Question 1

Government intervention in agricultural markets in the U.S.began in the

Accepted Answer

A) 1920s. 
B) 1930s. 
C) 1950s. 
D) 1970s. 
A) 1920s. 
B) 1930s. 
C) 1950s. 
D) 1970s.

Question 2

Table 4-8
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Hourly Wage } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Demanded }
\end{array} \
\hline \$ 8.00 & 350,000 & 390,000 \
\hline 8.50 & 360,000 & 380,000 \
\hline 9.00 & 370,000 & 370,000 \
\hline 9.50 & 380,000 & 360,000 \
\hline 10.00 & 390,000 & 350,000 \
\hline 10.50 & 400,000 & 340,000 \
\hline
\end{array}$$ 
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.If a minimum wage of $10.00 an hour is mandated,what is the quantity of labor supplied?

Accepted Answer

A) 390,000 
B) 370,000 
C) 350,000 
D) 40,000 
A) 390,000 
B) 370,000 
C) 350,000 
D) 40,000

Question 3

Table 4-8
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Hourly Wage } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Demanded }
\end{array} \
\hline \$ 8.00 & 350,000 & 390,000 \
\hline 8.50 & 360,000 & 380,000 \
\hline 9.00 & 370,000 & 370,000 \
\hline 9.50 & 380,000 & 360,000 \
\hline 10.00 & 390,000 & 350,000 \
\hline 10.50 & 400,000 & 340,000 \
\hline
\end{array}$$ 
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?

Accepted Answer

A) W = $10.00; Q = 390,000 
B) W = $9.50; Q = 380,000 
C) W = $8.50; Q = 340,000 
D) W = $8.00; Q = 350,000 
A) W = $10.00; Q = 390,000 
B) W = $9.50; Q = 380,000 
C) W = $8.50; Q = 340,000 
D) W = $8.00; Q = 350,000

Question 4

Which of the following statements is not true?

Accepted Answer

A) Consumer surplus measures the difference between the highest price a consumer is willing to pay for a product and the price she actually pays. 
B) Marginal benefit is the additional benefit to a consumer from consuming one more unit of a product. 
C) Consumer surplus measures the net benefit from participating in a market. 
D) Producer surplus measures the total benefit received by producers from participating in a market. 
A) Consumer surplus measures the difference between the highest price a consumer is willing to pay for a product and the price she actually pays. 
B) Marginal benefit is the additional benefit to a consumer from consuming one more unit of a product. 
C) Consumer surplus measures the net benefit from participating in a market. 
D) Producer surplus measures the total benefit received by producers from participating in a market.

Question 5

Who was the economist who first proposed that governments use taxes and subsidies to correct for externalities?

Accepted Answer

A) Ronald Coase 
B) A.C.Pigou 
C) Adam Smith 
D) David Hume 
A) Ronald Coase 
B) A.C.Pigou 
C) Adam Smith 
D) David Hume

Question 6

When there is a negative externality,the private cost of production ________ the social cost of production.

Accepted Answer

A) is greater than 
B) is equal to 
C) eliminates 
D) is less than 
A) is greater than 
B) is equal to 
C) eliminates 
D) is less than

Question 7

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 1 ice cream cone?

Accepted Answer

A) $0.50 
B) $3.50 
C) $9.00 
D) $13.50 
A) $0.50 
B) $3.50 
C) $9.00 
D) $13.50

Question 8

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 the deadweight loss after the imposition of the ceiling?

Accepted Answer

A) $50,000 
B) $125,000 
C) $175,000 
D) $260,000 
A) $50,000 
B) $125,000 
C) $175,000 
D) $260,000

Question 9

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

Accepted Answer

A) $5. 
B) $60. 
C) $140. 
D) $200. 
A) $5. 
B) $60. 
C) $140. 
D) $200.

Question 10

Figure 4-25
   
Figure 4-25 illustrates the market for gasoline before and after the government imposes a tax to bring about the efficient level of gasoline production.
-Refer to Figure 4-25.The market equilibrium price of gasoline is ________ per gallon.

Accepted Answer

A) $3.00 
B) $3.75 
C) $4.25 
D) $5.00 
A) $3.00 
B) $3.75 
C) $4.25 
D) $5.00

Question 11

Which of the following conditions holds in an economically efficient competitive market equilibrium?

Accepted Answer

A) The deadweight loss is positive but at a minimum. 
B) Producer and consumer surplus are exactly equal in size. 
C) There are no positive and no negative external effects from consumption and production. 
D) The marginal benefit of the last unit produced and consumed is maximized. 
A) The deadweight loss is positive but at a minimum. 
B) Producer and consumer surplus are exactly equal in size. 
C) There are no positive and no negative external effects from consumption and production. 
D) The marginal benefit of the last unit produced and consumed is maximized.

Question 12

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.Suppose that instead of a price ceiling,the government imposed a price floor of R₁.What area represents the deadweight loss after the imposition of the price floor?

Accepted Answer

A) G + H 
B) J + H 
C) C + E + J + H 
D) C + E 
A) G + H 
B) J + H 
C) C + E + J + H 
D) C + E

Question 13

The efficient level of paper production will occur where the

Accepted Answer

A) marginal private benefit from consuming paper is equal to the marginal social cost of production. 
B) marginal social benefit from consuming paper is equal to the marginal social cost of production. 
C) the economically efficient level of the output of paper is equal to the economically efficient level of inputs. 
D) production of paper no longer produces negative externalities. 
A) marginal private benefit from consuming paper is equal to the marginal social cost of production. 
B) marginal social benefit from consuming paper is equal to the marginal social cost of production. 
C) the economically efficient level of the output of paper is equal to the economically efficient level of inputs. 
D) production of paper no longer produces negative externalities.

Question 14

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?

Accepted Answer

A) $240 
B) $300 
C) $340 
D) $720 
A) $240 
B) $300 
C) $340 
D) $720

Question 15

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

Accepted Answer

Producer surplus is

Question 16

Figure 4-3
   
Figure 4-3 shows Kendra's demand curve for ice-cream cones.
-Refer to Figure 4-3.Kendra's marginal benefit from consuming the second ice cream cone is

Accepted Answer

A) $6.50. 
B) $6.00. 
C) $3.00. 
D) $2.25. 
A) $6.50. 
B) $6.00. 
C) $3.00. 
D) $2.25.

Question 17

Table 4-8
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Hourly Wage } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Demanded }
\end{array} \
\hline \$ 8.00 & 350,000 & 390,000 \
\hline 8.50 & 360,000 & 380,000 \
\hline 9.00 & 370,000 & 370,000 \
\hline 9.50 & 380,000 & 360,000 \
\hline 10.00 & 390,000 & 350,000 \
\hline 10.50 & 400,000 & 340,000 \
\hline
\end{array}$$ 
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.If a minimum wage of $10.50 an hour is mandated,what is the quantity of labor demanded?

Accepted Answer

A) 400,000 
B) 370,000 
C) 340,000 
D) 60,000 
A) 400,000 
B) 370,000 
C) 340,000 
D) 60,000

Question 18

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

Accepted Answer

A)  C + E 
B) A + C + E 
C) A + B 
D) B + D 
A)  C + E 
B) A + C + E 
C) A + B 
D) B + D

Question 19

The market price for coffee is $2.25 per cup.Austin is willing to pay $5.00 per cup,Colin is willing to pay $4.00 per cup,Lucy is willing to pay $3.00 per cup,and Ike is willing to pay $2.00 per cup.Construct a graph showing the consumer surplus for each cup of coffee purchased.How many cups of coffee will be purchased? What is the value of the consumer surplus each of the four consumers receives from their coffee purchases?

Accepted Answer

@#IMG-DLM& 3 cups of coffee will be purchased.Aust

Question 20

Economic efficiency is achieved when there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and

Accepted Answer

A) economic surplus plus consumer surplus equals producer surplus. 
B) consumer surplus plus producer surplus is maximized. 
C) economic surplus is minimized. 
D) the difference between consumer surplus and producer surplus is maximized. 
A) economic surplus plus consumer surplus equals producer surplus. 
B) consumer surplus plus producer surplus is maximized. 
C) economic surplus is minimized. 
D) the difference between consumer surplus and producer surplus is maximized.

Government intervention in agricultural markets in the U.S.began in the

Which of the following statements is not true?

Who was the economist who first proposed that governments use taxes and subsidies to correct for externalities?

When there is a negative externality,the private cost of production ________ the social cost of production.

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 1 ice cream cone?

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 the deadweight loss after the imposition of the ceiling?

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

Figure 4-25 Figure 4-25 illustrates the market for gasoline before and after the government imposes a tax to bring about the efficient level of gasoline production. -Refer to Figure 4-25.The market equilibrium price of gasoline is ________ per gallon.

Which of the following conditions holds in an economically efficient competitive market equilibrium?

The efficient level of paper production will occur where the

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?

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

Figure 4-3 Figure 4-3 shows Kendra's demand curve for ice-cream cones. -Refer to Figure 4-3.Kendra's marginal benefit from consuming the second ice cream cone is

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

Economic efficiency is achieved when there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 4: Market Efficiency and Market Failure

Government intervention in agricultural markets in the U.S.began in the

Which of the following statements is not true?

Who was the economist who first proposed that governments use taxes and subsidies to correct for externalities?

When there is a negative externality,the private cost of production ________ the social cost of production.

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 1 ice cream cone?

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 the deadweight loss after the imposition of the ceiling?

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

Figure 4-25 Figure 4-25 illustrates the market for gasoline before and after the government imposes a tax to bring about the efficient level of gasoline production. -Refer to Figure 4-25.The market equilibrium price of gasoline is ________ per gallon.

Which of the following conditions holds in an economically efficient competitive market equilibrium?

The efficient level of paper production will occur where the

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?

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

Figure 4-3 Figure 4-3 shows Kendra's demand curve for ice-cream cones. -Refer to Figure 4-3.Kendra's marginal benefit from consuming the second ice cream cone is

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

Economic efficiency is achieved when there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters