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

Table 4-6 Marko's Polos Marginal Cost (dollars) 1 st shirt \ 7 2nd shirt 10 3rd shirt 15 4th shirt 20 -Refer to Table 4-6.The table above lists the marginal cost of polo shirts by Marko's,a firm that specializes in producing men's clothing.If the price of polo shirts decreases from $15 to $10

The sum of consumer surplus and producer surplus is equal to

A consumer is willing to purchase a product up to the point where

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 consumer surplus on the fourth burrito?

Economists ________ that price controls are desirable.

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.If a minimum wage of $12.50 an hour is mandated,what is the quantity of labor supplied?

You are given the following market data for apples. Demand is represented by: P = 12 - 0.01Q Supply is represented by: P = 0.02Q where P= price per bushel,and Q=quantity. a.Calculate the equilibrium price and quantity. b.Suppose the government guaranteed producers a price of $10 per bushel.What would be the effect on quantity supplied? Provide a numerical value. c.By how much would the $10 price change the quantity of apples demanded? Provide a numerical value. d.Would there be a shortage or surplus of apples? e.What is the size of this shortage or surplus? Provide a numerical value.

Hourly Wage (dollars) Quantity of Labor Supplied Quantity of Labor Demanded \ 8.00 350,000 390,000 8.50 360,000 380,000 9.00 370,000 370,000 9.50 380,000 360,000 10.00 390,000 350,000 10.50 400,000 340,000 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.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?

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.With rent control,the quantity supplied is Q1.Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get.What is the highest rent they can get?

Table 4-2 Consumer Willingness to Pay Anya \ 24 Basil 20 Celeste 15 Dralon 12 Esther 7 -Refer to Table 4-2.The table above lists the highest prices five consumers are willing to pay for a theater ticket.If the price of one ticket rises from $10 to $19

Deadweight loss refers to the reduction in economic surplus resulting from a market not being in competitive equilibrium.

If the quantity of hearing aids demanded is represented by the equation QD = 40 - P then the corresponding price of hearing aids is represented by the equation

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

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

The additional benefit to a consumer from consuming one more unit of a good or service is the marginal benefit.

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?

Black markets only exist in developing nations.

A supply curve shows

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

In a competitive market the ________ curve shows the marginal benefit received by consumers and the ________ curve shows the marginal cost to producers.