Question 1

Suppliers will be willing to supply a product only if

Accepted Answer

A) the price received is less than the additional cost of producing the product. 
B) the price received is at least equal to the additional cost of producing the product. 
C) the price is higher than the average cost of producing the product. 
D) the price received is at least double the additional cost of producing the product. 
A) the price received is less than the additional cost of producing the product. 
B) the price received is at least equal to the additional cost of producing the product. 
C) the price is higher than the average cost of producing the product. 
D) the price received is at least double the additional cost of producing the product.

Question 2

When Airbnb customers in Malibu start paying hotel taxes, this will have the potential to raise the equilibrium price in this market and, therefore, decrease efficiency.This would have a tendency to

Accepted Answer

A) decrease producer surplus and decrease deadweight loss. 
B) decrease consumer surplus and increase deadweight loss. 
C) increase consumer surplus and increase producer surplus. 
D) maximize consumer surplus and minimize producer surplus. 
A) decrease producer surplus and decrease deadweight loss. 
B) decrease consumer surplus and increase deadweight loss. 
C) increase consumer surplus and increase producer surplus. 
D) maximize consumer surplus and minimize producer surplus.

Question 3

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 fourth burrito is

Accepted Answer

A) $0. 
B) $1.00. 
C) $2.50. 
D) $3.00. 
A) $0. 
B) $1.00. 
C) $2.50. 
D) $3.00.

Question 4

The following equations represent the demand and supply for bottles of nail polish.
Qᴰ = 25 - P
Qˢ = -15 + 3P
What is the equilibrium price (P)and quantity (Q - in thousands)of bottles of nail polish?

Accepted Answer

A) P = $5; Q = 20 thousand 
B) P = $15; Q = 30 thousand 
C) P = $20; Q = 5 thousand 
D) P = $10; Q = 15 thousand 
A) P = $5; Q = 20 thousand 
B) P = $15; Q = 30 thousand 
C) P = $20; Q = 5 thousand 
D) P = $10; Q = 15 thousand

Question 5

Figure 4-4
  
-Refer to Figure 4-4.The figure above represents the market for pecans.Assume that this is a competitive market.Which of the following is true?

Accepted Answer

A) If the price of pecans is $3 the output will be economically efficient but there will be a deadweight loss. 
B) If the price of pecans is $9 consumers will purchase more than the economically efficient output. 
C) Both 4,000 pounds and 12,000 pounds are economically inefficient rates of output. 
D) If the price of pecans is $3 producers will sell 12,000 pounds of pecans but this output will be economically inefficient. 
A) If the price of pecans is $3 the output will be economically efficient but there will be a deadweight loss. 
B) If the price of pecans is $9 consumers will purchase more than the economically efficient output. 
C) Both 4,000 pounds and 12,000 pounds are economically inefficient rates of output. 
D) If the price of pecans is $3 producers will sell 12,000 pounds of pecans but this output will be economically inefficient.

Question 6

Figure 4-7
  
-Refer to Figure 4-7 which shows the market for vitamins.Suppose the government imposes a price ceiling of Pᵥ.How will the price ceiling affect the quantity supplied, quantity demanded, and quantity exchanged?

Accepted Answer

The price ceiling will have no effect on

Question 7

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 price of cowboy hats increases from $38 to $46

Accepted Answer

A) consumers will buy no cowboy hats. 
B) the marginal cost of producing the third cowboy hat will increase to $46. 
C) producer surplus will rise from $22 to $46. 
D) there will be a surplus of cowboy hats. 
A) consumers will buy no cowboy hats. 
B) the marginal cost of producing the third cowboy hat will increase to $46. 
C) producer surplus will rise from $22 to $46. 
D) there will be a surplus of cowboy hats.

Question 8

Suppose that in Canada the government places a $1,500 tax on the buyers of new snowmobiles.After the purchase of a new snowmobile, a buyer must pay the government $1,500.How would the imposition of the tax on buyers be illustrated in a graph?

Accepted Answer

A) The tax will shift the supply curve to the left by $1,500. 
B) The tax will shift the demand curve to the right by $1,500. 
C) The tax will shift both the demand and supply curves to the right by $1,500. 
D) The tax will shift the demand curve to the left by $1,500. 
A) The tax will shift the supply curve to the left by $1,500. 
B) The tax will shift the demand curve to the right by $1,500. 
C) The tax will shift both the demand and supply curves to the right by $1,500. 
D) The tax will shift the demand curve to the left by $1,500.

Question 9

Frieda is at her local florist to buy a dozen roses.She is willing to pay $75 for the roses, and buys them for $75.Frieda's consumer surplus from the purchase is

Accepted Answer

A) $150. 
B) $75. 
C) $37.50. 
D) $0. 
A) $150. 
B) $75. 
C) $37.50. 
D) $0.

Question 10

In a competitive market the demand curve shows the ________ received by consumers and the supply curve shows the ________.

Accepted Answer

A) utility; average cost. 
B) marginal benefit; marginal cost 
C) economic surplus; opportunity cost 
D) net benefit; net cost 
A) utility; average cost. 
B) marginal benefit; marginal cost 
C) economic surplus; opportunity cost 
D) net benefit; net cost

Question 11

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, what changes in the market would result in an economically efficient output?

Accepted Answer

A) The price would increase, the quantity supplied would decrease, and the quantity demanded would increase. 
B) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase. 
C) The price would increase, the demand would decrease, and the supply would increase. 
D) The price would increase, the quantity demanded would decrease, and the quantity supplied would increase. 
A) The price would increase, the quantity supplied would decrease, and the quantity demanded would increase. 
B) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase. 
C) The price would increase, the demand would decrease, and the supply would increase. 
D) The price would increase, the quantity demanded would decrease, and the quantity supplied would increase.

Question 12

What is the difference between scarcity and a shortage?

Accepted Answer

Scarcity is a situation in which unlimit

Question 13

If the price of chewing gum is represented by P in equation P = 25 - 0.5 Qᴰ, then the corresponding quantity of chewing gum demanded is represented by the demand equation

Accepted Answer

A) Qᴰ = 2P - 0.5. 
B) Qᴰ = 0.5P + 25. 
C) Qᴰ = 50 -2P. 
D) Qᴰ = -5 + 10P. 
A) Qᴰ = 2P - 0.5. 
B) Qᴰ = 0.5P + 25. 
C) Qᴰ = 50 -2P. 
D) Qᴰ = -5 + 10P.

Question 14

Economic efficiency in a competitive market is achieved when

Accepted Answer

A) economic surplus is equal to consumer surplus. 
B) consumers and producers are satisfied. 
C) the marginal benefit equals the marginal cost from the last unit sold. 
D) producer surplus equals the total amount firms receive from consumers minus the cost of production. 
A) economic surplus is equal to consumer surplus. 
B) consumers and producers are satisfied. 
C) the marginal benefit equals the marginal cost from the last unit sold. 
D) producer surplus equals the total amount firms receive from consumers minus the cost of production.

Question 15

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 portion of producer surplus transferred to consumers as a result of the rent ceiling?

Accepted Answer

A) $40,000 
B) $100,000 
C) $125,000 
D) $140,000 
A) $40,000 
B) $100,000 
C) $125,000 
D) $140,000

Question 16

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 12,000 pounds

Accepted Answer

A) the marginal cost of pecans is greater than the marginal benefit; therefore, output is inefficiently low. 
B) producers should lower the price to $3 in order to sell the quantity demanded of 12,000. 
C) the marginal cost of pecans is greater than the marginal benefit; therefore, output is inefficiently high. 
D) the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently high. 
A) the marginal cost of pecans is greater than the marginal benefit; therefore, output is inefficiently low. 
B) producers should lower the price to $3 in order to sell the quantity demanded of 12,000. 
C) the marginal cost of pecans is greater than the marginal benefit; therefore, output is inefficiently high. 
D) the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently high.

Question 17

Assume the market price for lemon grass is $4.00 per pound, but most buyers are willing to pay more than the market price.At the market price of $4.00, the quantity of lemon grass demanded is 1,500 pounds per month, and quantity demanded does not reach zero until the price reaches $30.00 per pound.Construct a graph showing this data, calculate the total consumer surplus in the market for lemon grass, and show the consumer surplus on the graph.

Accepted Answer

@#IMG-DLM& The total consumer

Question 18

What is producer surplus? What does producer surplus measure?

Accepted Answer

Producer surplus is the difference betwe

Question 19

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 price of cowboy hats decreases from $38 to $30

Accepted Answer

A) consumer surplus will rise by $6. 
B) the marginal cost of producing the third cowboy hat will fall to $30. 
C) producer surplus will fall from $22 to $6. 
D) producer surplus will rise from $8 to $24. 
A) consumer surplus will rise by $6. 
B) the marginal cost of producing the third cowboy hat will fall to $30. 
C) producer surplus will fall from $22 to $6. 
D) producer surplus will rise from $8 to $24.

Question 20

Which of the following is not a consequence of minimum wage laws?

Accepted Answer

A) Low-skilled workers are hurt because minimum wage reduces the number of jobs providing low-skilled workers with training. 
B) Employers will be reluctant to offer low-skilled workers jobs with training. 
C) Producers have an incentive to offer workers non-wage benefits such as health care benefits and convenient working hours rather than a higher wage. 
D) Some workers benefit when the minimum wage is increased. 
A) Low-skilled workers are hurt because minimum wage reduces the number of jobs providing low-skilled workers with training. 
B) Employers will be reluctant to offer low-skilled workers jobs with training. 
C) Producers have an incentive to offer workers non-wage benefits such as health care benefits and convenient working hours rather than a higher wage. 
D) Some workers benefit when the minimum wage is increased.

Suppliers will be willing to supply a product only if

When Airbnb customers in Malibu start paying hotel taxes, this will have the potential to raise the equilibrium price in this market and, therefore, decrease efficiency.This would have a tendency to

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 fourth burrito is

The following equations represent the demand and supply for bottles of nail polish. Qᴰ = 25 - P Qˢ = -15 + 3P What is the equilibrium price (P)and quantity (Q - in thousands)of bottles of nail polish?

Figure 4-4 -Refer to Figure 4-4.The figure above represents the market for pecans.Assume that this is a competitive market.Which of the following is true?

Figure 4-7 -Refer to Figure 4-7 which shows the market for vitamins.Suppose the government imposes a price ceiling of Pᵥ.How will the price ceiling affect the quantity supplied, quantity demanded, and quantity exchanged?

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 price of cowboy hats increases from $38 to $46

Suppose that in Canada the government places a $1,500 tax on the buyers of new snowmobiles.After the purchase of a new snowmobile, a buyer must pay the government $1,500.How would the imposition of the tax on buyers be illustrated in a graph?

Frieda is at her local florist to buy a dozen roses.She is willing to pay $75 for the roses, and buys them for $75.Frieda's consumer surplus from the purchase is

In a competitive market the demand curve shows the received by consumers and the supply curve shows the .

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, what changes in the market would result in an economically efficient output?

What is the difference between scarcity and a shortage?

If the price of chewing gum is represented by P in equation P = 25 - 0.5 Qᴰ, then the corresponding quantity of chewing gum demanded is represented by the demand equation

Economic efficiency in a competitive market is achieved when

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 portion of producer surplus transferred to consumers as a result of the rent ceiling?

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 12,000 pounds

What is producer surplus? What does producer surplus measure?

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 price of cowboy hats decreases from $38 to $30

Which of the following is not a consequence of minimum wage laws?

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

Suppliers will be willing to supply a product only if

When Airbnb customers in Malibu start paying hotel taxes, this will have the potential to raise the equilibrium price in this market and, therefore, decrease efficiency.This would have a tendency to

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 fourth burrito is

The following equations represent the demand and supply for bottles of nail polish. Qᴰ = 25 - P Qˢ = -15 + 3P What is the equilibrium price (P)and quantity (Q - in thousands)of bottles of nail polish?

Figure 4-4 -Refer to Figure 4-4.The figure above represents the market for pecans.Assume that this is a competitive market.Which of the following is true?

Figure 4-7 -Refer to Figure 4-7 which shows the market for vitamins.Suppose the government imposes a price ceiling of Pᵥ.How will the price ceiling affect the quantity supplied, quantity demanded, and quantity exchanged?

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 price of cowboy hats increases from $38 to $46

Suppose that in Canada the government places a $1,500 tax on the buyers of new snowmobiles.After the purchase of a new snowmobile, a buyer must pay the government $1,500.How would the imposition of the tax on buyers be illustrated in a graph?

Frieda is at her local florist to buy a dozen roses.She is willing to pay $75 for the roses, and buys them for $75.Frieda's consumer surplus from the purchase is

In a competitive market the demand curve shows the ________ received by consumers and the supply curve shows the ________.

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, what changes in the market would result in an economically efficient output?

What is the difference between scarcity and a shortage?

If the price of chewing gum is represented by P in equation P = 25 - 0.5 Qᴰ, then the corresponding quantity of chewing gum demanded is represented by the demand equation

Economic efficiency in a competitive market is achieved when

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 portion of producer surplus transferred to consumers as a result of the rent ceiling?

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 12,000 pounds

What is producer surplus? What does producer surplus measure?

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 price of cowboy hats decreases from $38 to $30

Which of the following is not a consequence of minimum wage laws?

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

In a competitive market the demand curve shows the received by consumers and the supply curve shows the .