Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 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 of the tickets is $10,

Accepted Answer

A)  everyone will buy a ticket except for Esther. 
B)  only Anya and Basil will buy tickets. 
C)  Celeste's consumer surplus is $25. 
D)  the total consumer surplus from the purchase of tickets will be $61. 
A)  everyone will buy a ticket except for Esther. 
B)  only Anya and Basil will buy tickets. 
C)  Celeste's consumer surplus is $25. 
D)  the total consumer surplus from the purchase of tickets will be $61. A

Question 3

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,

Accepted Answer

A)  sellers bear the entire burden of the tax. 
B)  the tax burden will be shared among the government, buyers and sellers. 
C)  buyers bear the entire burden of the tax. 
D)  the tax burden will be shared by buyers and sellers. 
A)  sellers bear the entire burden of the tax. 
B)  the tax burden will be shared among the government, buyers and sellers. 
C)  buyers bear the entire burden of the tax. 
D)  the tax burden will be shared by buyers and sellers. A

Question 4

-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,

Accepted Answer

A)  Tom will buy two shirts, Dick will buy one shirt and Harriet will buy no shirts. 
B)  Tom will receive $12 of consumer surplus from buying one shirt. 
C)  Tom and Dick receive a total of $70 of consumer surplus from buying one shirt each. Harriet will buy no shirts. 
D)  Harriet will receive $25 of consumer surplus since she will buy no shirts. 
A)  Tom will buy two shirts, Dick will buy one shirt and Harriet will buy no shirts. 
B)  Tom will receive $12 of consumer surplus from buying one shirt. 
C)  Tom and Dick receive a total of $70 of consumer surplus from buying one shirt each. Harriet will buy no shirts. 
D)  Harriet will receive $25 of consumer surplus since she will buy no shirts.

Question 5

Using a supply and demand graph, illustrate the effect of the addition of a $10.00 unit tax on digital cameras, where the entire tax burden falls on the seller. Assume the equilibrium price before the tax is $125 and the equilibrium quantity is 50 000. What happens to the price and quantity after the tax is implemented?

Accepted Answer

@#IMG-DLM& Price doe

Question 6

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.

Accepted Answer

a. Price = $150; Qua

Question 7

Willingness to pay measures

Accepted Answer

A)  the maximum price a buyer is willing to pay for a product minus the amount the buyer actually pays for it. 
B)  the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept for the good. 
C)  the maximum price that a buyer is willing to pay for a good. 
D)  the maximum price a buyer is willing to pay minus the minimum price a seller is willing to accept. 
A)  the maximum price a buyer is willing to pay for a product minus the amount the buyer actually pays for it. 
B)  the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept for the good. 
C)  the maximum price that a buyer is willing to pay for a good. 
D)  the maximum price a buyer is willing to pay minus the minimum price a seller is willing to accept.

Question 8

If the quantity of sunglasses supplied is represented by the equation QS = -60 + 4P, then the corresponding price of sunglasses is represented by the equation

Accepted Answer

A)  P = 0.25QS + 15. 
B)  P = 15QS + 240. 
C)  P = QS - 7.5. 
D)  P = 12 - 0.4QS. 
A)  P = 0.25QS + 15. 
B)  P = 15QS + 240. 
C)  P = QS - 7.5. 
D)  P = 12 - 0.4QS.

Question 9

If the market price is at equilibrium, the producer surplus is minimised.

Accepted Answer

A) True 
 B)False

Question 10

Economic efficiency in a competitive market is achieved when

Accepted Answer

A)  economic surplus is equal to consumer surplus. 
B)  consumers and producers are satisfied. 
C)  the marginal benefit equals the marginal cost from the last unit sold. 
D)  producer surplus equals the total amount firms receive from consumers minus the cost of production. 
A)  economic surplus is equal to consumer surplus. 
B)  consumers and producers are satisfied. 
C)  the marginal benefit equals the marginal cost from the last unit sold. 
D)  producer surplus equals the total amount firms receive from consumers minus the cost of production.

Question 11

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

Accepted Answer

A)  P = 1.6QD + 80. 
B)  P = 80 - QD. 
C)  P = 40 - 0.5QD. 
D)  P = QD + 160. 
A)  P = 1.6QD + 80. 
B)  P = 80 - QD. 
C)  P = 40 - 0.5QD. 
D)  P = QD + 160.

Question 12

The government proposes a tax on imported champagne. Buyers will bear the entire burden of the tax if the

Accepted Answer

A)  supply curve for imported champagne is vertical. 
B)  demand curve for imported champagne is vertical. 
C)  demand curve for imported champagne is horizontal. 
D)  demand curve is downward sloping and the supply curve is upward sloping. 
A)  supply curve for imported champagne is vertical. 
B)  demand curve for imported champagne is vertical. 
C)  demand curve for imported champagne is horizontal. 
D)  demand curve is downward sloping and the supply curve is upward sloping.

Question 13

If the price of hairspray is represented by equation P = 10 - 0.2 QD, then the corresponding quantity of hairspray demanded is represented by the equation

Accepted Answer

A)  QD = 5P - 2.  
B)  QD = 0.5P + 2.  
C)  QD = 50 -5P.  
D)  QD = -10 + 0.2P. 
A)  QD = 5P - 2.  
B)  QD = 0.5P + 2.  
C)  QD = 50 -5P.  
D)  QD = -10 + 0.2P.

Question 14

-Refer to Figure 5-1. If the market price is $1.50, what is Arnold's consumer surplus?

Accepted Answer

A)  $1.50 
B)  $2.25 
C)  $3.00 
D)  $4.75 
A)  $1.50 
B)  $2.25 
C)  $3.00 
D)  $4.75

Question 15

-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 increases from $38 to $46,

Accepted Answer

A)  consumers will buy no cowboy hats. 
B)  the marginal cost of producing the third cowboy hat will increase to $46. 
C)  producer surplus will rise from $22 to $46. 
D)  there will be a surplus of cowboy hats. 
A)  consumers will buy no cowboy hats. 
B)  the marginal cost of producing the third cowboy hat will increase to $46. 
C)  producer surplus will rise from $22 to $46. 
D)  there will be a surplus of cowboy hats.

Question 16

-Refer to Figure 5-1. If the market price is $1.00, what is the consumer surplus on the fourth burrito?

Accepted Answer

A)  $0 
B)  $0.50 
C)  $1.50 
D)  $2.25 
A)  $0 
B)  $0.50 
C)  $1.50 
D)  $2.25

Question 17

What is producer surplus? What does producer surplus measure?

Accepted Answer

Producer surplus is the difference betwe

Question 18

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

Accepted Answer

An economically efficient outcome means

Question 19

-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

Accepted Answer

A)  consumer surplus will rise by $6. 
B)  the marginal cost of producing the third cowboy hat will fall to $30. 
C)  producer surplus will fall from $22 to $6. 
D)  producer surplus will rise from $8 to $24. 
A)  consumer surplus will rise by $6. 
B)  the marginal cost of producing the third cowboy hat will fall to $30. 
C)  producer surplus will fall from $22 to $6. 
D)  producer surplus will rise from $8 to $24.

Question 20

-Refer to Figure 5-3. What is the value of consumer surplus at the equilibrium price of $15?

Accepted Answer

A)  $60 
B)  $120 
C)  $180 
D)  $240 
A)  $60 
B)  $120 
C)  $180 
D)  $240

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

-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 of the tickets is $10,

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,

-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,

Willingness to pay measures

If the quantity of sunglasses supplied is represented by the equation Q_S = -60 + 4P, then the corresponding price of sunglasses is represented by the equation

If the market price is at equilibrium, the producer surplus is minimised.

Economic efficiency in a competitive market is achieved when

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

The government proposes a tax on imported champagne. Buyers will bear the entire burden of the tax if the

If the price of hairspray is represented by equation P = 10 - 0.2 Q_D, then the corresponding quantity of hairspray demanded is represented by the equation

-Refer to Figure 5-1. If the market price is $1.50, what is Arnold's consumer surplus?

-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 increases from $38 to $46,

-Refer to Figure 5-1. If the market price is $1.00, what is the consumer surplus on the fourth burrito?

What is producer surplus? What does producer surplus measure?

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

-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

-Refer to Figure 5-3. What is the value of consumer surplus at the equilibrium price of $15?

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 5: Economic Efficiency , Government Price Setting and Taxes

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

-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 of the tickets is $10,

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,

-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,

Willingness to pay measures

If the quantity of sunglasses supplied is represented by the equation QS = -60 + 4P, then the corresponding price of sunglasses is represented by the equation

If the market price is at equilibrium, the producer surplus is minimised.

Economic efficiency in a competitive market is achieved when

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

The government proposes a tax on imported champagne. Buyers will bear the entire burden of the tax if the

If the price of hairspray is represented by equation P = 10 - 0.2 QD, then the corresponding quantity of hairspray demanded is represented by the equation

-Refer to Figure 5-1. If the market price is $1.50, what is Arnold's consumer surplus?

-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 increases from $38 to $46,

-Refer to Figure 5-1. If the market price is $1.00, what is the consumer surplus on the fourth burrito?

What is producer surplus? What does producer surplus measure?

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

-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

-Refer to Figure 5-3. What is the value of consumer surplus at the equilibrium price of $15?

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

If the quantity of sunglasses supplied is represented by the equation Q_S = -60 + 4P, then the corresponding price of sunglasses is represented by the equation

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

If the price of hairspray is represented by equation P = 10 - 0.2 Q_D, then the corresponding quantity of hairspray demanded is represented by the equation