Question 1

Tax incidence is the actual division of the

Accepted Answer

A)  burden of the tax between buyers and sellers in a market. 
B)  tax revenues between government agencies. 
C)  tax revenues between the federal government and state governments. 
D)  population into different tax brackets. 
A)  burden of the tax between buyers and sellers in a market. 
B)  tax revenues between government agencies. 
C)  tax revenues between the federal government and state governments. 
D)  population into different tax brackets.

Question 2

Figure 4-9
   
Figure 4-9 shows the market for cigarettes. The government plans to impose a unit tax in this market.
-Refer to Figure 4-9.For each unit sold,the price sellers receive after the tax (net of tax)is

Accepted Answer

A)  $12. 
B)  $8. 
C)  $4.40. 
D)  $3. 
A)  $12. 
B)  $8. 
C)  $4.40. 
D)  $3.

Question 3

Economists have shown that the burden of a tax is

Accepted Answer

A)  greater on the buyer when the tax is collected from the buyer. 
B)  greater on the seller when the tax is collected from the seller. 
C)  greater on the buyer when the tax is collected from the seller and greater on the seller when the tax is collected from the buyer. 
D)  the same whether the tax is collected from the buyer or the seller. 
A)  greater on the buyer when the tax is collected from the buyer. 
B)  greater on the seller when the tax is collected from the seller. 
C)  greater on the buyer when the tax is collected from the seller and greater on the seller when the tax is collected from the buyer. 
D)  the same whether the tax is collected from the buyer or the seller.

Question 4

There will be no deadweight loss if the marginal benefit to consumers is equal to the marginal cost of production and the sum of consumer surplus and producer surplus is maximized.

Accepted Answer

A) True 
 B)False

Question 5

Figure 4-1
   
Figure 4-1 shows Kendra's demand for ice-cream cones curve.
-Refer to Figure 4-1. If the market price is $2.50,what is the consumer surplus on the second ice cream cone?

Accepted Answer

A)  $0.50 
B)  $1.50 
C)  $3.00 
D)  $10.50 
A)  $0.50 
B)  $1.50 
C)  $3.00 
D)  $10.50

Question 6

The graph below represents the market for alfalfa.The market price is $7.00 per bushel.Identify the areas representing consumer surplus,producer surplus,and economic surplus.

Accepted Answer

Consumer surplus is represente

Question 7

Government intervention in agriculture began in the Untied States in the 1930s.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements is not true?

Accepted Answer

A)  Consumer surplus measures the difference between the highest price a consumer is willing to pay for a product and the price she actually pays. 
B)  Marginal benefit is the additional benefit to a consumer from consuming one more unit of a product. 
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 difference between the highest price a consumer is willing to pay for a product and the price she actually pays. 
B)  Marginal benefit is the additional benefit to a consumer from consuming one more unit of a product. 
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 9

Figure 4-6
   
Figure 4-6 shows the demand and supply curves for the coffee market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at $7.00.
-Refer to Figure 4-6.What is the value of the deadweight loss after the imposition of the price floor?

Accepted Answer

A)  $600 
B)  $1,800 
C)  $2,700 
D)  $3,300 
A)  $600 
B)  $1,800 
C)  $2,700 
D)  $3,300

Question 10

Suppose an excise tax of $0.75 is imposed on every pack of cigarettes 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 cigarettes would shift to the left by $0.75. 
B)  The supply curve for cigarettes would shift to the left by less than $0.75. 
C)  The supply curve for cigarettes would shift to the left by more than $0.75. 
D)  The supply curve for cigarettes would shift to the right by $0.75. 
A)  The supply curve for cigarettes would shift to the left by $0.75. 
B)  The supply curve for cigarettes would shift to the left by less than $0.75. 
C)  The supply curve for cigarettes would shift to the left by more than $0.75. 
D)  The supply curve for cigarettes would shift to the right by $0.75.

Question 11

Figure 4-11
  
-Refer to Figure 4-11. Suppose the market is initially in equilibrium at price P₁ and then the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax?

Accepted Answer

A)  The consumer will bear a greater share of the tax burden if the demand curve is D₁. 
B)  The consumer's share of the tax burden is the same whether the demand curve is D₁ or D₂. 
C)  The consumer will bear a greater share of the tax burden if the demand curve is D₂. 
D)  The consumer will bear the entire burden of the tax if the demand curve is D₁ and the producer will bear the entire burden of the tax if the demand curve is D₂. 
A)  The consumer will bear a greater share of the tax burden if the demand curve is D₁. 
B)  The consumer's share of the tax burden is the same whether the demand curve is D₁ or D₂. 
C)  The consumer will bear a greater share of the tax burden if the demand curve is D₂. 
D)  The consumer will bear the entire burden of the tax if the demand curve is D₁ and the producer will bear the entire burden of the tax if the demand curve is D₂.

Question 12

The following equations represent the demand and supply for bird feeders.
QD = 35 - P
QS = -5 + 3P
What is the equilibrium price (P)and quantity (Q - in thousands)of bird feeders?

Accepted Answer

A)  P = $10; Q = 25 thousand 
B)  P = $35; Q = 20 thousand 
C)  P = $20; Q = 20 thousand 
D)  P = $5; Q = 30 thousand 
A)  P = $10; Q = 25 thousand 
B)  P = $35; Q = 20 thousand 
C)  P = $20; Q = 20 thousand 
D)  P = $5; Q = 30 thousand

Question 13

Equilibrium in a competitive market results in the greatest amount of economic surplus from the production of a good or service.

Accepted Answer

A) True 
 B)False

Question 14

In a competitive market equilibrium the ________ equals the ________ of the last unit sold.

Accepted Answer

A)  total profit; marginal benefit 
B)  total cost; marginal cost 
C)  profit; selling price 
D)  marginal benefit; marginal cost 
A)  total profit; marginal benefit 
B)  total cost; marginal cost 
C)  profit; selling price 
D)  marginal benefit; marginal cost

Question 15

Figure 4-5
   
Figure 4-5 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R₀.
-Refer to Figure 4-5. What area represents the deadweight loss after the imposition of the ceiling?

Accepted Answer

A)  G + H 
B)  J + H 
C)  C + E + J + H 
D)  C + E 
A)  G + H 
B)  J + H 
C)  C + E + J + H 
D)  C + E

Question 16

There is a shortage of every good that is scarce.

Accepted Answer

A) True 
 B)False

Question 17

Juanita goes to the Hardware Emporium to buy a new circular saw. She is willing to pay $120 for a new saw,but buys one on sale for $85. Juanita's consumer surplus from the purchase is

Accepted Answer

A)  $35. 
B)  $85. 
C)  $120. 
D)  $205. 
A)  $35. 
B)  $85. 
C)  $120. 
D)  $205.

Question 18

If the price of garlic is represented by equation P = 25 - QD,then the corresponding quantity of garlic demanded is represented by the equation

Accepted Answer

A)  QD = P - 25. 
B)  QD = P + 25. 
C)  QD = 25 - P. 
D)  QD = -25 + P. 
A)  QD = P - 25. 
B)  QD = P + 25. 
C)  QD = 25 - P. 
D)  QD = -25 + P.

Question 19

Figure 4-5
   
Figure 4-5 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R₀.
-Refer to Figure 4-5. What is the area that represents the portion of producer surplus transferred to consumers as a result of the rent ceiling?

Accepted Answer

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

Question 20

When the marginal benefit equals the marginal cost of the last unit sold in a competitive market

Accepted Answer

A)  the net benefit of consumers is equal to the net benefit of producers. 
B)  an economically efficient level of output is produced. 
C)  producer surplus is equal to consumer surplus. 
D)  total benefit is equal to total cost. 
A)  the net benefit of consumers is equal to the net benefit of producers. 
B)  an economically efficient level of output is produced. 
C)  producer surplus is equal to consumer surplus. 
D)  total benefit is equal to total cost.

Tax incidence is the actual division of the

Figure 4-9 Figure 4-9 shows the market for cigarettes. The government plans to impose a unit tax in this market. -Refer to Figure 4-9.For each unit sold,the price sellers receive after the tax (net of tax)is

Economists have shown that the burden of a tax is

There will be no deadweight loss if the marginal benefit to consumers is equal to the marginal cost of production and the sum of consumer surplus and producer surplus is maximized.

Figure 4-1 Figure 4-1 shows Kendra's demand for ice-cream cones curve. -Refer to Figure 4-1. If the market price is $2.50,what is the consumer surplus on the second ice cream cone?

The graph below represents the market for alfalfa.The market price is $7.00 per bushel.Identify the areas representing consumer surplus,producer surplus,and economic surplus.

Government intervention in agriculture began in the Untied States in the 1930s.

Which of the following statements is not true?

Suppose an excise tax of $0.75 is imposed on every pack of cigarettes sold and sellers are responsible for paying this tax.How would the imposition of the tax be illustrated in a graph?

Figure 4-11 -Refer to Figure 4-11. Suppose the market is initially in equilibrium at price P₁ and then the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax?

The following equations represent the demand and supply for bird feeders. QD = 35 - P QS = -5 + 3P What is the equilibrium price (P)and quantity (Q - in thousands)of bird feeders?

Equilibrium in a competitive market results in the greatest amount of economic surplus from the production of a good or service.

In a competitive market equilibrium the equals the of the last unit sold.

Figure 4-5 Figure 4-5 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R₀. -Refer to Figure 4-5. What area represents the deadweight loss after the imposition of the ceiling?

There is a shortage of every good that is scarce.

Juanita goes to the Hardware Emporium to buy a new circular saw. She is willing to pay $120 for a new saw,but buys one on sale for $85. Juanita's consumer surplus from the purchase is

If the price of garlic is represented by equation P = 25 - QD,then the corresponding quantity of garlic demanded is represented by the equation

Figure 4-5 Figure 4-5 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R₀. -Refer to Figure 4-5. What is the area that represents the portion of producer surplus transferred to consumers as a result of the rent ceiling?

When the marginal benefit equals the marginal cost of the last unit sold in a competitive market

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

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

Tax incidence is the actual division of the

Figure 4-9 Figure 4-9 shows the market for cigarettes. The government plans to impose a unit tax in this market. -Refer to Figure 4-9.For each unit sold,the price sellers receive after the tax (net of tax)is

Economists have shown that the burden of a tax is

There will be no deadweight loss if the marginal benefit to consumers is equal to the marginal cost of production and the sum of consumer surplus and producer surplus is maximized.

Figure 4-1 Figure 4-1 shows Kendra's demand for ice-cream cones curve. -Refer to Figure 4-1. If the market price is $2.50,what is the consumer surplus on the second ice cream cone?

The graph below represents the market for alfalfa.The market price is $7.00 per bushel.Identify the areas representing consumer surplus,producer surplus,and economic surplus.

Government intervention in agriculture began in the Untied States in the 1930s.

Which of the following statements is not true?

Suppose an excise tax of $0.75 is imposed on every pack of cigarettes sold and sellers are responsible for paying this tax.How would the imposition of the tax be illustrated in a graph?

Figure 4-11 -Refer to Figure 4-11. Suppose the market is initially in equilibrium at price P₁ and then the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax?

The following equations represent the demand and supply for bird feeders. QD = 35 - P QS = -5 + 3P What is the equilibrium price (P)and quantity (Q - in thousands)of bird feeders?

Equilibrium in a competitive market results in the greatest amount of economic surplus from the production of a good or service.

In a competitive market equilibrium the ________ equals the ________ of the last unit sold.

Figure 4-5 Figure 4-5 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R₀. -Refer to Figure 4-5. What area represents the deadweight loss after the imposition of the ceiling?

There is a shortage of every good that is scarce.

Juanita goes to the Hardware Emporium to buy a new circular saw. She is willing to pay $120 for a new saw,but buys one on sale for $85. Juanita's consumer surplus from the purchase is

If the price of garlic is represented by equation P = 25 - QD,then the corresponding quantity of garlic demanded is represented by the equation

Figure 4-5 Figure 4-5 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R₀. -Refer to Figure 4-5. What is the area that represents the portion of producer surplus transferred to consumers as a result of the rent ceiling?

When the marginal benefit equals the marginal cost of the last unit sold in a competitive market

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

In a competitive market equilibrium the equals the of the last unit sold.