Exam 4: Economic Efficiency, government Price Setting, and Taxes

In Singapore the government places a $5,000 tax on the buyers of new automobiles.After the purchase of a new car,a buyer must pay the government $5,000.How would the imposition of the tax on buyers be illustrated in a graph?

The additional benefit to a consumer from consuming one more unit of a good or service

Price ceilings result in shortages.

Figure 4-1 Figure 4-1 shows Kendra's demand curve for ice-cream cones. -Refer to Figure 4-1.If the market price is $4.00,what is the maximum number of ice cream cones that Kendra will buy?

Figure 4-5 Figure 4-5 shows the market for apartments in Bay City.Recently,the government imposed a rent ceiling at R₀. -Refer to Figure 4-5.Suppose that instead of a price ceiling,the government imposed a price floor of R₁.What is the area representing the portion of consumer surplus transferred to producers as a result of the price floor?

Table 4-4 Table 4-4 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. -Refer to Table 4-4.Suppose that the quantity of labor demanded decreases by 40,000 at each wage level.What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?

Table 4-4 Table 4-4 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. -Refer to Table 4-4.If a minimum wage of $9.50 an hour is mandated,what is the quantity of labor demanded?

Which of the following describes the difference between "scarcity" and "shortage"?

Juanita goes to the Hardware Emporium to buy a new circular saw.She is willing to pay $120 for a new saw,but buys one on sale for $85.Juanita's consumer surplus from the purchase is

"Taxes are what we pay for a civilized society." This statement was made by

Figure 4-1 Figure 4-1 shows Kendra's demand curve for ice-cream cones. -Refer to Figure 4-1.If the market price is $3.50,what is the consumer surplus on the first ice cream cone?

Increases in the minimum wage are intended to raise the incomes of low-income workers.Many economists favor a different policy to achieve this goal,a policy that avoids the deadweight losses that result from the minimum wage.What is this policy?

Figure 4-6 Figure 4-6 shows the demand and supply curves for the coffee market.The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at $7.00. -Refer to Figure 4-6.What is the value of the portion of consumer surplus that has been transferred to producer surplus as a result of the price floor?

Figure 4-3 Figure 4-3 shows the market for granola.The market is initially in equilibrium at a price of P₁ and a quantity of Q₁.Now suppose producers decide to cut output to Q₂ in order to raise the price to P_2. -Refer to Figure 4-3.What area represents the deadweight loss at the equilibrium price of P₁?

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

Table 4-2 -Refer to Table 4-2.The table above lists the highest prices five consumers are willing to pay for a concert ticket.If the price of one of the tickets is $36

Figure 4-5 Figure 4-5 shows the market for apartments in Bay City.Recently,the government imposed a rent ceiling at R₀. -Refer to Figure 4-5.What area represents the deadweight loss after the imposition of the ceiling?

Figure 4-1 Figure 4-1 shows Kendra's demand curve for ice-cream cones. -Refer to Figure 4-1.If the market price is $3.50,what is Kendra's consumer surplus?

Figure 4-4 -Refer to Figure 4-4.The figure above represents the market for iced tea.Assume that this is a competitive market.If the price of iced tea is $3,what changes in the market would result in an economically efficient output?

Figure 4-1 Figure 4-1 shows Kendra's demand curve for ice-cream cones. -Refer to Figure 4-1.Kendra's marginal benefit from consuming the third ice cream cone is