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

Figure 4-3 shows Kendra's demand curve for ice cream cones. -Refer to Figure 4-3.What is the total amount that Kendra is willing to pay for 3 ice cream cones?

Figure 4-3 shows Kendra's demand curve for ice cream cones. -Refer to Figure 4-3.If the market price is $3.50,what is the consumer surplus on the first ice cream cone?

If buyers were required to pay the federal excise tax on gasoline directly to the government,the demand curve for gasoline would shift up.

Table 4-13 Demand Supply P=50-Q P=10+1/3Q Q=50-P Q=3P-30 -Refer to Table 4-13.The equations above describe the demand and supply for Aunt Maud's Premium Hand Lotion.What are the equilibrium price and quantity (in thousands)for Aunt Maud's Lotion?

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 demanded?

If the government implements a price ceiling on insulin,this will

In a competitive market when there is no deadweight loss

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 supplied decreases by 80,000 at each wage level.What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?

What is "tax incidence"? What determines tax incidence in a competitive market?

An efficient tax is

Table 4-3 The Waco Kid's Cowboy Hats Marginal Cost (dollars) 1st hat \ 24 2nd hat 30 3rd hat 38 4th hat 46 -Refer to Table 4-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specializes in producing western wear.If the market price of cowboy hats is $50,producer surplus is

The following equations represent the demand and supply for silver pendants. QD = 50 - 2P QS = -10 + 2P What is the equilibrium price (P)and quantity (Q - in thousands)of pendants?

Figure 4-18 shows the market for cigarettes.The government plans to impose a unit tax in this market. -Refer to Figure 4-18.For each unit sold,the price sellers receive after the tax (net of tax)is

If equilibrium is achieved in a competitive market

Using a supply and demand graph,illustrate the effect of an increase in the federal cigarette tax of $1.00 per pack,where the entire tax burden falls on the consumer.Assume the equilibrium price before the tax is $5.00 per pack and the equilibrium quantity is 30 million packs. After the implementation of the tax,what are the equilibrium price and equilibrium quantity?

Figure 4-16 -Refer to Figure 4-16.Suppose the market is initially in equilibrium at price P1 and now the government imposes a tax on every unit sold.Which of the following statements best describes the impact of the tax? For demand curve D1

If the government implements a price ceiling on insulin,this will have all of the following effects on the market for insulin except

Figure 4-7 -Refer to Figure 4-7.The figure above represents the market for iced tea.Assume that this is a competitive market.If the price of iced tea is $1,what changes in the market would result in an economically efficient output?

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.As a result of the tax,is there a loss in consumer surplus?

Frieda is at her local florist to buy a dozen roses.She is willing to pay $75 for the roses,and buys them for $75.Frieda's consumer surplus from the purchase is