Question 1

What is marginal benefit? Which curve is also referred to as a marginal benefit curve?

Accepted Answer

Marginal benefit is the additi

Question 2

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 the deadweight loss after the imposition of the ceiling?

Accepted Answer

A) $50,000 
B) $100,000 
C) $150,000 
D) $200,000 
A) $50,000 
B) $100,000 
C) $150,000 
D) $200,000

Question 3

________ refers to the reduction in economic surplus resulting from not being in competitive equilibrium.

Accepted Answer

A) Marginal cost 
B) Producer atrophy 
C) Deadweight loss 
D) Economic shortage 
A) Marginal cost 
B) Producer atrophy 
C) Deadweight loss 
D) Economic shortage

Question 4

Which of the following statements is true?

Accepted Answer

A) Consumer surplus measures the total benefit from participating in a market. 
B) When a market is in equilibrium, consumer surplus equals producer surplus. 
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 total benefit from participating in a market. 
B) When a market is in equilibrium, consumer surplus equals producer surplus. 
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

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

Accepted Answer

A) 40,000 
B) 570,000 
C) 610,000 
D) 1,180,000 
A) 40,000 
B) 570,000 
C) 610,000 
D) 1,180,000

Question 6

Marginal cost is

Accepted Answer

A) the total cost of producing one unit of a good or service. 
B) the average cost of producing a good or service. 
C) the difference between the lowest price a firm would have been willing to accept and the price it actually receives. 
D) the additional cost to a firm of producing one more unit of a good or service. 
A) the total cost of producing one unit of a good or service. 
B) the average cost of producing a good or service. 
C) the difference between the lowest price a firm would have been willing to accept and the price it actually receives. 
D) the additional cost to a firm of producing one more unit of a good or service.

Question 7

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 ticket falls from $25 to $10,

Accepted Answer

A) only three tickets will be sold. 
B) consumer surplus decreases from $24 to $12. 
C) consumer surplus increases from $0 to $31. 
D) everyone will buy a ticket. 
A) only three tickets will be sold. 
B) consumer surplus decreases from $24 to $12. 
C) consumer surplus increases from $0 to $31. 
D) everyone will buy a ticket.

Question 8

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) Quantity demanded will decrease, quantity supplied will increase, and a surplus will result. 
B) Quantity demanded will increase, quantity supplied will decrease, and a surplus will result. 
C) Quantity demanded will decrease, quantity supplied will increase, and a shortage will result. 
D) Quantity demanded will increase, quantity supplied will decrease, and a shortage will result. 
A) Quantity demanded will decrease, quantity supplied will increase, and a surplus will result. 
B) Quantity demanded will increase, quantity supplied will decrease, and a surplus will result. 
C) Quantity demanded will decrease, quantity supplied will increase, and a shortage will result. 
D) Quantity demanded will increase, quantity supplied will decrease, and a shortage will result.

Question 9

Economic efficiency is defined as a market outcome in which the marginal benefit to consumers of the last unit produced is equal to the marginal cost of production, and in which

Accepted Answer

A) the sum of consumer surplus and producer surplus is at a maximum. 
B) economic surplus is minimized. 
C) the sum of the benefits to firms is equal to the sum of the benefits to consumers. 
D) the sum of consumer surplus and producer surplus is minimized. 
A) the sum of consumer surplus and producer surplus is at a maximum. 
B) economic surplus is minimized. 
C) the sum of the benefits to firms is equal to the sum of the benefits to consumers. 
D) the sum of consumer surplus and producer surplus is minimized.

Question 10

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

Accepted Answer

A) economic surplus is maximized. 
B) not enough consumers want to buy pecans. 
C) the quantity supplied is less than the economically efficient quantity. 
D) the quantity supplied is economically efficient but the quantity demanded is economically inefficient. 
A) economic surplus is maximized. 
B) not enough consumers want to buy pecans. 
C) the quantity supplied is less than the economically efficient quantity. 
D) the quantity supplied is economically efficient but the quantity demanded is economically inefficient.

Question 11

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.As a result of the tax, is there a loss in consumer surplus?

Accepted Answer

A) Yes, because consumers pay a price above the economically efficient price. 
B) No, because the producer pays the tax. 
C) No, because the market reaches a new equilibrium 
D) No, because consumers are charged a lower price to cover their tax burden. 
A) Yes, because consumers pay a price above the economically efficient price. 
B) No, because the producer pays the tax. 
C) No, because the market reaches a new equilibrium 
D) No, because consumers are charged a lower price to cover their tax burden.

Question 12

Suppose an excise tax of $1 is imposed on every case of beer sold and sellers are responsible for paying this tax.How would the imposition of the tax be illustrated in a graph?

Accepted Answer

A) The supply curve for cases of beer would shift down by $1. 
B) The supply curve for cases of beer would shift up by more than $1. 
C) The supply curve for cases of beer would shift up by less than $1. 
D) The supply curve for cases of beer would shift up by $1. 
A) The supply curve for cases of beer would shift down by $1. 
B) The supply curve for cases of beer would shift up by more than $1. 
C) The supply curve for cases of beer would shift up by less than $1. 
D) The supply curve for cases of beer would shift up by $1.

Question 13

When a competitive equilibrium is achieved in a market,

Accepted Answer

A) all individuals are better off than they would be if a price ceiling or price floor was imposed by government. 
B) the total net benefit to society is maximized. 
C) the total benefits to consumers are equal to the total benefits to producers. 
D) economic surplus equals the deadweight loss. 
A) all individuals are better off than they would be if a price ceiling or price floor was imposed by government. 
B) the total net benefit to society is maximized. 
C) the total benefits to consumers are equal to the total benefits to producers. 
D) economic surplus equals the deadweight loss.

Question 14

Figure 4-3
   
Figure 4-3 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 4-3.What is the value of consumer surplus at a price of $18?

Accepted Answer

A) $60 
B) $120 
C) $180 
D) $240 
A) $60 
B) $120 
C) $180 
D) $240

Question 15

Paul goes to Dick's Sporting Goods to buy a new tennis racquet.He is willing to pay $200 for a new racquet, but buys one on sale for $125.Paul's consumer surplus from the purchase is

Accepted Answer

A) $325. 
B) $200. 
C) $125. 
D) $75. 
A) $325. 
B) $200. 
C) $125. 
D) $75.

Question 16

The following equations represent the demand and supply for silver pendants.
Qᴰ = 50 - 2P
Qˢ = -10 + 2P
What is the equilibrium price (P)and quantity (Q - in thousands)of pendants?

Accepted Answer

A) P = $15; Q = 20 thousand 
B) P = $50; Q = 10 thousand 
C) P = $20; Q = 15 thousand 
D) P = $10; Q = 30 thousand 
A) P = $15; Q = 20 thousand 
B) P = $50; Q = 10 thousand 
C) P = $20; Q = 15 thousand 
D) P = $10; Q = 30 thousand

Question 17

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?

Accepted Answer

A) $1.50 
B) $6.00 
C) $7.00 
D) $10.00 
A) $1.50 
B) $6.00 
C) $7.00 
D) $10.00

Question 18

If the quantity of soccer balls demanded is represented by the demand equation Qᴰ = 80 - 2P, then to solve for the price of soccer balls, the equation would be rewritten as

Accepted Answer

A) P = 1.6Qᴰ + 80. 
B) P = 80 - Qᴰ. 
C) P = 40 - 0.5Qᴰ. 
D) P = Qᴰ + 160. 
A) P = 1.6Qᴰ + 80. 
B) P = 80 - Qᴰ. 
C) P = 40 - 0.5Qᴰ. 
D) P = Qᴰ + 160.

Question 19

Table 4-4
   
Table 4-4 shows the demand and supply schedules for the labor market in the city of Pixley.
-Refer to Table 4-4.If a minimum wage of $12.50 is mandated, there will be a

Accepted Answer

A) shortage of 40,000 units of labor. 
B) surplus of 40,000 units of labor. 
C) shortage of 80,000 units of labor. 
D) surplus of 80,000 units of labor. 
A) shortage of 40,000 units of labor. 
B) surplus of 40,000 units of labor. 
C) shortage of 80,000 units of labor. 
D) surplus of 80,000 units of labor.

Question 20

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

Accepted Answer

A) sellers bear the entire burden of the tax. 
B) the tax burden will be shared among the government, buyers, and sellers. 
C) buyers bear the entire burden of the tax. 
D) the tax burden will be shared by buyers and sellers. 
A) sellers bear the entire burden of the tax. 
B) the tax burden will be shared among the government, buyers, and sellers. 
C) buyers bear the entire burden of the tax. 
D) the tax burden will be shared by buyers and sellers.

What is marginal benefit? Which curve is also referred to as a marginal benefit curve?

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 the deadweight loss after the imposition of the ceiling?

________ refers to the reduction in economic surplus resulting from not being in competitive equilibrium.

Which of the following statements is true?

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

Marginal cost is

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 ticket falls from $25 to $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?

Economic efficiency is defined as a market outcome in which the marginal benefit to consumers of the last unit produced is equal to the marginal cost of production, and in which

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

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.As a result of the tax, is there a loss in consumer surplus?

Suppose an excise tax of $1 is imposed on every case of beer sold and sellers are responsible for paying this tax.How would the imposition of the tax be illustrated in a graph?

When a competitive equilibrium is achieved in a market,

Figure 4-3 Figure 4-3 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 4-3.What is the value of consumer surplus at a price of $18?

Paul goes to Dick's Sporting Goods to buy a new tennis racquet.He is willing to pay $200 for a new racquet, but buys one on sale for $125.Paul's consumer surplus from the purchase is

The following equations represent the demand and supply for silver pendants. Qᴰ = 50 - 2P Qˢ = -10 + 2P What is the equilibrium price (P)and quantity (Q - in thousands)of pendants?

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?

If the quantity of soccer balls demanded is represented by the demand equation Qᴰ = 80 - 2P, then to solve for the price of soccer balls, the equation would be rewritten as

Table 4-4 Table 4-4 shows the demand and supply schedules for the labor market in the city of Pixley. -Refer to Table 4-4.If a minimum wage of $12.50 is mandated, there will be a

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

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

What is marginal benefit? Which curve is also referred to as a marginal benefit curve?

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 the deadweight loss after the imposition of the ceiling?

________ refers to the reduction in economic surplus resulting from not being in competitive equilibrium.

Which of the following statements is true?

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

Marginal cost is

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 ticket falls from $25 to $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?

Economic efficiency is defined as a market outcome in which the marginal benefit to consumers of the last unit produced is equal to the marginal cost of production, and in which

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

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.As a result of the tax, is there a loss in consumer surplus?

Suppose an excise tax of $1 is imposed on every case of beer sold and sellers are responsible for paying this tax.How would the imposition of the tax be illustrated in a graph?

When a competitive equilibrium is achieved in a market,

Figure 4-3 Figure 4-3 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 4-3.What is the value of consumer surplus at a price of $18?

Paul goes to Dick's Sporting Goods to buy a new tennis racquet.He is willing to pay $200 for a new racquet, but buys one on sale for $125.Paul's consumer surplus from the purchase is

The following equations represent the demand and supply for silver pendants. Qᴰ = 50 - 2P Qˢ = -10 + 2P What is the equilibrium price (P)and quantity (Q - in thousands)of pendants?

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?

If the quantity of soccer balls demanded is represented by the demand equation Qᴰ = 80 - 2P, then to solve for the price of soccer balls, the equation would be rewritten as

Table 4-4 Table 4-4 shows the demand and supply schedules for the labor market in the city of Pixley. -Refer to Table 4-4.If a minimum wage of $12.50 is mandated, there will be a

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

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