Question 1

The area above the market supply curve and below the market price is equal to the

Accepted Answer

A)  consumer surplus. 
B)  producer surplus. 
C)  marginal benefit. 
D)  marginal cost. 
A)  consumer surplus. 
B)  producer surplus. 
C)  marginal benefit. 
D)  marginal cost.

Question 2

Table 4-3
   
Table 4-3 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-3.If a minimum wage of $9.50 an hour is mandated,what is the quantity of labor demanded?

Accepted Answer

A)  380,000 
B)  370,000 
C)  360,000 
D)  10,000 
A)  380,000 
B)  370,000 
C)  360,000 
D)  10,000

Question 3

Figure 4-1
   
Figure 4-1 shows Kendra's demand for ice-cream cones curve.
-The difference between the lowest price a firm would have been willing to accept and the price it actually receives from the sale of a product is called

Accepted Answer

A)  producer surplus. 
B)  profit. 
C)  marginal revenue. 
D)  price differential. 
A)  producer surplus. 
B)  profit. 
C)  marginal revenue. 
D)  price differential.

Question 4

The maximum price that a buyer is willing to pay for a good measures his

Accepted Answer

A)  consumer surplus. 
B)  marginal benefit. 
C)  willingness to pay. 
D)  producer surplus. 
A)  consumer surplus. 
B)  marginal benefit. 
C)  willingness to pay. 
D)  producer surplus.

Question 5

When ________ in a market,the total net benefit to society is maximized.

Accepted Answer

A)  deadweight loss is maximized 
B)  a competitive equilibrium is achieved 
C)  consumer surplus is minimized 
D)  producer surplus is minimized 
A)  deadweight loss is maximized 
B)  a competitive equilibrium is achieved 
C)  consumer surplus is minimized 
D)  producer surplus is minimized

Question 6

The willingness of consumers to buy a product at different prices is shown on a

Accepted Answer

A)  demand curve. 
B)  supply curve. 
C)  production possibilities frontier. 
D)  marginal cost curve. 
A)  demand curve. 
B)  supply curve. 
C)  production possibilities frontier. 
D)  marginal cost curve.

Question 7

The sum of consumer surplus and producer surplus is equal to

Accepted Answer

A)  the deadweight loss. 
B)  the economic surplus. 
C)  zero. 
D)  total profit. 
A)  the deadweight loss. 
B)  the economic surplus. 
C)  zero. 
D)  total profit.

Question 8

FICA is a payroll tax imposed on employers and workers that is used to fund Social Security and Medicare. Which of the following statements regarding the tax is true?

Accepted Answer

A)  Employers are required to pay a greater share of the tax than workers but most economists believe the burden of the tax is shared equally. 
B)  Congress wanted the burden of the tax to be greater for employers than for workers. 
C)  Most economists believe the burden of the tax falls almost entirely on workers. 
D)  Most economists believe the burden of the tax falls mostly on employers. 
A)  Employers are required to pay a greater share of the tax than workers but most economists believe the burden of the tax is shared equally. 
B)  Congress wanted the burden of the tax to be greater for employers than for workers. 
C)  Most economists believe the burden of the tax falls almost entirely on workers. 
D)  Most economists believe the burden of the tax falls mostly on employers.

Question 9

A tax is imposed on employers and workers that are used to fund Social Security and Medicare. This tax is sometimes referred to as

Accepted Answer

A)  the Income Security Tax. 
B)  the federal income tax. 
C)  the ACIF. 
D)  the payroll tax. 
A)  the Income Security Tax. 
B)  the federal income tax. 
C)  the ACIF. 
D)  the payroll tax.

Question 10

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

Accepted Answer

A)  If the price of iced tea is $3 the output will be economically efficient but there will be a deadweight loss. 
B)  If the price of iced tea is $3 consumers will purchase more than the economically efficient output. 
C)  Both 10,000 and 30,000 are economically inefficient rates of output. 
D)  If the price of iced tea is $3 producers will sell 30,000 units of iced tea but this output will be economically inefficient. 
A)  If the price of iced tea is $3 the output will be economically efficient but there will be a deadweight loss. 
B)  If the price of iced tea is $3 consumers will purchase more than the economically efficient output. 
C)  Both 10,000 and 30,000 are economically inefficient rates of output. 
D)  If the price of iced tea is $3 producers will sell 30,000 units of iced tea but this output will be economically inefficient.

Question 11

The additional benefit to a consumer from consuming one more unit of a good or service

Accepted Answer

A)  is equal to consumer surplus. 
B)  is equal to the opportunity cost of consuming the good or service. 
C)  is equal to marginal benefit. 
D)  is equal to economic surplus. 
A)  is equal to consumer surplus. 
B)  is equal to the opportunity cost of consuming the good or service. 
C)  is equal to marginal benefit. 
D)  is equal to economic surplus.

Question 12

Increases in the minimum wage are intended to raise the incomes of low-income workers.Many economists favor a different policy to achieve this goal,a policy that avoids the deadweight losses that result from the minimum wage. What is this policy?

Accepted Answer

A)  distribution of food stamps to low-income consumers 
B)  distribution of vouchers that can be used for rent or mortgage payments 
C)  the Alternative Minimum Tax 
D)  the earned income tax credit 
A)  distribution of food stamps to low-income consumers 
B)  distribution of vouchers that can be used for rent or mortgage payments 
C)  the Alternative Minimum Tax 
D)  the earned income tax credit

Question 13

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

Accepted Answer

A)  minimum cost. 
B)  total cost. 
C)  opportunity cost. 
D)  marginal cost. 
A)  minimum cost. 
B)  total cost. 
C)  opportunity cost. 
D)  marginal cost.

Question 14

Figure 4-4
  
-Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $3,what changes in the market would result in an economically efficient output?

Accepted Answer

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

Question 15

Table 4-5
  
-Refer to Table 4-5. The equations above describe the demand and supply for Aunt Maud's Premium Hand Lotion. The equilibrium price and quantity for Aunt Maud's lotion are $20 and 30 thousand units. What is the value of producer surplus?

Accepted Answer

A)  $600 thousand 
B)  $300 thousand 
C)  $150 thousand 
D)  $30 thousand 
A)  $600 thousand 
B)  $300 thousand 
C)  $150 thousand 
D)  $30 thousand

Question 16

Is there a difference between the "true burden" of a tax and who is legally required to pay a tax? Briefly explain.

Accepted Answer

There is a difference.The true burden of

Question 17

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

Accepted Answer

The price floor will have no effect on t

Question 18

Figure 4-1
   
Figure 4-1 shows Kendra's demand for ice-cream cones curve.
-Refer to Figure 4-1. What is the total amount that Kendra is willing to pay for 3 ice cream cones?

Accepted Answer

A)  $2.50 
B)  $7.50 
C)  $9.00 
D)  $13.50 
A)  $2.50 
B)  $7.50 
C)  $9.00 
D)  $13.50

Question 19

For most goods and services,the burden of a tax is on the sellers.

Accepted Answer

A) True 
 B)False

Question 20

The market price for coffee is $2.25 per cup.Austin is willing to pay $5.00 per cup,Colin is willing to pay $4.00 per cup,Lucy is willing to pay $3.00 per cup,and Ike is willing to pay $2.00 per cup.Construct a graph showing the consumer surplus for each cup of coffee purchased.How many cups of coffee will be purchased? What is the value of the consumer surplus each of the four consumers receives from their coffee purchases?

Accepted Answer

@#IMG-DLM& 3 cups of coffee will be purchased.Aust

The area above the market supply curve and below the market price is equal to the

Table 4-3 Table 4-3 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. -Refer to Table 4-3.If a minimum wage of $9.50 an hour is mandated,what is the quantity of labor demanded?

Figure 4-1 Figure 4-1 shows Kendra's demand for ice-cream cones curve. -The difference between the lowest price a firm would have been willing to accept and the price it actually receives from the sale of a product is called

The maximum price that a buyer is willing to pay for a good measures his

When ________ in a market,the total net benefit to society is maximized.

The willingness of consumers to buy a product at different prices is shown on a

The sum of consumer surplus and producer surplus is equal to

FICA is a payroll tax imposed on employers and workers that is used to fund Social Security and Medicare. Which of the following statements regarding the tax is true?

A tax is imposed on employers and workers that are used to fund Social Security and Medicare. This tax is sometimes referred to as

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

The additional benefit to a consumer from consuming one more unit of a good or service

Increases in the minimum wage are intended to raise the incomes of low-income workers.Many economists favor a different policy to achieve this goal,a policy that avoids the deadweight losses that result from the minimum wage. What is this policy?

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

Figure 4-4 -Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $3,what changes in the market would result in an economically efficient output?

Table 4-5 -Refer to Table 4-5. The equations above describe the demand and supply for Aunt Maud's Premium Hand Lotion. The equilibrium price and quantity for Aunt Maud's lotion are $20 and 30 thousand units. What is the value of producer surplus?

Is there a difference between the "true burden" of a tax and who is legally required to pay a tax? Briefly explain.

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

Figure 4-1 Figure 4-1 shows Kendra's demand for ice-cream cones curve. -Refer to Figure 4-1. What is the total amount that Kendra is willing to pay for 3 ice cream cones?

For most goods and services,the burden of a tax is on the sellers.

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

The area above the market supply curve and below the market price is equal to the

Table 4-3 Table 4-3 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. -Refer to Table 4-3.If a minimum wage of $9.50 an hour is mandated,what is the quantity of labor demanded?

Figure 4-1 Figure 4-1 shows Kendra's demand for ice-cream cones curve. -The difference between the lowest price a firm would have been willing to accept and the price it actually receives from the sale of a product is called

The maximum price that a buyer is willing to pay for a good measures his

When ________ in a market,the total net benefit to society is maximized.

The willingness of consumers to buy a product at different prices is shown on a

The sum of consumer surplus and producer surplus is equal to

FICA is a payroll tax imposed on employers and workers that is used to fund Social Security and Medicare. Which of the following statements regarding the tax is true?

A tax is imposed on employers and workers that are used to fund Social Security and Medicare. This tax is sometimes referred to as

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

The additional benefit to a consumer from consuming one more unit of a good or service

Increases in the minimum wage are intended to raise the incomes of low-income workers.Many economists favor a different policy to achieve this goal,a policy that avoids the deadweight losses that result from the minimum wage. What is this policy?

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

Figure 4-4 -Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $3,what changes in the market would result in an economically efficient output?

Table 4-5 -Refer to Table 4-5. The equations above describe the demand and supply for Aunt Maud's Premium Hand Lotion. The equilibrium price and quantity for Aunt Maud's lotion are $20 and 30 thousand units. What is the value of producer surplus?

Is there a difference between the "true burden" of a tax and who is legally required to pay a tax? Briefly explain.

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

Figure 4-1 Figure 4-1 shows Kendra's demand for ice-cream cones curve. -Refer to Figure 4-1. What is the total amount that Kendra is willing to pay for 3 ice cream cones?

For most goods and services,the burden of a tax is on the sellers.

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