Download AP MICRO Week 3 Practice Quiz: G – J, 9 – 17

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AP MICRO Week 3 Practice Quiz: G – J, 9 – 17
1. If the cost of producing automobiles increases, the
price, equilibrium quantity and consumer surplus
will most likely change in which of the following
ways?
Price
Quantity
(A) Increase
(B) Increase
(C) Increase
(D) Decrease
(E) Decrease
Consumer Surplus
Increase
Increase
Decrease
Increase
Decrease
Increase
Decrease
Decrease
Decrease
Decrease
2. Producer surplus is the
(A) area under the supply curve to the left of the
amount sold.
(B) area under the supply curve to the right of the
amount sold.
(C) amount the is seller paid plus the cost of
production.
(D) amount the is seller paid less the cost of
production.
(E) cost to sellers of participating in a market.
3. Which of the following will occur if a legal price
floor is placed on a good below its free-market
equilibrium?
(A) Surpluses will develop.
(B) Shortages will develop.
(C) Underground markets will develop.
(D) The equilibrium price will ration the good.
(E) The quantity sold will increase.
4. According to the graph above, which of the
following will occur if a legal price ceiling is
imposed at price X?
(A) Shortages will occur.
(B) Surpluses will occur.
(C) Demand will increase.
(D) Q1 will be purchased.
(E) Supply will decrease.
5. Which of the following statements about price
controls is true?
(A) A price ceiling causes a shortage if the ceiling
price is above the equilibrium price.
(B) A price floor causes a surplus if the price floor
is below the equilibrium price.
(C) A price ceiling causes an increase in demand if
the ceiling price is set below the equilibrium
price.
(D) A price ceiling causes a decrease in demand if
the price floor is set above the equilibrium
price.
(E) Price ceilings and price floors result in a
misallocation of resources.
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AP MICRO Week 3 Practice Quiz: G – J, 9 – 17
Questions 10 and 11 refer to the graph below. The
market is currently in equilibrium.
6. If both supply and demand for a good increase,
which of the following is true?
(A) Price will increase
(B) Price will decrease
(C) Quantity will increase
(D) Quantity will decrease
(E) Quantity may increase, decrease, or remain the
same
7. Which of the following is true of an effective price
ceiling?
(A) It is put in place to help producers
(B) It must be set below equilibrium
(C) It will increase the quantity of the good sold in
the market
(D) It will create a surplus in the market
(E) It will not change the quantity of the good
demanded or supplied
8. A decrease in the supply of a good will have what
effect on consumer surplus, producer surplus, and
total surplus in the market?
Consumer
Producer
Surplus Surplus Surplus
(A) Increase
(B) Increase
(C) Decrease
(D) Decrease
(E) Decrease
Total
Increase
Decrease
Decrease
Decrease
Increase
Increase
Decrease
Decrease
Increase
Decrease
9. Producer surplus will increase as a result of which
of the following?
(A) a decrease in price
(B) an increase in demand
(C) a decrease in demand
(D) a movement toward competition in the market
(E) an increase in input costs
10. In a competitive equilibrium, what is the value of
consumer surplus?
(A) $200
(B) $180
(C) $160
(D) $80
(E) $20
11. If a price floor is set at $6, price and quantity
demanded will equal which of the following?
(A) $6, 30
(B) $10, 30
(C) $10, 20
(D) $6, 10
(E) $6, 20
12. If the government sets a price ceiling below
equilibrium price in a market, which of the
following would occur?
(A) A shortage would occur
(B) A surplus would occur
(C) The market would not be affected
(D) Prices would rise
(E) The quantity sold would increase
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AP MICRO Week 3 Practice Quiz: G – J, 9 – 17
13. Which of the following is true of a price floor?
(A) The intention of the government in creating the
price floor is to assist the producers of the good.
Questions 3-4 refer to the graph below. The market
is currently in equilibrium.
(B) To have an impact in the market for the good,
the price floor should be set below the existing
market price of the good.
(C) An effective price floor will increase the
quantity demanded of the good.
(D) The price floor would tend to create a shortage
of the good in the market.
(E) The creation of the price floor would not change
the quantity supplied of the good if the supply
curve were upward-sloping to the right.
14. Which of the following best illustrates the concept
of consumer surplus?
(A) A thirsty athlete pays $0.85 for a cold drink
when she would have gladly paid $1.50 for the
drink.
(B) An individual who is willing to accept a job at
$7.50 per hour is offered $7.00 per hour.
(C) An individual pays the sale price of $15.00 for
the same shirt that the individual refused to
purchase earlier at $18.00.
(D) An individual finds that the price of artichokes,
a food she dislikes, has been reduced by 50
percent.
(E) A wood-carver has a marginal cost of $5.00 for
a unit of output, but sells that unit at $6.00.
15. In a competitive equilibrium, consumer surplus is
the area of
(A) UVZ
(B) WYZ
(C) RVUT
(D) XVZY
(E) 0YZS
16. If a price floor is set at X, the quantity demanded
will
(A) increase from 0R to 0S
(B) increase from 0R to 0T
(C) decrease from 0S to 0R
(D) decrease from 0T to 0R
(E) not change
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AP MICRO Week 3 Practice Quiz: G – J, 9 – 17
20. Consumer surplus is defined as
(A) opportunity cost minus total revenue
(B) total revenue minus opportunity cost
(C) the difference between the resource costs and
the price that consumers pay
(D) the difference between the value that consumers
place on a good and the price they pay
(E) the sum of the external costs and benefits
17. The graph above shows the supply and demand
curves for gasoline. Which of the following will
occur if the government establishes a price ceiling
of $1.20 per gallon.
(A) A shortage of 900 million gallons
(B) A shortage of 200 million gallons
(C) A shortage of 100 million gallons
(D) A surplus of 100 million gallons
(E) Neither a surplus nor a shortage
18. An increase in which of the following will most
likely result in a long-run surplus of a product?
(A) The number of suppliers of the product
(B) A price that is set by law above the equilibrium
price
(C) The demand for the product
(D) The costs of resources used to produce the
product
(E) The future expected price of the product
19. Which of the following will occur if the
government imposes a price ceiling below the
equilibrium price of a good?
(A) The quantity sold will exceed the equilibrium
quantity.
(B) Firms’ total revenues will increase if demand is
price elastic.
(C) There will be a shortage in the market.
(D) All firms will shut down, since price is below
the equilibrium prices.
(E) Price will exceed the marginal cost of producing
the last unit sold.
21. In the market shown in the graph above, at a price
of $5, there will be
(A) a surplus and the price will eventually fall
(B) a surplus generating a decrease in demand
(C) a shortage and the price will eventually rise
(D) a shortage generating an increase in supply
(E) an increase in supply and a decrease in demand
22. The difference between the price a consumer
would be willing to pay for a cone of ice cream
and the actual market price that she pays gives a
measure of her
(A) consumer surplus
(B) producer surplus
(C) marginal utility
(D) marginal cost
(E) ability to pay
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AP MICRO Week 3 Practice Quiz: G – J, 9 – 17
23. The circular flow of economic activity between
consumers and producers includes which of the
following?
I. Households buy factor services from firms.
II. Households sell factor services to firms.
III. Households buy outputs from firms.
IV. Households sell outputs to firms.
(A) III only
(B) IV only
(C) I and II only
(D) II and III only
(E) III and IV only
24. Which of the following is true according to the
circular flow model?
(A) Firms are suppliers in both the product and
factor markets.
(B) Firms are demanders in the product markets
and suppliers in the factor markets.
(C) Households are demanders in both the product
and factor markets.
(D) Households are demanders in the product
markets and suppliers in the factor markets.
(E) The government is a demander in the product
market only.
25. Which of the following can be considered a
leakage (money leaves the country) from the circular
flow of economic activity?
(A) Investment
(B) Government expenditures
(C) Consumption
(D) Exports
(E) Saving
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AP MICRO Week 3 Practice Quiz: G – J, 9 – 17
2006 AP® MICROECONOMICS FREE-RESPONSE QUESTION #3 (FORM B)
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