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D) Tax revenues are lower than the total loss of consumers and producers

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E) Consumers and producers surpluses are not optimal

 

 

33.In which of the following cases a per-unit subsidy to producers is likely to generate maximum increase in the quantity supplied?

 

A) Supply is elastic and the good has no substitutes

B) Supply is inelastic and the good has many substitutes

C) Supply is elastic and the good has many substitutes

D) Supply is inelastic and the good has no substitutes

E) Supply and demand elasticities have no influence on the quantity supplied

 

 

34.Which of the following will shift the supply of food to the left

 

A) Implementation of the new technologies in agriculture

B) Government support to farmers

C) Reduction in the demand for bio-ethanol

D) Income growth of the population

E) Popularization of the healthy food

F) None of the above

 

 

35.Which of the following is likely to shift both the demand and the supply curves for meat in a country?

 

A) Discovery of a new cow disease which is dangerous for humans

B) Consumers’ tastes shift towards vegetarian-style food

C) Drought and the consequent increase in the price of feeding stuff

D) Government imposed a price ceiling on meat prices

E) Increase in the imports of cheap meat

 

 

36.Which of the following is likely to have the most elastic demand?

 

A) A good with a vertical demand curve

B) Cocaine

C) All types of soft drinks

D) Caffeine free Pepsi-Cola

E) Life-sustaining pills

 

37.At the same time there is a drought reducing the supply of pineapples and a discovery that they help prevent cancer. How will this combination of events affect the equilibrium price and quantity of pineapples?

 

A) Price increases, quantity decreases

B) Price increases, quantity may rise or fall

C) Price may rise or fall, quantity increases

D) Price decreases, quantity may rise or fall

E) Price increases, quantity increases

F) Both price and quantity may increase or decrease

G) None of the above

 

38.Suppose that the demand and supply curves for solar panels have usual slopes. In 2005, 50 panels were sold for $1000 each, while in 2006, 50 panels were sold for $900 each. Which of the following shifts most likely occurred?

 

A) Demand curve shifts to the right, supply curve shifts to the left.

B) Demand curve shifts to the left, supply curve shifts to the right.

C) Both curve shift to the right.

D) Both curves shifts to the left.

E) Demand curve shifts to the left, supply curve does not shift.

F) Demand curve shifts to the right, supply curve does not shift.

G) Supply curve shifts to the left, demand curve does not shift.

H) None of the above.

 

39.Which of the following statements about a price ceiling is accurate?

 

A) An effective (binding) price ceiling must be at a price below the equilibrium price

B) A price ceiling will have no impact on the demand curve.

C) An effective price ceiling will shift the supply curve to the left.

D) An effective (binding) price ceiling will have no effect on the quantity of the good supplied.

E) More than one statement is accurate.

F) None of the above.

 

 

40. If an increase in income of 10 % would cause Ivan’s consumption of vitamins to rise by

15 %, which of the following statements is the most likely to be correct?

 


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