Question 1

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?

Accepted Answer

A)  P = $10; Q = 25 thousand
B)  P = $35; Q = 20 thousand
C)  P = $20; Q = 20 thousand
D)  P = $5; Q = 30 thousandE) B) and C)
F) A) and B)

Question 2

Table 4-1
 
-Refer to Table 4-1.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 $24 dollars

Accepted Answer

A)  Curly will buy two bottles,Moe will buy one bottle and Larry will buy no bottles.
B)  Curly will receive $26 of consumer surplus from buying one bottle.
C)  Curly and Moe receive a total of $80 of consumer surplus from buying one bottle each.Larry will buy no bottles.
D)  Larry will receive $15 of consumer surplus since he will buy no bottles.E) All of the above
F) B) and C)

Question 3

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

Accepted Answer

A)  increase the price consumers will pay for insulin.
B)  decrease the quantity of insulin the manufacturers will be willing to supply.
C)  have to be set above the market equilibrium price to be effective.
D)  encourage manufacturers to produce and sell more insulin to increase their profits.E) All of the above
F) C) and D)

Question 4

Table 4-4
  Table 4-4 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-4.If a minimum wage of $10.50 an hour is mandated,what is the quantity of labor demanded?

Accepted Answer

A)  400,000
B)  370,000
C)  340,000
D)  60,000E) A) and B)
F) B) and D)

Question 5

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

Accepted Answer

A)  supply curve of halogen bulbs is horizontal.
B)  demand curve for halogen bulbs is vertical.
C)  demand curve for halogen bulbs is horizontal.
D)  demand curve is downward sloping and the supply curve is upward sloping.E) C) and D)
F) B) and D)

Question 6

Figure 4-7 
-Refer to Figure 4-7 which shows the market for watermelons.Suppose the government imposes a price floor of Pw.How will the price floor affect the quantity supplied,quantity demanded,and quantity exchanged?

Accepted Answer

The price floor will have no effect on t...

Question 7

To affect the market outcome,a price floor

Accepted Answer

A)  must be set above the black market price.
B)  must be set above the legal price.
C)  must be set above the price ceiling.
D)  must be set above the equilibrium price.E) B) and C)
F) C) and D)

Question 8

The graph below represents the market for alfalfa.The market price is $7.00 per bushel.Identify the areas representing consumer surplus,producer surplus,and economic surplus.

Accepted Answer

Consumer surplus is represente...

Question 9

Figure 4-10 1 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 A) the producer bears a smaller share of the tax burden if the supply curve is S2. B) the producer bears a smaller share of the tax burden if the supply curve is S1. C) the producer's share of the tax burden is the same whether the supply curve is S1 or S2. D) the producer bears the entire burden of the tax if the supply curve is S2 and the consumer bears the entire burden of the tax if the supply curve is S1." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-10.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

Accepted Answer

A)  the producer bears a smaller share of the tax burden if the supply curve is S2.
B)  the producer bears a smaller share of the tax burden if the supply curve is S1.
C)  the producer's share of the tax burden is the same whether the supply curve is S1 or S2.
D)  the producer bears the entire burden of the tax if the supply curve is S2 and the consumer bears the entire burden of the tax if the supply curve is S1.E) A) and B)
F) None of the above

Question 10

Figure 4-3 1 and a quantity of Q1.Now suppose producers decide to cut output to Q2 in order to raise the price to P2. -Refer to Figure 4-3.What area represents the deadweight loss at the equilibrium price of P1? A) C + E + H B) G + H C) C + E D) There is no deadweight loss at the price of P1." class="answers-bank-image d-inline" rel="preload" > Figure 4-3 shows the market for granola.The market is initially in equilibrium at a price of P1 and a quantity of Q1.Now suppose producers decide to cut output to Q2 in order to raise the price to P2.
-Refer to Figure 4-3.What area represents the deadweight loss at the equilibrium price of P1?

Accepted Answer

A)  C + E + H
B)  G + H
C)  C + E
D)  There is no deadweight loss at the price of P1.E) B) and D)
F) All of the above

Question 11

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

Accepted Answer

A)  he spends all of his income.
B)  the marginal benefit is equal to the price of the product.
C)  the quantity demanded is equal to the quantity supplied.
D)  he is indifferent between consuming and saving.E) C) and D)
F) A) and D)

Question 12

Figure 4-5 0. -Refer to Figure 4-5.Suppose that instead of a price ceiling,the government imposed a price floor of R1.What area represents the deadweight loss after the imposition of the price floor? A) G + H B) J + H C) C + E + J + H D) C + E" class="answers-bank-image d-inline" rel="preload" > Figure 4-5 shows the market for apartments in Bay City.Recently,the government imposed a rent ceiling at R0.
-Refer to Figure 4-5.Suppose that instead of a price ceiling,the government imposed a price floor of R1.What area represents the deadweight loss after the imposition of the price floor?

Accepted Answer

A)  G + H
B)  J + H
C)  C + E + J + H
D)  C + EE) A) and C)
F) A) and B)

Question 13

Figure 4-1  Figure 4-1 shows Kendra's demand curve for ice cream cones.
-Refer to Figure 4-1.Kendra's marginal benefit from consuming the first ice cream cone is

Accepted Answer

A)  $9.00.
B)  $7.50.
C)  $3.50.
D)  $0.50.E) C) and D)
F) All of the above

Question 14

The demand and supply equations for the peach market are:
Demand: P = 24 - 0.5Q
Supply: P = -6 + 2.5Q
where P = price per bushel,and Q = quantity (in thousands).
a.Calculate the equilibrium price and quantity.
b.Suppose the government guaranteed producers a price of $24 per bushel.What would be the effect on quantity supplied? Provide a numerical value.
c.By how much would the $24 price change the quantity of peaches demanded? Provide
a numerical value.
d.Would there be a shortage or surplus of peaches?
e.What is the size of this shortage or surplus? Provide a numerical value.

Accepted Answer

a.Quantity = 10 thousand bushels: {24 - ...

Question 15

Economists working for Uber,along with economists from the University of Oxford and the University of Chicago,estimated the consumer surplus attributed to Uber.For the 4 largest U.S.markets,these economists estimated that the total consumer surplus from Uber in 2015 was

Accepted Answer

A)  almost $0.
B)  $13.30 per customer.
C)  $2.88 billion.
D)  6.76 billion.E) B) and C)
F) A) and D)

Question 16

Because minimum wage is a price floor

Accepted Answer

A)  it will be set below the market equilibrium price.
B)  it will create a deadweight loss.
C)  it will increase the number of jobs available in the labor market.
D)  it will maximize consumer surplus.E) C) and D)
F) B) and D)

Question 17

Price ceilings result in shortages.

Accepted Answer

A) True 
 B)False

Question 18

Figure 4-1  Figure 4-1 shows Kendra's demand curve for ice cream cones.
-Refer to Figure 4-1.If the market price is $3.50,what is the consumer surplus on the first ice cream cone?

Accepted Answer

A)  $0
B)  $0.50
C)  $3.50
D)  $9.00E) C) and D)
F) B) and C)

Question 19

Buyers will bear the entire burden of a unit tax if the demand curve for a product is

Accepted Answer

A)  horizontal.
B)  vertical.
C)  downward sloping.
D)  upward sloping.E) B) and C)
F) A) and D)

Question 20

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

Accepted Answer

A)  consumer surplus.
B)  marginal benefit.
C)  willingness to pay.
D)  producer surplus.E) B) and C)
F) A) and D)

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

The graph below represents the market for alfalfa.The market price is $7.00 per bushel.Identify the areas representing consumer surplus,producer surplus,and economic surplus.

Correct Answer
verified
Consumer surplus is represente...
View Answer

To affect the market outcome,a price floor

Correct Answer
verified

Figure 4-1 Figure 4-1 shows Kendra's demand curve for ice cream cones. -Refer to Figure 4-1.If the market price is $3.50,what is the consumer surplus on the first ice cream cone?

Correct Answer
verified

Figure 4-1 Figure 4-1 shows Kendra's demand curve for ice cream cones. -Refer to Figure 4-1.Kendra's marginal benefit from consuming the first ice cream cone is

Correct Answer
verified

Economists working for Uber,along with economists from the University of Oxford and the University of Chicago,estimated the consumer surplus attributed to Uber.For the 4 largest U.S.markets,these economists estimated that the total consumer surplus from Uber in 2015 was

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Table 4-1 -Refer to Table 4-1.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 $24 dollars

Correct Answer
verified

Correct Answer
verified
a.Quantity = 10 thousand bushels: {24 - ...
View Answer

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

Correct Answer
verified

Correct Answer
verified

Buyers will bear the entire burden of a unit tax if the demand curve for a product is

Correct Answer
verified

Table 4-4 Table 4-4 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. -Refer to Table 4-4.If a minimum wage of $10.50 an hour is mandated,what is the quantity of labor demanded?

Correct Answer
verified

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

Correct Answer
verified

Figure 4-10 -Refer to Figure 4-10.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

Correct Answer
verified

Figure 4-7 -Refer to Figure 4-7 which shows the market for watermelons.Suppose the government imposes a price floor of P_w.How will the price floor affect the quantity supplied,quantity demanded,and quantity exchanged?

Correct Answer
verified
The price floor will have no effect on t...
View Answer

Because minimum wage is a price floor

Correct Answer
verified

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

Correct Answer
verified

Price ceilings result in shortages.

Correct Answer
verified

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

Correct Answer
verified

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

The graph below represents the market for alfalfa.The market price is $7.00 per bushel.Identify the areas representing consumer surplus,producer surplus,and economic surplus.

Correct AnswerverifiedConsumer surplus is represente...View AnswerShow Answer

To affect the market outcome,a price floor

Correct AnswerverifiedShow Answer

Figure 4-1 Figure 4-1 shows Kendra's demand curve for ice cream cones. -Refer to Figure 4-1.If the market price is $3.50,what is the consumer surplus on the first ice cream cone?

Correct AnswerverifiedShow Answer

Figure 4-1 Figure 4-1 shows Kendra's demand curve for ice cream cones. -Refer to Figure 4-1.Kendra's marginal benefit from consuming the first ice cream cone is

Correct AnswerverifiedShow Answer

Economists working for Uber,along with economists from the University of Oxford and the University of Chicago,estimated the consumer surplus attributed to Uber.For the 4 largest U.S.markets,these economists estimated that the total consumer surplus from Uber in 2015 was

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 4-1 -Refer to Table 4-1.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 $24 dollars

Correct AnswerverifiedShow Answer

Correct Answerverifieda.Quantity = 10 thousand bushels: {24 - ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Buyers will bear the entire burden of a unit tax if the demand curve for a product is

Correct AnswerverifiedShow Answer

Table 4-4 Table 4-4 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. -Refer to Table 4-4.If a minimum wage of $10.50 an hour is mandated,what is the quantity of labor demanded?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 4-10 -Refer to Figure 4-10.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

Correct AnswerverifiedShow Answer

Figure 4-7 -Refer to Figure 4-7 which shows the market for watermelons.Suppose the government imposes a price floor of Pw.How will the price floor affect the quantity supplied,quantity demanded,and quantity exchanged?

Correct AnswerverifiedThe price floor will have no effect on t...View AnswerShow Answer

Because minimum wage is a price floor

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Price ceilings result in shortages.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified
Consumer surplus is represente...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
a.Quantity = 10 thousand bushels: {24 - ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Figure 4-10 -Refer to Figure 4-10.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

Correct Answer
verified

Figure 4-7 -Refer to Figure 4-7 which shows the market for watermelons.Suppose the government imposes a price floor of P_w.How will the price floor affect the quantity supplied,quantity demanded,and quantity exchanged?

Correct Answer
verified
The price floor will have no effect on t...
View Answer

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified