Exam 4: Market Efficiency and Market Failure

In the economic sense,almost everything is scarce.________ of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price.

Which of the following describes how a positive externality affects a competitive market?

Economists are reluctant to state that price controls are desirable or undesirable because

An externality is an example of a market failure.

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

Table 4-4 Consumer Willingness to Pay Curly \ 50 Moe 30 Larry 15 -Refer to Table 4-4.The table above lists the highest prices three consumers,Curly,Moe,and Larry,are willing to pay for a bottle of champagne.If the price of the champagne falls from $24 to $14

Table 4-7 Hourly Wage (dollars) Quantity of Labor Supplied Quantity of Labor Demanded \ 7.50 530,000 650,000 8.50 550,000 630,000 9.50 570,000 610,000 10.50 590,000 590,000 11.50 610,000 570,000 12.50 630,000 550,000 Table 4-7 shows the demand and supply schedules for the labor market in the city of Pixley. -Refer to Table 4-7.Suppose that the quantity of labor supplied increases by 40,000 at each wage level.What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?

Figure 4-25 Figure 4-25 illustrates the market for gasoline before the government imposes a tax to bring about the efficient level of gasoline production. -Refer to Figure 4-25.If the government wanted to bring about the efficient level of gasoline production by imposing a tax,the amount of the gasoline tax would be ________ per gallon.

Monique buys a new television for $795.She receives consumer surplus of $355 from the purchase.How much does Monique value her television?

Government intervention in agricultural markets in the U.S.began in the

Figure 4-9 Figure 4-9 shows the demand and supply curves for the almond market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at Pf. -Refer to Figure 4-9.What area represents consumer surplus after the imposition of the price floor?

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

Figure 4-18 Suppose there are several paper mills producing paper for a market. These mills, located upstream from a fishing village, discharge a large amount of wastewater into the river. The waste material affects the number of fish in the river and the use of the river for recreation and as a public water supply source. Figure 4-18 shows the paper market. Use this Figure to answer the following question(s). -Refer to Figure 4-18.Why is there a deadweight loss?

The total amount of producer surplus in a market is equal to the area above the market supply curve and below the market price.

Figure 4-2 -Refer to Figure 4-2.What area represents producer surplus at a price of P₁?

Explain how both renters and landlords could be either winners or losers with the imposition of rent control.

If there are no externalities,a competitive market achieves economic efficiency.If there is a negative externality,economic efficiency will not be achieved because

Economists working for Uber,along with economists from the University of Oxford and the University of Chicago,estimated the consumer surplus attributed to Uber.For the entire United States,these economists estimated that the total consumer surplus from Uber in 2015 was

Rent control is an example of

Table 4-4 Consumer Willingness to Pay Curly \ 50 Moe 30 Larry 15 -Refer to Table 4-4.The table above lists the highest prices three consumers,Curly,Moe,and Larry,are willing to pay for a bottle of champagne.If the price of one of the bottles is $95 dollars,total consumer surplus will be