Richards

Econ112: Principles of Microeconomics

Exam II Study Questions

1. If S and D are the initial supply and demand curves, after the tax represented by S', is
imposed, the equilibrium price is the distance
A) 0M.
B) 0E.
C) 0A.
D) 0G.
E) GE.
2. If S and D are the initial supply and demand curves, after the tax represented by S', is
imposed, the equilibrium quantity is the distance
A) FB.
B) 0B.
C) 0F.
D) 0F + 0B.
E) 0F - FB.

Page 1

3.
A)
B)
C)
D)
E)

Normal profits occur when

accounting profits are positive.
economic profits are positive.
accounting profits are positive and economic profits are negative.
economic profits are zero.
total revenues are greater than explicit and implicit costs.

P r ic e
( $ /lb )
16
14

12
10
8
6
4
2

D
0

10

15

20

25

30

35

40

45

Q
( lb s /d a y )

Supply and Demand Curve

Shrimp in Hicksville
4.
A)
B)
C)
D)
E)

At the price of $4 per lb., sellers offer _____ lbs of shrimp a day.
0
10
20
30
40

5.
A)
B)
C)
D)
E)

The price of $4 per lb. will lead to a _____ of _____ lbs of shrimp per day.
excess supply, 20
excess supply, 30
equilibrium quantity, 20
excess demand, 20
excess demand, 30

Page 2

P
$14
12
S

10
8
6
4
2

D
4

12

16

20

24

6.
A)
B)
C)
D)
E)

Suppose a price ceiling is imposed at $4. The value of the producers surplus is
$24.
$16.
$8.
$4.
$2.

7.
A)
B)
C)
D)
E)

The total economic surplus after the $4 price ceiling is imposed is

$18.
$20.
$24.
$32.
$48.

8.
A)
B)
C)
D)
E)

The deadweight loss due to the $4 price ceiling is

$4.
$8.
$12.
$16.
$20.

Page 3

Answer Key

1.
2.
3.
4.
5.
6.
7.
8.

B
C
D
B
D
D
C
B

Page 4