Meat at the supermarket has contributed to increase in food prices in 2010, and high feed and fuel prices mean that steak will likely cost a lot more this fall. The price of feed has increased 50 percent and hay has doubled from two years ago.
Based on this information, which of the following is TRUE in the market for beef? A) Consumer surplus will decrease.
B) Producer surplus will increase.
C) Equilibrium price will decrease.
D) Equilibrium quantity will increase.
Ques. 2More than 80 percent of the home heating oil used in the United States goes to the Northeast. In Vermont, the vast majority of people there use oil to stay warm when it's cold outside.
Richard Izor heats his home with oil and inquires, I'd like to see them come in and put a ceiling on the oil price now before it gets any higher. Why they haven't done this is more than I can understand. Which of the following is NOT likely to occur if such a price ceiling was imposed? A) There would be a surplus of heating oil.
B) A heating oil shortage may occur.
C) A black market for heating oil may be created.
D) There would be an increase in inefficiency in the heating oil market.
Ques. 3Which of the following business practices, if proven to exist, is always illegal under U.S. antitrust law?
A) tying arrangements
B) price fixing among competitors
C) exclusive dealing
D) all of the above
Ques. 4Specialty chocolate bars with a high cocoa content have been drawing a lot of attention in gourmet circles in 2008 but the price of cocoa beans has increased more than 44 percent in this time period.
In response to the increase in the price of cocoa beans, Rogue Chocolatier has increased the price of their gourmet chocolate bars by 20 percent. Rogue observes the quantity of their bars sold decreased by 15 percent. Based on this news clip, what does the price elasticity of demand for gourmet chocolate bars equal? A) 0.75
B) 1.25
C) 1
D) 0.66
Ques. 5The table above describes the market for paper. The production of paper produces pollution. There are no external benefits. What is the quantity produced if the market for paper is unregulated?
A) 10 tons per week
B) 60 tons per week
C) 40 tons per week
D) 30 tons per week
Ques. 6It is impossible to represent a three variable relationship in a two-dimensional graph. Is this statement true or false? Explain your answer.
What will be an ideal response?
Ques. 7An industry with a high concentration ratio might still be competitive if
A) there are no close substitutes for its product.
B) its barriers to entry are low.
C) its production is geographically concentrated.
D) it has a high ratio of value added to sales.
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