Microeconomics
Unit 2 Practice Sheet (Video Help)
Part 1 - Supply and Demand Practice- Use the
graph for ice cream to answer the questions below.
1. What is the equilibrium price and quantity?
P4 and Q3
2. Identify a price and quantity that could be the
result of an increase in the price of milk, a key
resource in the production of ice cream.
P5 and Q2 or P6 and Q1
3. Identify a price and quantity that could be the
result of a decrease in the price of popsicles, a
substitute to ice cream.
P3 and Q2 or P2 and Q1
4. Identify the area of consumer surplus at the
equilibrium price.
ZSQVXY
5. Identify the area of consumer surplus if the supply increased resulting in the equilibrium price of P3
and Q4.
ZSQVXYLMNRT
6. Assume instead that the demand decreased resulting in the equilibrium price of P3 and Q2. Identify
the area of producer surplus.
FKO
7. Identify the area of consumer surplus if a price ceiling is placed at P2.
ZSVLK
8. Identify the area of consumer surplus if a price ceiling is placed at P5.
ZSQVXY- This is a trick question. A price ceiling above equilibrium is not binding. It has no effect.
9. Identify the area of deadweight loss if a price floor is placed at P6.
QXMOYN
10. Assume that a per-unit tax was placed on ice cream resulting in an equilibrium price of P6 and Q1.
Identify the area of consumer surplus.
Z
11. Assume that a per-unit tax was placed on ice cream resulting in an equilibrium price of P6 and Q1.
Identify the area of deadweight loss.
QXMOYN
12. Assume that a per-unit tax was placed on ice cream resulting in an equilibrium price of P6 and Q1.
Identify the area of tax revenue.
SVLK
13. Assume instead that consumers can get ice cream at the world price of P2. Identify the area of
consumer surplus after international trade.
ZSQVXYLMNRTKOGHIJ
14. Identify the quantity that will be imported if the world price is P2. Q5 - Q1
© Copyright Jacob Clifford 2020. Ultimate Review Packet
Teachers- Do NOT use this in your classroom. Contact me if you want to use this resource with your students
Microeconomics
Unit 2 Practice Sheet (Video Help)
Part 2 - Calculation Practice- Use the graph for a
competitive market to answer the questions below.
Show your work.
15. What is the quantity demanded and quantity
supplied at the price of $13?
QD = 20 units , QS = 80 units
16. Could an increase in supply result in an
equilibrium price and quantity of $12 and 30 units?
Explain.
No. An increase in supply would cause the price
to decrease and the quantity to increase
17. Calculate the consumer surplus at the equilibrium
price. CS = $125 = ($15 - $10) x 50/2
18. Calculate the consumer surplus if a decrease in
supply results in an equilibrium price of $12. CS = $45 = ($15 - $12) x 30/2
19. Calculate the producer surplus if an increase in demand results in an equilibrium price of $12.
PS = $245 = ($12 - $5) x CS = $45 = ($15 - $12) x 30/2
20. Calculate the deadweight loss if a decrease in demand results in an equilibrium price of $8.
$0. This is a trick question. There is no deadweight loss when a market is at equilibrium
21. Calculate the consumer surplus if a price ceiling is placed at $8.
CS = $165 = [($15 - $12) x 30/2] + [($12 - $8) x 30]
22. What would be the equilibrium price and quantity if a $2 per-unit tax is placed on the good?
P = $11, Q = 40
23. How much tax revenue would be generated if a $2 per-unit tax is placed on the good?
$80 = $2 tax + 40 units
24. Would the incidence of tax from a $2 tax mostly fall on consumers or producers? Explain.
The incidence of tax would be equally shared between consumers and producers.
25. Calculate the consumer surplus if consumers can get this product at the world price of $7.
CS = $320 = ($15 - $7) x 80/2
26. Calculate the elasticity of demand coefficient between the price of $10 and $9.
+20%/-10% = .2/-.1 = -2 The demand in this range is elastic
27. Calculate the elasticity of supply coefficient between the price of $10 and $12.
+40%/+20% = .4/.2 = 2
28. Assume the price fell from $10 to $8 causing the quantity demanded of a different product to increase
from 100 to 120 units. Calculate the cross-price elasticity of demand coefficient.
+20%/-20% = .2/-.2 = -1 These two products are complements (not substitutes)
29. Assume instead that the demand changes in such a way that a decrease in supply results in an
equilibrium price and quantity of $12 and 50 units. Calculate the elasticity of demand coefficient.
0, The demand would be perfectly inelastic (vertical).
© Copyright Jacob Clifford 2020. Ultimate Review Packet
Teachers- Do NOT use this in your classroom. Contact me if you want to use this resource with your students
Microeconomics
Unit 2 Practice Sheet (Video Help)
Part 3 - FRQ Practice- Complete the following question from the 2015 AP exam (Question 3).
© Copyright Jacob Clifford 2020. Ultimate Review Packet
Teachers- Do NOT use this in your classroom. Contact me if you want to use this resource with your students
Microeconomics
Unit 2 Practice Sheet (Video Help)
© Copyright Jacob Clifford 2020. Ultimate Review Packet
Teachers- Do NOT use this in your classroom. Contact me if you want to use this resource with your students
