Unit 2: Supply & Demand
Micro · Unit 2 · Paper 3

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 3” 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 32 min 29 points0/17 attempted
1

Double shift

2

Income elasticity of demand

3

Cross-price elasticity of demand

4

Elasticity varies along a straight line

5

Substitutes

6

Who bears a tax

7

Elasticity along a linear demand curve

8

Price ceiling

9

The five demand shifters

10

Total surplus

11

Total revenue test

12

Determinants of PED

Short answer 1. Define or explain: The two tariff deadweight triangles

3 pts

Short answer 2. Define or explain: Law of demand

3 pts

Short answer 3. Define or explain: The midpoint method

3 pts

Short answer 4. Define or explain: Subsidy

3 pts

Free response

5 pts

SHORT QUESTION. In Gurkeland, the domestic market for cucumbers has a downward-sloping demand curve and an upward-sloping supply curve, currently in equilibrium at a price of $20 per bushel.

A. Draw (describe) a correctly labeled graph of the market for cucumbers showing the equilibrium price, labeled $20, and the equilibrium quantity, labeled Q1.

B. Suppose Gurkeland engages in free trade and the world price of cucumbers is $10 per bushel. (i) State where on the graph the world price line $10 and the quantity sold by domestic producers, Q2, are shown. (ii) Will total economic surplus in Gurkeland increase, decrease, or remain the same after engaging in free trade?

C. Now the government imposes a $5 tariff per bushel on imported cucumbers. (i) State where the new domestic-producer quantity Q3 is shown. (ii) Compared with free trade, will domestic producer surplus increase, decrease, or remain the same as a result of the tariff? Explain.