Exam 5: Economic Efficiency, Government Price Setting and Taxes

Suppose the demand curve for a product is horizontal and the supply curve is upward sloping.If a unit tax is imposed in the market for this product,

If the quantity of donuts supplied is represented by the equation Q_S = -15 + 5P, then the corresponding price of donuts is represented by the equation

Table 5.6 -Refer to Table 5.6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units.What is the value of economic surplus in this market?

Marginal benefit is equal to the ________ benefit a consumer receives from consuming one more unit of a good or service.

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 Arnold's consumer surplus?

Table 5.6 -Refer to Table 5.6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units.What is the value of producer surplus?

In order to be binding, a price ceiling

Figure 5.5 Figure 5.5 shows the market for apartments in Springfield.Recently, the government imposed a rent ceiling of $1000 per month. -Refer to Figure 5.5.The value of producer surplus after the imposition of the ceiling is

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.Suppose that the quantity of labour demanded increases by 40 000 at each wage level.What are the new free market equilibrium hourly wage and the new equilibrium quantity of labour?

Figure 5.10 -Refer to Figure 5.10.The figure above illustrates the markets for two goods, Good X and Good Y.Suppose an identical dollar tax is imposed in each market. a.Compare the consumer burden and producer burden in each market.Illustrate your answer graphically. b.If the goal of the government is to raise revenue with minimum impact to quantity consumed, in which market should the tax be imposed? c.If the goal of the government is to discourage consumption, in which market should the tax be imposed? __________________________________________________________________________________________________________________________________________________________________________________________

What is producer surplus? What does producer surplus measure? __________________________________________________________________________________________________________________________________________________________________________________________

Figure 5.7 Figure 5.7 shows the market for beer.The government plans to impose a unit tax in this market. -Refer to Figure 5.7.What is the size of the unit tax?

In cities with rent controls, the actual rents paid can be higher than the legal maximum.One explanation for this is

Which of the following statements is true?

Figure 5.2 -Refer to Figure 5.2.What area represents producer surplus at a price of P₂?

If equilibrium is achieved in a competitive market,

If marginal benefit is greater than marginal cost, output is inefficiently high.

Figure 5.1 Figure 5.1 shows Arnold's demand curve for burritos. -Refer to Figure 5.1.What is Arnold's benefit from consuming the fourth burrito?

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 $11.50 is mandated, there will be a

Which of the following is true in a competitive market equilibrium?