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

A supply curve shows

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 $20

Each point on a demand curve shows

Suppose there are two cities that have rent controlled apartments.In one city (Albany)all apartments are subject to rent control; in the other city (Halftrack)one-half of the apartments are rent controlled.Which of the following is most likely to be true?

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 area represents the deadweight loss after the imposition of the price floor?

The division of the burden of a tax between buyers and sellers in a market is called tax incidence.

Table 4-3 -Refer to Table 4-3.The table above lists the marginal cost of polo shirts by Marko's,a firm that specializes in producing men's clothing.If the market price of Marko's polo shirts is $30,producer surplus is

All renters benefit from rent control and all landlords lose.

Suppliers will be willing to supply a product in all of the following situations except

Table 4-3 -Refer to Table 4-3.The table above lists the marginal cost of polo shirts by Marko's,a firm that specializes in producing men's clothing.If the market price of Marko's polo shirts is $30,Marko's will produce

Figure 4-4 -Refer to Figure 4-4.The figure above represents the market for iced tea.Assume that this is a competitive market.Which of the following is true?

Figure 4-8 Figure 4-8 shows the market for taxi rides.The following question(s)are based on this figure. -Refer to Figure 4-8.To legally drive a taxicab in New York City,you must have a medallion issued by the city government.Assume that only 13,200 medallions have been issued.Let's also assume this puts an absolute limit on the number of taxi rides that can be supplied in New York City on any day,because no one breaks the law by driving a taxi without a medallion.Assume as well that each taxi provides 6 trips per day.In that case,the quantity supplied of taxi rides is 79,200 (or 6 rides per taxi × 13,200 taxis).This is shown in the diagram with a vertical line at this quantity.Assume that there are no government controls on the prices that drivers can charge for rides. a.What would the equilibrium price and quantity be in this market if there were no medallion requirement? b.If there were no medallion requirement,indicate the area that represents consumer surplus. c.If there were no medallion requirement,indicate the area that represents producer surplus. d.If there were no medallion requirement,indicate the area that represents economic surplus. e.What are the price and quantity with the medallion requirement? f.With a medallion requirement in place,what area represents consumer surplus? g.With a medallion requirement in place,what area represents producer surplus? h.With a medallion requirement in place,what area represents the deadweight loss? i.Based on your answers to parts (c)and (g),are taxicab drivers better off with the medallion requirement for taxicabs than without? j.Are consumers better off with or without the medallion requirement for taxicabs?

Table 4-6 -Refer to Table 4-6.The equations above describe the demand and supply for Aunt Maud's Premium Hand Lotion.What are the equilibrium price and quantity (in thousands)for Aunt Maud's Lotion?

Which of the following statements best describes the concept of consumer surplus?

Government intervention in agricultural markets in the U.S.began

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 $1

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 $10.00 an hour is mandated,what is the quantity of labor demanded?

If,in a competitive market,marginal benefit is greater than marginal cost

Figure 4-9 Figure 4-9 shows the market for cigarettes.The government plans to impose a unit tax in this market. -Refer to Figure 4-9.What is the size of the unit tax?

Table 4-1 -Refer to Table 4-1.The table above lists the highest prices three consumers,Curly,Moe,and Larry,are willing to pay for a bottle of champagne.If the price of one of the bottles is $95 dollars,total consumer surplus will be