Exam 4: Market Efficiency and Market Failure

If you burn your trash in the backyard in spite of regulations against it,then you are

If policymakers use a pollution tax to control pollution,the tax per unit of pollution should be set

Table 4-8 Hourly Wage (dollars) Quantity of Labor Supplied Quantity of Labor Demanded \ 8.00 350,000 390,000 8.50 360,000 380,000 9.00 370,000 370,000 9.50 380,000 360,000 10.00 390,000 350,000 10.50 400,000 340,000 Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. -Refer to Table 4-8.If a minimum wage of $9.50 is mandated there will be a

Figure 4-2 -Refer to Figure 4-2.What area represents the increase in producer surplus when the market price rises from P₁ to P₂?

Economic efficiency is a market outcome in which the marginal benefit to consumers is equal to the marginal cost of production and the sum of consumer surplus and producer surplus is maximized.

When products that create positive externalities are produced,at the market equilibrium output,the social benefit generated by consuming the product exceeds the private benefit.

The social cost of cutting trees for firewood in a government forest is

Willingness to pay measures

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 second burrito is

Suppose a tax equal to the value of the marginal external cost at the optimal output is imposed on a pollution generating good.All of the following will result from the tax except

The sum of consumer surplus and producer surplus is called economic surplus.

Figure 4-8 Figure 4-8 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month. -Refer to Figure 4-8.Suppose that instead of a rent ceiling,the government imposed a price floor of $2,000 per month for apartments.What is the quantity of apartments demanded at the new price?

Table 4-8 Hourly Wage (dollars) Quantity of Labor Supplied Quantity of Labor Demanded \ 8.00 350,000 390,000 8.50 360,000 380,000 9.00 370,000 370,000 9.50 380,000 360,000 10.00 390,000 350,000 10.50 400,000 340,000 Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. -Refer to Table 4-8.If a minimum wage of $9.50 an hour is mandated,what is the quantity of labor supplied?

Which of the following criteria should be used to evaluate if government intervention in a market for the purpose of environmental protection is justified?

Table 4-5 Consumer Willingness to Pay Violet \ 48 Walter 40 Xavier 30 Yolanda 24 Zachary 14 -Refer to Table 4-5.The table above lists the highest prices five consumers are willing to pay for a concert ticket.If the price of one of the tickets is $36

The difference between the ________ and the ________ from the sale of a product is called producer surplus.

Table 4-6 Marko's Polos Marginal Cost (dollars) 1st shirt \ 7 2nd shirt 10 3rd shirt 15 4th shirt 20 -Refer to Table 4-6.The table above lists the marginal cost of polo shirts by Marko's,a firm that specializes in producing men's clothing.If the price of polo shirts increases from $15 to $20

Figure 4-15 Figure 4-15 shows a market with an externality. The current market equilibrium output of Q₁ is not the economically efficient output. The economically efficient output is Q₂. -Refer to Figure 4-15.If,because of an externality,the economically efficient output is Q₂ and not the current equilibrium output of Q₁,what does S₂ represent?

Marginal cost is

When a tax on output is imposed to internalize the external costs of pollution,the supply curve shifts down by the amount of the tax.