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Producer surplus is the
Correct answer(s):
- area above the supply curve but below the market price of the good.
If an excise tax is imposed on a good, then the supply curve
Correct answer(s):
- shifts up by the amount of the tax.
The supply function
Correct answer(s):
- recognizes that the quantity of a good produced depends on its price and supply shifters.
If firms expect prices to be higher in the future and the product is not perishable, then
Correct answer(s):
- he current supply curve shifts to the left.
An ad valorem tax shifts the supply curve
Correct answer(s):
- by rotating it counter-clockwise.
An excise tax shifts the supply curve
Correct answer(s):
- up by the amount of the tax.
As additional firms enter an industry, the market supply curve
Correct answer(s):
- shifts to the right.
If the price of an input rises, producers are willing to produce
Correct answer(s):
- less output at each given price.
Which of the following is not a supply shifter?
Correct answer(s):
- Average income level.
The market supply curve indicates the total quantity all producers in a competitive market would produce at each price,
Correct answer(s):
- holding all supply shifters fixed.
If the price of good X becomes lower, then the level of consumer surplus becomes
Correct answer(s):
- higher
Consumer surplus is
Correct answer(s):
- the value consumers get from a good but do not pay for.
The demand function
Correct answer(s):
- recognizes that the quantity of a good consumed depends on its price and demand shifters.
If consumers expect future prices to be higher
Correct answer(s):
- stockpiling will happen when products are durable in nature.
Which of the following statements is incorrect?
Correct answer(s):
- none of the statements associated with this question are incorrect.
Advertising can influence demand by altering tastes of consumers. This type of advertising is known as
Correct answer(s):
- persuasive advertising.
Advertising provides consumers with information about the underlying existence or quality of a product. These types of advertising messages are called
Correct answer(s):
- informative advertising.
Firms advertise in order to cause the demand for their products to
Correct answer(s):
- shift to the right.
Which of the following are least likely to be complements?
Correct answer(s):
- Cars and trucks.
Good Y is a complement to good X if an increase in the price of good Y leads to
Correct answer(s):
- a decrease in the demand for good X.