Exam 5: Economic Efficiency, Government Price Setting and Taxes

Table 5.1 -Refer to Table 5.1.The table above lists the highest prices three consumers, Tom, Dick and Harriet, are willing to pay for a short-sleeved polo shirt.If the price of one of the shirts is $28 dollars,

Figure 5.1 Figure 5.1 shows Arnold's demand curve for burritos. -Refer to Figure 5.1.If the market price is $1.50, what is the consumer surplus on the second burrito?

Figure 5.1 Figure 5.1 shows Arnold's demand curve for burritos. -Refer to Figure 5.1.What is the total amount that Arnold is willing to pay for 3 burritos?

What is the difference between the highest price a consumer is willing to pay for a good and the price the consumer actually pays?

Table 5.7 -Refer to Table 5.7.The equations above describe the demand and supply for Bubba's Fried Jellybeans.What are the equilibrium price and quantity (in thousands)for Bubba's Fried Jellybeans?

Consumer surplus is the difference between the highest price someone is willing to pay for a product and the price he actually pays for the product.

If the quantity of soccer balls demanded is represented by the equation Q_D = 80 - 2P, then the corresponding price of soccer balls is represented by the equation

You are given the following market data for Venus automobiles in Saturnia. Demand: P = 200 - 0.25Q Supply: P = 130 + 0.10Q where P = Price and Q = Quantity. a.Calculate the equilibrium price and quantity. b.Calculate the consumer surplus in this market. c.Calculate the producer surplus in this market. __________________________________________________________________________________________________________________________________________________________________________________________

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

When is economic efficiency achieved in a competitive market?

Table 5.2 -Refer to Table 5.2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one ticket falls from $25 to $10,

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.The price buyers pay after the tax is

When the government taxes a good or service, it

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.With rent control, the quantity supplied is 200 apartments.Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get.What is the highest rent they can get per month?

Table 5.6 -Refer to Table 5.6.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.What are the equilibrium price and quantity (in thousands)for Chef Ernie's sushi?

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 consumer surplus?

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 producer surplus at the equilibrium price of $15 is

Consumers are willing to purchase a product up to the point where

What is the difference between scarcity and a shortage? __________________________________________________________________________________________________________________________________________________________________________________________

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 the deadweight loss at a price of $18 is