Question 1

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the amount consumers pay producers?

Accepted Answer

To find the amount consumers pay producers, we need to find the equilibrium price where demand equals supply. First, we set Q_D equal to Q_S: 100 - P = -20 + P Solving for P: 2P = 120 P = 60 Therefore, the equilibrium price is $60. To find the amount consumers pay, we can simply plug this price back into the demand equation: Q = 100 - 60 = 40 Therefore, consumers pay producers: 40 * $60 = $2400 Thus, the correct choice is (B).

Question 2

Who benefit(s)from protectionism?

Accepted Answer

Domestic producers benefit from protectionism because it limits foreign competition and allows them to charge higher prices for their goods without fear of losing customers to cheaper foreign alternatives. Consumers, on the other hand, may end up paying higher prices for goods or may have limited access to certain goods due to trade barriers. Therefore, option D is incorrect as consumers do not benefit from protectionism. Option C is also incorrect as domestic producers do benefit, as stated above.

Question 3

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.Suppose that a nationwide quota (of 20)is enforced so that more can be used in a war effort.What is the price?

Accepted Answer

The answer of Suppose demand for a good is Q_D...

Question 4

Quotas that limit the quantity of imports of a foreign good provide an incentive for foreign suppliers to:
I.Provide higher quality goods.
II.Seek more open markets elsewhere.
III.Lower prices to be more competitive.
IV.Stop all trade with the country imposing the quotas.
Which of the above statements are true?

Accepted Answer

Quotas limit the quantity of imports, which can lead foreign suppliers to focus on providing higher quality goods to maximize their limited market access (I) and to seek other markets with fewer restrictions (II).

Question 5

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the consumer surplus?

Accepted Answer

The answer of Suppose demand for a good is Q_D...

Question 6

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the value consumers place on the amount of the good they consume?

Accepted Answer

The answer of Suppose demand for a good is Q_D...

Question 7

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the equilibrium quantity?

Accepted Answer

To find the equilibrium quantity, set Q_D equal to Q_S: 100 - P = -20 + P. Solving for P gives P = 60. Substitute P = 60 back into either the demand or supply equation to find the equilibrium quantity: Q = 100 - 60 = 40.

Question 8

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the equilibrium price?

Accepted Answer

To find the equilibrium price, we set the demand equal to the supply and solve for P: Q_D = Q_S 100 - P = -20 + P 2P = 120 P = 60 Therefore, the equilibrium price is $60.

Question 9

When a quota/trade barrier is instituted,the loss of domestic consumer surplus may be transferred to all of the following except

Accepted Answer

When a quota/trade barrier is instituted, the loss of domestic consumer surplus may be transferred to foreign consumers or domestic/foreign producers. However, it cannot be transferred to consumers of other domestic products, as they are not directly affected by the trade barrier.

Question 10

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.Suppose that a nationwide quota (of 20)is enforced so that more can be used in a war effort.What is the consumer surplus?

Accepted Answer

The equilibrium price without the quota is found by setting QD = QS, which gives P = 60. The equilibrium quantity is 40. With a quota of 20, the price is 80 (from QD = 100 - P). Consumer surplus is the area of the triangle with base 20 (from 100 to 80) and height 20 (from 100 to 80), which is (1/2) * 20 * 20 = 200.

Question 11

In the opening of free trade,if world prices of a good are less than domestic prices of that same good,

Accepted Answer

When world prices of a good are less than domestic prices of that same good, there will be an incentive for domestic consumers to purchase the good from foreign producers at a lower price. This will lead to a decrease in demand for domestically produced goods and cause domestic prices to drop to the world price level. This adjustment will ultimately benefit consumers as they will experience a gain in surplus, while domestic producers may experience a loss in surplus as they struggle to compete with foreign producers. Therefore, option B is the best choice.

Quiz 9: Perfect Competition in a Single Market

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the amount consumers pay producers?

Who benefit(s) from protectionism?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.Suppose that a nationwide quota (of 20) is enforced so that more can be used in a war effort.What is the price?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the consumer surplus?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the value consumers place on the amount of the good they consume?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the equilibrium quantity?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the equilibrium price?

When a quota/trade barrier is instituted,the loss of domestic consumer surplus may be transferred to all of the following except

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.Suppose that a nationwide quota (of 20) is enforced so that more can be used in a war effort.What is the consumer surplus?

In the opening of free trade,if world prices of a good are less than domestic prices of that same good,

Quiz 9: Perfect Competition in a Single Market

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the amount consumers pay producers?

Who benefit(s) from protectionism?

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.Suppose that a nationwide quota (of 20) is enforced so that more can be used in a war effort.What is the price?

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the consumer surplus?

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the value consumers place on the amount of the good they consume?

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the equilibrium quantity?

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.What is the equilibrium price?

When a quota/trade barrier is instituted,the loss of domestic consumer surplus may be transferred to all of the following except

Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P.Suppose that a nationwide quota (of 20) is enforced so that more can be used in a war effort.What is the consumer surplus?

In the opening of free trade,if world prices of a good are less than domestic prices of that same good,

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the amount consumers pay producers?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.Suppose that a nationwide quota (of 20) is enforced so that more can be used in a war effort.What is the price?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the consumer surplus?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the value consumers place on the amount of the good they consume?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the equilibrium quantity?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.What is the equilibrium price?

Suppose demand for a good is Q_D = 100 - P and supply is Q_S= -20 + P.Suppose that a nationwide quota (of 20) is enforced so that more can be used in a war effort.What is the consumer surplus?