the area bounded by the demand curve for X and the two axes
all of the above


38. Which of the following is true if there is a decrease in the demand of ice cream? (Points: 3)
There is an increase in producer surplus.
There is a decrease in producer surplus.
There is no change to producer surplus.
It's impossible to tell what will happen to producer surplus.


39. If the price of a good rises, then producer surplus ______. (Points: 3)
will increase
will decrease
will remain the same
may change but we can't tell how


40. We can measure total producer surplus for good X as ______. (Points: 3)
the sum of the individual producer surpluses for all buyers of X
the area below the supply curve for X and above the price of X
the area bounded by the supply curve for X and the two axes
all of the above


41. If there is a decrease in supply, total surplus ______. (Points: 3)
will increase
will decrease
will remain the same
may change but we can't tell how


42. If total surplus rises, which of the following must have occurred? (Points: 3)
There was an increase in demand and a decrease in supply.
There was an increase in demand and an increase in supply.
There was a decrease in demand and a decrease in supply.
There was a decrease in demand and an increase in supply.


43. The short run is defined as a ______. (Points: 3)
period of time less than 1 year
period of time less than 6 months
planning period in which some inputs are considered to be fixed in quantity
time period in which some inputs are fixed, but it cannot exceed 1 year


44. The long run is a planning period ______. (Points: 3)
over which a firm can consider all inputs as variable
that is at least 5 years in length
that must be over 6 months in length
that must be between 6 months and 5 years


45. In the long run _____. (Points: 3)
all inputs are fixed
inputs are neither variable nor fixed
at least one input is variable and one input is fixed
all inputs are variable


46. When an additional unit of a variable input adds less to total product than the previous unit, the firm must be experiencing ______. (Points: 3)
increasing returns
diminishing marginal returns
diminishing average returns
both B and C


47. Average variable cost is ______. (Points: 3)
the firm's variable cost per unit multiplied by the output
total variable cost divided by output
the difference between average total cost and total variable cost
the difference between total cost and total variable cost


48. When marginal cost is below average variable cost, average variable cost must be ______. (Points: 3)
at its minimum
at its maximum
falling
rising


49. The long-run average cost curve is tangent to an infinite number of ______. (Points: 3)
total cost curves
marginal cost curves
average variable cost curves
average total cost curves


50. When an increase in the firm's output reduces its long-run average cost, it experiences _____. (Points: 3)
economies of scale
diseconomies of scale
constant returns to scale
variable returns to scale


51. The assumptions of perfect competition imply that ______. (Points: 3)
individuals in the market accept the market price as given
individuals can influence the market price
the price will be a fair price
the price will be low


52. Marginal revenue ______. (Points: 3)
is the slope of the average revenue curve
equals the market price in perfect competition
is the change in quantity divided by the change in total revenue
is the price divided by the changes in quantity


53. For a firm producing at any level of output less than the most profitable one, an increase in output adds ______. (Points: 3)
more to total cost than to total revenue
more to total revenue than to total cost
the same amount to total revenue as to total cost
to total revenue but not to total cost