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

Table 4-11 Demand Supply P=80- P=50+1/2 =80-P =2P-100 -Refer to Table 4-11.The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick.The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units.What is the value of consumer surplus?

Suppose that in Canada the government places a $1,500 tax on the buyers of new snowmobiles.After the purchase of a new snowmobile,a buyer must pay the government $1,500.How would the imposition of the tax on buyers be illustrated in a graph?

Price ceilings are illegal in the United States.

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 4-4 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 the equilibrium price of $15 consumers are willing to buy 80 pounds of tiger shrimp.Is this an economically efficient quantity?

Shortage means the same thing as scarcity.

Table 4-14 Demand Supply P=60-2Q =15+Q =30-0.5P = -15 -Refer to Table 4-14.The equations above describe the demand and supply for Pauline's Pickled Pomegranates.The equilibrium price and quantity for Pauline's Pickled Pomegranates are $30 and 15 thousand units.What is the value of producer surplus?

If the quantity of soccer balls demanded is represented by the demand equation QD = 80 - 2P,then to solve for the price of soccer balls,the equation would be rewritten as

Which of the following statements is true?

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

Which of the following is a result of government price controls?

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?

To affect the market outcome,a price floor

Figure 4-15 shows the market for beer.The government plans to impose a per-unit tax in this market. -Refer to Figure 4-15.How much of the tax is paid by buyers?

Table 4-4 Consumer Willingness to Pay Curly \ 50 Moe 30 Larry 15 -Refer to Table 4-4.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 $27 dollars,total consumer surplus will be

Table 4-12 Demand Supply P=50-2 P=35+ =25-0.5P =P-35 -Refer to Table 4-12.The equations above describe the demand and supply for Bubba's Fried Jellybeans.The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units.What is the value of producer surplus?

The following equations represent the demand and supply for bird feeders. QD = 35 - P QS = -5 + 3P What is the equilibrium price (P)and quantity (Q - in thousands)of bird feeders?

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?

The payroll tax is a tax imposed on ________ that is used to fund Social Security and Medicare.

Hourly Wage (dollars) Quantity of Labor Supplied Quantity of Labor Demanded \ 7.50 530,000 650,000 8.50 550,000 630,000 9.50 570,000 610,000 10.50 590,000 590,000 11.50 610,000 570,000 12.50 630,000 550,000 Table 4-7 shows the demand and supply schedules for the labor market in the city of Pixley. -Refer to Table 4-7.Suppose that the quantity of labor demanded increases by 40,000 at each wage level.What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?