Exam 4: Market Efficiency and Market Failure

In cities with rent control,people have an incentive to list their apartments on sites such as Airbnb at rents ________ the controlled rates,because rent control causes a ________ of apartments.

Figure 4-16 Figure 4-16 shows a market with a negative externality. -Refer to Figure 4-16.The marginal benefit of the last unit produced is represented by the price

Figure 4-19 Figure 4-19 shows a market with an externality.The current market equilibrium output of Q₁ is not the economically efficient output.The economically efficient output is Q₂. -Refer to Figure 4-19.If,because of an externality,the economically efficient output is Q₂ and not the current equilibrium output of Q₁,what does D₂ represent?

The area above the market supply curve and below the market price

Table 4-3 The Waco Kid's Cowboy Hats Marginal Cost (dollars) 1 st hat \ 24 2nd hat 30 3rd hat 38 4th hat 46 -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 price of cowboy hats increases from $38 to $46

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

Figure 4-7 -Refer to Figure 4-7.The figure above represents the market for iced tea.Assume that this is a competitive market.At a price of $1

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 value of the portion of consumer surplus transferred to producers as a result of the price floor?

The total amount of producer surplus in a market is equal to the area below the supply curve.

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?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 3 burritos?

Table 4-7 Hourly Wage (dollars) Quantity of Labor Supplied Quantity of Labor Demanded \ 7.50 530,000 650,000 8.50 550,000 630,000 9.50 570,000 610,000 10.50 590,000 590,000 11.50 610,000 570,000 12.50 630,000 550,000 Table 4-7 shows the demand and supply schedules for labor market in the city of Pixley. -Refer to Table 4-7.If a minimum wage of $12.50 an hour is mandated,what is the quantity of labor demanded?

Consumer surplus in a market for a product would be equal to the area under the demand curve if

Table 4-2 Bonsumer Willingness to Pay Arlya \ 24 Basil 20 Celeste 15 Dralor 12 Esther 7 -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 ticket is $25

The difference between consumer surplus and producer surplus in a market is equal to the deadweight loss.

If the social cost of producing a good or service exceeds the private cost

Table 4-6 Marko's Polos Marginal Cost (dollars) 1 st shirt \ 7 2nd shirt 10 3rd shirt 15 4th shirt 20 -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 $30,Marko's will produce

An externality is an example of a market failure.

Figure 4-17 -Refer to Figure 4-17.The deadweight loss due to the externality is represented by the area

Deadweight loss refers to the reduction in economic surplus resulting from a market not being in competitive equilibrium.