Exam 5: Economic Efficiency, Government Price Setting and Taxes

Figure 5.1 Figure 5.1 shows Arnold's demand curve for burritos. -Refer to Figure 5.1.If the market price is $1.00, the consumer surplus on the third burrito is

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

Table 5.3 -Refer to Table 5.3.The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specialises in producing fancy dress costumes.If the price of cowboy hats decreases from $38 to $30

What does a demand curve show?

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

The minimum wage is an example of a price ceiling.

Figure 5.1 Figure 5.1 shows Arnold's demand curve for burritos. -Refer to Figure 5.1.If the market price is $2.00, what is the consumer surplus on the first burrito?

The incidence of a tax depends on whether the government collects the tax from buyers or sellers.

What curve shows the marginal cost of producing one more unit of a good or service?

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

Will equilibrium in a market always result in an outcome that is economically efficient? Explain. __________________________________________________________________________________________________________________________________________________________________________________________

Which of the following is not a result of imposing a rent ceiling?

Table 5.7 -Refer to Table 5.7.The equations above describe the demand and supply for Bubba's Fried Jellybeans.The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units.What is the value of consumer surplus?

The payroll tax is a tax imposed on ________ that is used to fund Social Security and Medicare.

Table 5.4 Table 5-4 shows the demand and supply schedules for labour market in the city of Pixley. -Refer to Table 5.4.If a minimum wage of $12.50 is mandated, there will be a

What is a black market? __________________________________________________________________________________________________________________________________________________________________________________________

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

Table 5.7 -Refer to Table 5.7.The equations above describe the demand and supply for Bubba's Fried Jellybeans.The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units.What is the value of producer surplus?

What does willingness to pay measure?

Figure 5.3 Figure 5.3 shows the market for tiger shrimp.The market is initially in equilibrium at a price of $15 and a quantity of 80.Now suppose producers decide to cut output to 40 in order to raise the price to $18. -Refer to Figure 5.3.The value of consumer surplus at the equilibrium price of $18 is