CLEP Microeconomics chapter practice4 questions

33 Graph Mastery

These questions come directly from the chapter practice in the book. Choose the best answer, check your reasoning, and use the explanation to correct any gap.

Question 1

Question 1 of 4

The diagram shows demand shifting from D_1 to D_2 while supply remains unchanged. Which feature identifies the new equilibrium?

The demand shift creates a new intersection with the unchanged supply curve at both a higher price and higher quantity.
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C. The new intersection has a higher price and quantity.

The demand shift creates a new intersection with the unchanged supply curve at both a higher price and higher quantity.

Question 2

Question 2 of 4

The diagram shows a competitive firm facing a market price above average total cost at the relevant output. The profit-maximizing quantity is found where

A price-taking firm produces where P=MR=MC on the rising portion of MC. Price above ATC then indicates profit.
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A. price intersects rising marginal cost

A price-taking firm produces where P=MR=MC on the rising portion of MC. Price above ATC then indicates profit.

Question 3

Question 3 of 4

The diagram shows a negative production externality. Which relationship explains why the market quantity exceeds the efficient quantity?

External production damage makes social marginal cost exceed the private cost represented by ordinary supply.
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E. Marginal social cost lies above private marginal cost.

External production damage makes social marginal cost exceed the private cost represented by ordinary supply.

Question 4

Question 4 of 4

For a monopsonist, which graphical sequence is correct?

MRP and MRC determine employment. The labor-supply curve then shows the wage required for that employment level.
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D. Set MRP=MRC for employment; read wage from labor supply.

MRP and MRC determine employment. The labor-supply curve then shows the wage required for that employment level.

Quiz complete