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

Table 4.7 -Refer to Table 4-7.The equations above describe the demand and supply for Bubba's Fried Jellybeans.The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units.What is the value of consumer surplus?

If the market price is at equilibrium, the producer surplus is minimized.

Figure 4-4 -Refer to Figure 4-4.The figure above represents the market for pecans.Assume that this is a competitive market.At a quantity of 4,000 pounds

The cities of Francistown and Nalady are five miles apart.Francistown enacts a rent control law that puts a ceiling on rents well below their equilibrium market value.Predict the impact of this law on the competitive equilibrium rent in Nalady, which does not have a rent control law. a.Illustrate your answer with one demand and supply graph for the apartment market in Francistown and another demand and supply graph for the apartment market in Nalady. b.Make sure that your graphs clearly show (1)the initial equilibrium before the rent control in both markets and (2)what happens after the imposition of rent control. c.Clearly show any shifts in the demand or supply curves, and the movement along the curves for each market. d.Label your graphs fully and provide written explanation for your graphs.

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.Arnold's marginal benefit from consuming the third burrito is

Table 4.7 -Refer to Table 4-7.The equations above describe the demand and supply for Bubba's Fried Jellybeans.What are the equilibrium price and quantity (in thousands)for Bubba's Fried Jellybeans?

Marginal cost is the additional cost to a firm of producing one more unit of a good or service.

The payroll tax is a tax imposed on ________ that is used to fund Social Security and Medicare.

In a city with rent-controlled apartments, all of the following are true except

Marginal cost is

Shortage means the same thing as scarcity.

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

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 an hour is mandated, what is the quantity of labor supplied?

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

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?

Table 4.7 -Refer to Table 4-7.The equations above describe the demand and supply for Bubba's Fried Jellybeans.The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units.What is the value of economic surplus in this 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.As a result of the tax, is there a loss in consumer surplus?

David Card and Alan Krueger conducted a study of fast-food restaurants in New Jersey and Pennsylvania.The study found that

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $3.00, what is the maximum number of burritos that Arnold will buy?

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?