Exam 5: The Economics of Healthcare

Table 5-3 -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 market price of cowboy hats is $50,how many hats will be produced?

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

Table 5-4 Table 5-4 shows the demand and supply schedules for the labour market in the city of Pixley. -Refer to Table 5-4.What is the equilibrium hourly wage (W*)and the equilibrium quantity of labour (Q*)?

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

Which of the following is not a consequence of minimum wage laws?

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 Arnold's consumer surplus?

Suppose an excise tax of $1 is imposed on every case of beer sold,and sellers are responsible for paying this tax.How would the imposition of the tax be illustrated in a graph?

Figure 5-10 -Refer to Figure 5-10.The figure above illustrates the markets for two goods,Good X and Good Y.Suppose an identical dollar tax is imposed in each market. a.Compare the consumer burden and producer burden in each market.Illustrate your answer graphically. b.If the goal of the government is to raise revenue with minimum impact to quantity consumed,in which market should the tax be imposed? c.If the goal of the government is to discourage consumption,in which market should the tax be imposed?

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.Suppose that instead of a rent ceiling,the government imposed a price floor of $2000 per month for apartments.What is the value of consumer surplus after the imposition of the price floor?

Table 5-4 Table 5-4 shows the demand and supply schedules for the labour market in the city of Pixley. -Refer to Table 5-4.Suppose that the quantity of labour supplied decreases by 80 000 at each wage level.What are the new free market equilibrium hourly wage and the new equilibrium quantity of labour?

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?

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

Figure 5-6 -Refer to Figure 5-6 which shows the market for vitamins.Suppose the government imposes a price ceiling of Pv.How will the price ceiling affect the quantity supplied,quantity demanded and quantity exchanged?

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.For each unit sold,the price sellers receive after the tax (net of tax)is

A price ceiling is a legally determined maximum price that sellers may charge.

Assume the market price for lemon grass is $4.00 per kilogram,but most buyers are willing to pay more than the market price.At the market price of $4.00,the quantity of lemon grass demanded is 1500 kilograms per month,and quantity demanded does not reach zero until the price reaches $30.00 per kilogram.Construct a graph showing this data,calculate the total consumer surplus in the market for lemon grass,and show the consumer surplus on the graph.

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 rises from $10 to $19,

Which of the following is not a result of government price controls?

Economic surplus

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