Microeconomics Full-Length Practice Test 2Microeconomics Full-Length
Practice Test 2
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- Question 50 refers to the following graph.
The figure above shows the cost curves of a grape producer, Farmer Jill. Farmer Jill invents a new tool which will
allow her to produce more grapes and hire less labor. What will the invention of the new tool mean for Farmer Jill?
A. Farmer Jill will produce Q^2 quantity of grapes.
B. Farmer Jill will not be able to fully capture the benefits of the invention.
C. Farmer Jill will be able to charge P^2 price for her grapes.
D. Farmer Jill’s cost curves will shift upward.
E. Farmer Jill will be able to sell as many grapes as she wants to at market price.Q^2 Q^1 QuantityATCAVCMCP^1P^2Price- Which of the following statements is true if a
rebate is given to the consumers of domestic
automobiles?
A. Domestic automobiles are not of very good
quality and need a discount in order to be sold.
B. There will be a decrease in the quantity of
foreign automobiles sold.
C. The demand for domestic automobiles must
be elastic.
D. The price of domestic automobiles is too high.
E. Domestic automakers will not benefit from
the rebate given on the automobiles they
produce. - Price floors are established in order to:
A. Benefit customers
B. Restrict entry into the market
C. Restrict imports
D. Ration scarce goods to the public
E. Benefit producers - In general, price ceilings work to:
A. Benefit producers
B. Increase prices in the marketplace
C. Cause shortages
D. Increase production
E. Establish a limit on production