Question 1

The excess burden of a tax is also known as a deadweight loss.

Accepted Answer

A) True 
 B)False

Question 2

The minimum wage is an example of a price ceiling.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a result of imposing a rent ceiling?

Accepted Answer

A) Some consumer surplus is converted to producer surplus. 
B) There is a reduction in the quantity of apartments supplied. 
C) There is an increase in the quantity of apartments demanded. 
D) The marginal benefit of the last apartment rented is greater than the marginal cost of supplying it. 
A) Some consumer surplus is converted to producer surplus. 
B) There is a reduction in the quantity of apartments supplied. 
C) There is an increase in the quantity of apartments demanded. 
D) The marginal benefit of the last apartment rented is greater than the marginal cost of supplying it.

Question 4

Figure 4-5
   
Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month.
-Refer to Figure 4-5.With rent control, the quantity supplied is 200 apartments.Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get.What is the highest rent they can get per month?

Accepted Answer

A) $1,000 
B) $1,500 
C) $2,000 
D) $2,300 
A) $1,000 
B) $1,500 
C) $2,000 
D) $2,300

Question 5

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 4 burritos?

Accepted Answer

A) $1.00 
B) $4.00 
C) $7.00 
D) $10.00 
A) $1.00 
B) $4.00 
C) $7.00 
D) $10.00

Question 6

Economists working for Uber, along with economists from the University of Oxford and the University of Chicago, estimated the consumer surplus attributed to Uber.For the entire United States, these economists estimated that the total consumer surplus from Uber in 2015 was

Accepted Answer

A) almost $0. 
B) $13.30 per customer. 
C) $2.88 billion. 
D) 6.76 billion. 
A) almost $0. 
B) $13.30 per customer. 
C) $2.88 billion. 
D) 6.76 billion.

Question 7

Each point on a ________ curve shows the willingness of consumers to purchase a product at different prices.

Accepted Answer

A) demand 
B) supply 
C) production possibilities 
D) marginal cost 
A) demand 
B) supply 
C) production possibilities 
D) marginal cost

Question 8

If the demand curve for a product is vertical, any tax increase on the product is paid for entirely by the consumer.

Accepted Answer

A) True 
 B)False

Question 9

Figure 4-2
  
-Refer to Figure 4-2.What area represents producer surplus at a price of P₂?

Accepted Answer

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

Question 10

Suppose a binding price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia.What will be the likely effect on the market for sparkling wine in Vinyardia?

Accepted Answer

A) Consumer surplus will increase. 
B) Producer surplus will increase. 
C) Deadweight loss will increase. 
D) Market efficiency will increase. 
A) Consumer surplus will increase. 
B) Producer surplus will increase. 
C) Deadweight loss will increase. 
D) Market efficiency will increase.

Question 11

Figure 4-5
   
Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month.
-Refer to Figure 4-5.What is the value of consumer surplus after the imposition of the ceiling?

Accepted Answer

A) $200,000 
B) $250,000 
C) $300,000 
D) $400,000 
A) $200,000 
B) $250,000 
C) $300,000 
D) $400,000

Question 12

Figure 4-11
  
-Refer to Figure 4-11.The figure above illustrates the markets for two goods, Good X and Good Y.Suppose an identical dollar tax is imposed on sellers in each market.
a.Compare the consumer burden and producer burden in each market.Illustrate your answer graphically.
b.If the goal of the government is to raise revenue with minimum impact to quantity consumed, in which market should the tax be imposed?
c.If the goal of the government is to discourage consumption, in which market should the tax be imposed?

Accepted Answer

a.See the figures be

Question 13

Economists are reluctant to state that price controls are desirable or undesirable because

Accepted Answer

A) it is impossible to evaluate the impact on quantity demanded and quantity supplied as a result of price controls. 
B) whether the gains from the winners exceed the losses from the losers is not strictly an economic question. 
C) sometimes price controls result in increases in economic efficiency and sometimes they result in decreases in economic efficiency. 
D) economists are reluctant to conduct positive analysis of price controls. 
A) it is impossible to evaluate the impact on quantity demanded and quantity supplied as a result of price controls. 
B) whether the gains from the winners exceed the losses from the losers is not strictly an economic question. 
C) sometimes price controls result in increases in economic efficiency and sometimes they result in decreases in economic efficiency. 
D) economists are reluctant to conduct positive analysis of price controls.

Question 14

Black markets only exist in developing nations.

Accepted Answer

A) True 
 B)False

Question 15

Figure 4-8
   
Figure 4-8 shows the market for beer. The government plans to impose a per-unit tax in this market.
-Refer to Figure 4-8.How much of the tax is paid by sellers?

Accepted Answer

A) $2 
B) $5 
C) $7 
D) $12 
A) $2 
B) $5 
C) $7 
D) $12

Question 16

What is the difference between scarcity and a shortage?

Accepted Answer

Scarcity is a situation in which unlimit

Question 17

Congress passed the ________ in 1996, the purpose of which was to phase out price floors and return to a free market in agriculture.

Accepted Answer

A) Rice and Beans Act 
B) Smoot-Hawley Act 
C) Agribusiness Act 
D) Freedom to Farm Act 
A) Rice and Beans Act 
B) Smoot-Hawley Act 
C) Agribusiness Act 
D) Freedom to Farm Act

Question 18

Table 4-6
  
-Refer to Table 4-6.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?

Accepted Answer

A) $300 thousand 
B) $600 thousand 
C) $1,200 thousand 
D) $1,600 thousand 
A) $300 thousand 
B) $600 thousand 
C) $1,200 thousand 
D) $1,600 thousand

Question 19

Figure 4-5
   
Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month.
-Refer to Figure 4-5.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 producer surplus after the imposition of the price floor?

Accepted Answer

A) $50,000 
B) $250,000 
C) $300,000 
D) $350,000 
A) $50,000 
B) $250,000 
C) $300,000 
D) $350,000

Question 20

In a competitive market equilibrium,

Accepted Answer

A) total consumer surplus equals total producer surplus. 
B) marginal benefit and marginal cost are maximized. 
C) consumers and producers benefit equally. 
D) the marginal benefit equals the marginal cost of the last unit sold. 
A) total consumer surplus equals total producer surplus. 
B) marginal benefit and marginal cost are maximized. 
C) consumers and producers benefit equally. 
D) the marginal benefit equals the marginal cost of the last unit sold.

The excess burden of a tax is also known as a deadweight loss.

The minimum wage is an example of a price ceiling.

Which of the following is not a result of imposing a rent ceiling?

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 4 burritos?

Economists working for Uber, along with economists from the University of Oxford and the University of Chicago, estimated the consumer surplus attributed to Uber.For the entire United States, these economists estimated that the total consumer surplus from Uber in 2015 was

Each point on a ________ curve shows the willingness of consumers to purchase a product at different prices.

If the demand curve for a product is vertical, any tax increase on the product is paid for entirely by the consumer.

Figure 4-2 -Refer to Figure 4-2.What area represents producer surplus at a price of P₂?

Suppose a binding price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia.What will be the likely effect on the market for sparkling wine in Vinyardia?

Figure 4-5 Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month. -Refer to Figure 4-5.What is the value of consumer surplus after the imposition of the ceiling?

Economists are reluctant to state that price controls are desirable or undesirable because

Black markets only exist in developing nations.

Figure 4-8 Figure 4-8 shows the market for beer. The government plans to impose a per-unit tax in this market. -Refer to Figure 4-8.How much of the tax is paid by sellers?

What is the difference between scarcity and a shortage?

Congress passed the ________ in 1996, the purpose of which was to phase out price floors and return to a free market in agriculture.

Table 4-6 -Refer to Table 4-6.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?

In a competitive market equilibrium,

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

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

The excess burden of a tax is also known as a deadweight loss.

The minimum wage is an example of a price ceiling.

Which of the following is not a result of imposing a rent ceiling?

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 4 burritos?

Economists working for Uber, along with economists from the University of Oxford and the University of Chicago, estimated the consumer surplus attributed to Uber.For the entire United States, these economists estimated that the total consumer surplus from Uber in 2015 was

Each point on a ________ curve shows the willingness of consumers to purchase a product at different prices.

If the demand curve for a product is vertical, any tax increase on the product is paid for entirely by the consumer.

Figure 4-2 -Refer to Figure 4-2.What area represents producer surplus at a price of P₂?

Suppose a binding price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia.What will be the likely effect on the market for sparkling wine in Vinyardia?

Figure 4-5 Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month. -Refer to Figure 4-5.What is the value of consumer surplus after the imposition of the ceiling?

Economists are reluctant to state that price controls are desirable or undesirable because

Black markets only exist in developing nations.

Figure 4-8 Figure 4-8 shows the market for beer. The government plans to impose a per-unit tax in this market. -Refer to Figure 4-8.How much of the tax is paid by sellers?

What is the difference between scarcity and a shortage?

Congress passed the ________ in 1996, the purpose of which was to phase out price floors and return to a free market in agriculture.

Table 4-6 -Refer to Table 4-6.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?

In a competitive market equilibrium,

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters