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

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 economic surplus in this market?

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

You are given the following market data for Venus automobiles in Saturnia. Demand is represented by: P = 200 - 0.25Q Supply is represented by: P = 130 + 0.10Q where P = Price and Q = Quantity. a.Calculate the equilibrium price and quantity. b.Calculate the consumer surplus in this market. c.Calculate the producer surplus in this market.

The maximum price that a buyer is willing to pay for a good measures his

Marginal benefit is the total benefit to a consumer from consuming one more unit of a good or service.

If,in a competitive market,marginal benefit is less than marginal cost

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 consumer surplus after the imposition of the price floor?

Figure 4-18 shows the market for cigarettes.The government plans to impose a unit tax in this market. -Refer to Figure 4-18.How much of the tax is paid by buyers?

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 market price of Marko's polo shirts is $30,Marko's will produce

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.If a minimum wage of $9.50 is mandated there will be a

In New York City,about 1 million apartments are subject to rent control by the local government.Rent control

The willingness of consumers to buy a product at different prices is shown on a

Consumer surplus is the difference between the highest price someone is willing to pay for a product and the price he actually pays for the product.

You are given the following market data for Venus automobiles in Saturnia. Demand: P = 35,000 - 0.5Q Supply: P = 8,000 + 0.25Q where P = Price and Q = Quantity. a.Calculate the equilibrium price and quantity. b.Calculate the consumer surplus in this market. c.Calculate the producer surplus in this market.

A tax is efficient if it imposes a large excess burden relative to the tax revenue it raises.

The total amount of producer surplus in a market is equal to

Government intervention in agriculture began in the United States in the 1890s.

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

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.What is the equilibrium hourly wage (W*)and the equilibrium quantity of labor (Q*)?

Figure 4-2 -Refer to Figure 4-2.What area represents producer surplus at a price of P1?