Question 1

What is "tax incidence"? What determines tax incidence in a competitive market?

Accepted Answer

Tax incidence refers to the actual divis

Question 2

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 buyers?

Accepted Answer

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

Question 3

Price ceilings are illegal in the United States.

Accepted Answer

A) True 
 B)False

Question 4

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 cowboy hats is $50, how many hats will be produced?

Accepted Answer

A) 0 
B) 1 
C) 2 
D) 4 
A) 0 
B) 1 
C) 2 
D) 4

Question 5

If 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 consumer surplus plus producer surplus is maximized, then

Accepted Answer

A) maximum deadweight loss occurs. 
B) economic efficiency is achieved. 
C) profits are maximized. 
D) costs are minimized. 
A) maximum deadweight loss occurs. 
B) economic efficiency is achieved. 
C) profits are maximized. 
D) costs are minimized.

Question 6

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 is $25,

Accepted Answer

A) everyone will buy a ticket. 
B) consumer surplus will be maximized. 
C) Anya's consumer surplus is $1. 
D) no one will buy a ticket. 
A) everyone will buy a ticket. 
B) consumer surplus will be maximized. 
C) Anya's consumer surplus is $1. 
D) no one will buy a ticket.

Question 7

If the market price is at equilibrium, the deadweight loss is maximized.

Accepted Answer

A) True 
 B)False

Question 8

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.What is the size of the per-unit tax?

Accepted Answer

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

Question 9

Suppose a 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 10

In New York City, about 1 million apartments are subject to rent control by the local government.Rent control

Accepted Answer

A) puts a legal limit on the rent that landlords can charge for an apartment. 
B) is a price floor which sets a minimum rent for apartments. 
C) only applies to those apartments which are owned and rented out by the local government. 
D) is a government policy which limits apartment rental to those people whose incomes are less than $50,000 per year. 
A) puts a legal limit on the rent that landlords can charge for an apartment. 
B) is a price floor which sets a minimum rent for apartments. 
C) only applies to those apartments which are owned and rented out by the local government. 
D) is a government policy which limits apartment rental to those people whose incomes are less than $50,000 per year.

Question 11

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 12

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.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?

Accepted Answer

A) W = $8.50; Q = 550,000 
B) W = $12.50; Q = 630,000 
C) W = $9.50; Q = 570,000 
D) W = $9.50; Q = 590,000 
A) W = $8.50; Q = 550,000 
B) W = $12.50; Q = 630,000 
C) W = $9.50; Q = 570,000 
D) W = $9.50; Q = 590,000

Question 13

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 14

Table 4-6
  
-Refer to Table 4-6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.What are the equilibrium price and quantity (in thousands)for Chef Ernie's sushi?

Accepted Answer

A) $80 and 80 thousand 
B) $60 and 20 thousand 
C) $50 and 100 thousand 
D) $40 and 50 thousand 
A) $80 and 80 thousand 
B) $60 and 20 thousand 
C) $50 and 100 thousand 
D) $40 and 50 thousand

Question 15

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 producer surplus?

Accepted Answer

A) $100 thousand 
B) $200 thousand 
C) $600 thousand 
D) $800 thousand 
A) $100 thousand 
B) $200 thousand 
C) $600 thousand 
D) $800 thousand

Question 16

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 17

Using a supply and demand graph, illustrate the effect of the addition of a $10.00 unit tax on digital cameras, where the entire tax burden falls on the seller.Assume the equilibrium price before the tax is $125 and the equilibrium quantity is 50,000.What happens to the price and quantity after the tax is implemented?

Accepted Answer

@#IMG-DLM& Price doe

Question 18

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 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 19

Figure 4-1
   
Figure 4-1 shows Arnold's demand curve for burritos.
-Refer to Figure 4-1.If the market price is $1.50, what is the consumer surplus on the first burrito?

Accepted Answer

A) $0.50 
B) $1.00 
C) $1.50 
D) $7.50 
A) $0.50 
B) $1.00 
C) $1.50 
D) $7.50

Question 20

Consumer surplus in a market for a product would be equal to ________ if the market price was zero.

Accepted Answer

A) zero 
B) the area between the supply curve and the demand curve 
C) the area above the supply curve 
D) the area under the demand curve 
A) zero 
B) the area between the supply curve and the demand curve 
C) the area above the supply curve 
D) the area under the demand curve

What is "tax incidence"? What determines tax incidence in a competitive market?

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 buyers?

Price ceilings are illegal in the United States.

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 cowboy hats is $50, how many hats will be produced?

If 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 consumer surplus plus producer surplus is maximized, then

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 is $25,

If the market price is at equilibrium, the deadweight loss is maximized.

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.What is the size of the per-unit tax?

Suppose a 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?

In New York City, about 1 million apartments are subject to rent control by the local government.Rent control

When a competitive equilibrium is achieved in a market

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.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 4-6 -Refer to Table 4-6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.What are the equilibrium price and quantity (in thousands)for Chef Ernie's sushi?

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 producer surplus?

Which of the following statements is true?

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 producer surplus at a price of $18?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $1.50, what is the consumer surplus on the first burrito?

Consumer surplus in a market for a product would be equal to ________ if the market price was zero.

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 More Realistic Setting

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

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

What is "tax incidence"? What determines tax incidence in a competitive market?

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 buyers?

Price ceilings are illegal in the United States.

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 cowboy hats is $50, how many hats will be produced?

If 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 consumer surplus plus producer surplus is maximized, then

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 is $25,

If the market price is at equilibrium, the deadweight loss is maximized.

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.What is the size of the per-unit tax?

Suppose a 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?

In New York City, about 1 million apartments are subject to rent control by the local government.Rent control

When a competitive equilibrium is achieved in a market

Table 4-6 -Refer to Table 4-6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.What are the equilibrium price and quantity (in thousands)for Chef Ernie's sushi?

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 producer surplus?

Which of the following statements is true?

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 producer surplus at a price of $18?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $1.50, what is the consumer surplus on the first burrito?

Consumer surplus in a market for a product would be equal to ________ if the market price was zero.

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 More Realistic Setting

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