Unit 2: Supply & Demand
Micro · Unit 2 · Paper 2

Supply & Demand unit test

A test on this unit alone, marked as a percentage and a letter grade — for the test your class is actually sitting, rather than for May. Answer everything, then submit once: seeing the answer to question 3 before attempting question 4 makes the final percentage meaningless.

Paper 1Paper 2Paper 3
Each paper is built from this unit’s 57 terms and is the same for everyone, so a teacher can assign “Unit 2, Paper 2” and every student sits the identical test. Multiple choice is marked objectively; the written sections you mark yourself against the model answer and rubric.
Suggested time 34 min 31 points0/17 attempted
1

Double shift

2

Total surplus

3

The midpoint method

4

Demand shifters

5

Supply shifters

6

Double shift: same direction

7

Perfectly inelastic demand

8

Who bears a tax

9

Producer surplus

10

When indeterminate becomes determinate

11

Gains from opening to trade

12

Surplus

Short answer 1. Define or explain: Quota versus tariff

3 pts

Short answer 2. Define or explain: Elasticity varies along a straight line

3 pts

Short answer 3. Define or explain: Why supply is more elastic in the long run

3 pts

Short answer 4. Define or explain: Price ceiling

3 pts

Free response

7 pts

A city imposes a rent ceiling of $900 per month on apartments. The unregulated equilibrium rent was $1,300, with 50,000 apartments rented. At $900, landlords are willing to supply 38,000 apartments and tenants wish to rent 62,000. (a) Identify whether this is a binding price ceiling and calculate the resulting shortage. (b) Draw a correctly labeled graph of the apartment market showing the ceiling, and shade the deadweight loss. (c) Explain two consequences of the ceiling besides the shortage, and identify who gains and who loses relative to the unregulated market. (d) Explain how the size of the shortage would differ in the long run compared with the short run, and identify the elasticity concept your answer relies on.

Identify whether the ceiling binds and calculate the shortage.

Draw a labeled graph showing the ceiling and shade the deadweight loss.

Explain two consequences besides the shortage and identify winners and losers.

Explain how the shortage differs in the long run and name the elasticity concept involved.