Exam 4: Economic Efficiency, Government Price Setting, and Taxes

Table 4-5 -Refer to Table 4-5. The table above lists the highest prices five consumers are willing to pay for a concert ticket. If the price of one of the tickets is $36,

In the market for gasoline, an increase in the federal excise tax on gasoline would shift the supply curve up.

Figure 4-10 Figure 4-10 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R₀. -Refer to Figure 4-10. What is the area that represents consumer surplus after the imposition of the ceiling?

Rent control is an example of a price floor.

The sum of consumer surplus and producer surplus is equal to

A ________ curve shows the marginal cost of producing one more unit of a good or service.

Figure 4-16 -Refer to Figure 4-16. Suppose the market is initially in equilibrium at price P₁ and now the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax? For demand curve D₁

In New York City, government limits on the supply of taxis resulted in a price ________ the competitive market level, which would typically ________ economic efficiency.

Figure 4-11 Figure 4-11 shows the demand and supply curves for the coffee market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at $7.00. -Refer to Figure 4-11. What is the value of the deadweight loss after the imposition of the price floor?

Figure 4-3 Figure 4-3 shows Kendra's demand curve for ice cream cones. -Refer to Figure 4-3. If the market price is $4.00, what is the maximum number of ice cream cones that Kendra will buy?

Suppliers will be willing to supply a product only if

Brett buys a new cell phone for $100. He receives consumer surplus of $80 from the purchase. How much does Brett value his cell phone?

What area on a supply and demand graph represents consumer surplus?

Figure 4-4 Figure 4-4 shows the market for tiger shrimp. The market is initially in equilibrium at a price of $15 and a quantity of 80. Now suppose producers decide to cut output to 40 in order to raise the price to $18. -Refer to Figure 4-4. What is the value of producer surplus at a price of $18?

The following equations represent the demand and supply for bird feeders. Q_D = 35 - P Q_S = -5 + 3P What is the equilibrium price (P) and quantity (Q - in thousands) of bird feeders?

Table 4-13 -Refer to Table 4-13. The equations above describe the demand and supply for Aunt Maud's Premium Hand Lotion. The equilibrium price and quantity for Aunt Maud's lotion are $20 and 30 thousand units. What is the value of consumer surplus?

To affect the market outcome, a price floor

For most goods and services, the burden of a tax is on the sellers.

Is there a difference between the "true burden" of a tax and who is legally required to pay a tax? Briefly explain.

If the quantity of soccer balls demanded is represented by the demand equation Q^D = 80 - 2P, then to solve for the price of soccer balls, the equation would be rewritten as