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

Figure 4-8 Figure 4-8 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month. -Refer to Figure 4-8. Suppose that instead of a rent ceiling, the government imposed a price floor of $2,000 per month for apartments. What is the quantity of apartments demanded at the new price?

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 $3.00, what is the consumer surplus on the first ice cream cone?

Table 4-7 Table 4-7 shows the demand and supply schedules for the labor market in the city of Pixley. -Refer to Table 4-7. If a minimum wage of $11.50 an hour is mandated, what is the quantity of labor supplied?

Figure 4-12 -Refer to Figure 4-12 which shows the market for vitamins. Suppose the government imposes a price ceiling of P_v. How will the price ceiling affect the quantity supplied, quantity demanded, and quantity exchanged?

Table 4-8 Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. -Refer to Table 4-8. Suppose that the quantity of labor demanded decreases by 40,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?

Lucinda buys a new GPS system for $250. She receives consumer surplus of $75 from the purchase. What value does Lucinda place on her GPS system?

If the market price is at equilibrium, the deadweight loss is maximized.

Figure 4-5 -Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. Which of the following is true?

If Uber is required to start paying the value added tax (VAT) in Great Britain, this will have the potential to ________ the equilibrium price in this market and, therefore, ________ efficiency.

The division of the burden of a tax between buyers and sellers in a market is called tax allocation.

Figure 4-5 -Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If 8,000 pounds of pecans are sold

Figure 4-7 -Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $1, what changes in the market would result in an economically efficient output?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1. Arnold's marginal benefit from consuming the third burrito is

Marginal cost is the additional cost to a firm of producing one more unit of a good or service.

The following equations represent the demand and supply for bottles of nail polish. Q^D = 25 - P Q^S = -15 + 3P What is the equilibrium price (P) and quantity (Q - in thousands) of bottles of nail polish?

Table 4-7 Table 4-7 shows the demand and supply schedules for the labor market in the city of Pixley. -Refer to Table 4-7. If a minimum wage of $11.50 an hour is mandated, what is the quantity of labor demanded?

In order to be binding, a price floor

The graph below represents the market for walnuts. Identify the values of the marginal benefit and the marginal cost at the output levels of 2,000 pounds, 4,000 pounds, and 6,000 pounds. At each of these output levels, state whether output is inefficiently high, inefficiently low, or economically efficient.

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1. If the market price is $3.00, what is the maximum number of burritos that Arnold will buy?

Marco goes to the pet store to buy a dozen Koi fish for his new Koi pond. He is willing to pay $200 for the dozen fish, but buys them for a total of $140. Marco's consumer surplus from the purchase is