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

Figure 4-9 Figure 4-9 shows the demand and supply curves for the almond market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at Pf. -David Card and Alan Krueger conducted a study of fast-food restaurants in New Jersey and Pennsylvania. The study found that

The minimum wage is an example of a price ceiling.

The government proposes a tax on halogen light bulbs. Sellers will bear the entire burden of the tax if the

Table 4-8 Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. -Refer to Table 4-8. If a minimum wage of $10.00 an hour is mandated, what is the quantity of labor supplied?

Figure 4-4 Figure 4-4 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 4-4. At a price of $18 consumers are willing to buy 40 pounds of tiger shrimp. Is this an economically efficient quantity?

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

Figure 4-5 -Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. Which of the following is true?

Table 4-6 -A supply curve shows

What is economic surplus? When is economic surplus at a maximum?

Figure 4-3 Figure 4-3 shows Kendra's demand curve for ice-cream cones. -Refer to Figure 4-3. Kendra's marginal benefit from consuming the first ice cream cone is

Figure 4-11 Figure 4-11 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 4-11. What is the value of producer surplus after the imposition of the price floor?

Figure 4-10 Figure 4-10 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R0. -Refer to Figure 4-10. Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the area representing producer surplus after the imposition of the price floor?

Figure 4-5 -Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. At a price of $3,

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1. If the market price is $1.00, what is the maximum number of burritos that Arnold will buy?

One result of a tax is an increase in economic efficiency.

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

Figure 4-3 Figure 4-3 shows Kendra's demand curve for ice-cream cones. -Suppliers will be willing to supply a product in all of the following situations except

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

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.

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