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

Figure 4-3 Figure 4-3 shows Kendra's demand curve for ice cream cones. -Refer to Figure 4-3. What is the total amount that Kendra is willing to pay for 2 ice cream cones?

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 portion of consumer surplus that has been transferred to producer surplus as a result of the price floor?

Figure 4-2 -Refer to Figure 4-2. What area represents the increase in producer surplus when the market price rises from P₁ to P₂?

Table 4-2 -Refer to Table 4-2. The table above lists the highest prices five consumers are willing to pay for a theater ticket. If the price of one of the tickets is $10,

A tax is efficient if it imposes a small excess burden relative to the tax revenue it raises.

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. Suppose that the quantity of labor demanded decreases by 80,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?

Table 4-11 -Refer to Table 4-11. The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick. The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units. What is the value of economic surplus in this market?

Economists refer a to a market where buying and selling take place at prices that violate government price regulations as

Suppose the demand curve for a product is downward sloping and the supply curve is upward sloping. If a unit tax is imposed in the market for this product

In a competitive market, the demand curve shows the ________ received by consumers and the supply curve shows the ________.

Monique buys a new television for $795. She receives consumer surplus of $355 from the purchase. How much does Monique value her television?

Figure 4-5 -Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3

Table 4-2 -Refer to Table 4-2. The table above lists the highest prices five consumers are willing to pay for a theater ticket. If the price of one of the tickets is $18,

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 $3

Table 4-6 -Refer to Table 4-6. The table above lists the marginal cost of polo shirts by Marko's, a firm that specializes in producing men's clothing. If the market price of Marko's polo shirts is $18,

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 consumer surplus at a price of $18?

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. At the equilibrium price of $15 consumers are willing to buy 80 pounds of tiger shrimp. Is this an economically efficient quantity?

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. What is the value of producer surplus after the imposition of the ceiling?

The total amount of producer surplus in a market is equal to

Table 4-3 -Refer to Table 4-3. The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specializes in producing western wear. If the market price of The Waco Kid's cowboy hats is $40,