Question 1

The sum of consumer surplus and producer surplus is called economic surplus.

Accepted Answer

A) True 
 B)False

Question 2

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 3

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

Accepted Answer

A)  the marginal cost of pecans is greater than the marginal benefit; therefore, output is inefficiently low. 
B)  producers should raise the price to $9 in order to sell the quantity demanded of 12,000. 
C)  the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently high. 
D)  the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently low. 
A)  the marginal cost of pecans is greater than the marginal benefit; therefore, output is inefficiently low. 
B)  producers should raise the price to $9 in order to sell the quantity demanded of 12,000. 
C)  the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently high. 
D)  the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently low.

Question 4

Figure 4-3   Figure 4-3 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 40S1U1B1 S1U1B0in order to raise the price to $18.
-Refer to Figure 4-3.What is the value of producer surplus at a price of $18?

Accepted Answer

A)  $240 
B)  $300 
C)  $340 
D)  $720 
A)  $240 
B)  $300 
C)  $340 
D)  $720

Question 5

Figure 4-1   Figure 4-1 shows Arnold's demand curve for burritos.
-Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 3 burritos?

Accepted Answer

A)  $1.50 
B)  $6.00 
C)  $7.00 
D)  $10.00 
A)  $1.50 
B)  $6.00 
C)  $7.00 
D)  $10.00

Question 6

Figure 4-6   Figure 4-6 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 PS1U1B1fS1U1B0.
-Refer to Figure 4-6.What area represents the portion of consumer surplus that has been transferred to producer surplus as a result of the price floor?

Accepted Answer

A)  B 
B)  B + C 
C)  B + E 
D)  E 
A)  B 
B)  B + C 
C)  B + E 
D)  E

Question 7

In a competitive market equilibrium

Accepted Answer

A)  total consumer surplus equals total producer surplus. 
B)  marginal benefit and marginal cost are maximized. 
C)  consumers and producers benefit equally. 
D)  the marginal benefit equals the marginal cost of the last unit sold. 
A)  total consumer surplus equals total producer surplus. 
B)  marginal benefit and marginal cost are maximized. 
C)  consumers and producers benefit equally. 
D)  the marginal benefit equals the marginal cost of the last unit sold.

Question 8

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 9

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

Accepted Answer

A)  W = $8.50; Q = 550,000 
B)  W = $12.50; Q = 630,000 
C)  W = $9.50; Q = 610,000 
D)  W = $11.50; Q = 610,000 
A)  W = $8.50; Q = 550,000 
B)  W = $12.50; Q = 630,000 
C)  W = $9.50; Q = 610,000 
D)  W = $11.50; Q = 610,000

Question 10

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

Accepted Answer

An economically efficient outcome means

Question 11

Figure 4-1   Figure 4-1 shows Arnold's demand curve for burritos.
-Refer to Figure 4-1.If the market price is $2.00,what is the consumer surplus on the first burrito?

Accepted Answer

A)  $0.50 
B)  $1.00 
C)  $2.00 
D)  $7.50 
A)  $0.50 
B)  $1.00 
C)  $2.00 
D)  $7.50

Question 12

Figure 4-1   Figure 4-1 shows Arnold's demand curve for burritos.
-Refer to Figure 4-1.If the market price is $3.00,what is the maximum number of burritos that Arnold will buy?

Accepted Answer

A)  0 
B)  2 
C)  3 
D)  4 
A)  0 
B)  2 
C)  3 
D)  4

Question 13

Figure 4-1   Figure 4-1 shows Arnold's demand curve for burritos.
-Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 4 burritos?

Accepted Answer

A)  $1.00 
B)  $4.00 
C)  $7.00 
D)  $10.00 
A)  $1.00 
B)  $4.00 
C)  $7.00 
D)  $10.00

Question 14

Figure 4-1   Figure 4-1 shows Arnold's demand curve for burritos.
-Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 2 burritos?

Accepted Answer

A)  $2.00 
B)  $4.50 
C)  $7.50 
D)  $10.00 
A)  $2.00 
B)  $4.50 
C)  $7.50 
D)  $10.00

Question 15

Table 4-1
  
-Refer to Table 4-1.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 the shirts falls from $28 to $20

Accepted Answer

A)  consumer surplus increases from $14 to $35. 
B)  Tom will buy two shirts; Dick and Harriet will each buy one shirt. 
C)  consumer surplus will increase from $70 to $95. 
D)  Harriet will receive more consumer surplus than Tom or Dick. 
A)  consumer surplus increases from $14 to $35. 
B)  Tom will buy two shirts; Dick and Harriet will each buy one shirt. 
C)  consumer surplus will increase from $70 to $95. 
D)  Harriet will receive more consumer surplus than Tom or Dick.

Question 16

Black markets only exist in developing nations.

Accepted Answer

A) True 
 B)False

Question 17

Figure 4-1   Figure 4-1 shows Arnold's demand curve for burritos.
-Refer to Figure 4-1.If the market price is $1.50,what is the consumer surplus on the second burrito?

Accepted Answer

A)  $0.50 
B)  $1.00 
C)  $1.50 
D)  $3.50 
A)  $0.50 
B)  $1.00 
C)  $1.50 
D)  $3.50

Question 18

Which term refers to a legally established minimum price that firms may charge?

Accepted Answer

A)  a price ceiling 
B)  a subsidy 
C)  a price floor 
D)  a tariff 
A)  a price ceiling 
B)  a subsidy 
C)  a price floor 
D)  a tariff

Question 19

A minimum wage law dictates

Accepted Answer

A)  the minimum quantity of labor that a firm must employ. 
B)  the lowest wage that firms may pay for labor. 
C)  the highest wage that firms must pay for labor. 
D)  the minimum qualifications for labor. 
A)  the minimum quantity of labor that a firm must employ. 
B)  the lowest wage that firms may pay for labor. 
C)  the highest wage that firms must pay for labor. 
D)  the minimum qualifications for labor.

Question 20

Figure 4-5   Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month.
-Refer to Figure 4-5.Suppose that instead of a rent ceiling,the government imposed a price floor of $2,000 per month for apartments.What is the value of consumer surplus after the imposition of the price floor?

Accepted Answer

A)  $6,000 
B)  $30,000 
C)  $100,000 
D)  $240,000 
A)  $6,000 
B)  $30,000 
C)  $100,000 
D)  $240,000

The sum of consumer surplus and producer surplus is called economic surplus.

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

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

Figure 4-3 Figure 4-3 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 40in order to raise the price to $18. -Refer to Figure 4-3.What is the value of producer surplus at a price of $18?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 3 burritos?

In a competitive market equilibrium

Economic efficiency in a competitive market is achieved when

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

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

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $2.00,what is the consumer surplus on the first burrito?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $3.00,what is the maximum number of burritos that Arnold will buy?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 4 burritos?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 2 burritos?

Table 4-1 -Refer to Table 4-1.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 the shirts falls from $28 to $20

Black markets only exist in developing nations.

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $1.50,what is the consumer surplus on the second burrito?

Which term refers to a legally established minimum price that firms may charge?

A minimum wage law dictates

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters

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

The sum of consumer surplus and producer surplus is called economic surplus.

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

Figure 4-3 Figure 4-3 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 4-3.What is the value of producer surplus at a price of $18?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 3 burritos?

In a competitive market equilibrium

Economic efficiency in a competitive market is achieved when

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

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

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $2.00,what is the consumer surplus on the first burrito?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $3.00,what is the maximum number of burritos that Arnold will buy?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 4 burritos?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 2 burritos?

Table 4-1 -Refer to Table 4-1.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 the shirts falls from $28 to $20

Black markets only exist in developing nations.

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $1.50,what is the consumer surplus on the second burrito?

Which term refers to a legally established minimum price that firms may charge?

A minimum wage law dictates

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

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

Figure 4-3 Figure 4-3 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 40in order to raise the price to $18. -Refer to Figure 4-3.What is the value of producer surplus at a price of $18?