Econ 201 Examen2
Donald produces nails at a cost of 350$ per ton. If he sells the nails for $500 per ton, his producer surplus is?
$150
In a competitive market the price is $8. A typical firm in the market has ATC = $6, AVC= $5, and MC = $8 How much economic profit is the firm earning in the short run?
$2 per unit
Studies of the effects in minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about
1 to 3 percent
Barney builds custom wooden birdhouses. He can make 150 birdhouses per month and sell them for $50 His average total cost is $30 per birdhouse. Barney is considering hiring his best friend Fred to work for him. Fred can buil d 125 birdhouses per month. If Barney hires Fred, what will be the monthly output birdhouse busines
150+125= 275 birdhouses
Barnery builds birdhouses. He can make 150 birdhouses per month and sell them for $50 each. His Average total cost is 30$ per bird house. Whatbis Barneys monthly total revenue?
150x$50= 7,500
Suppose the price of the good is $175$. If the firm produces and sells 515 units of output, its total revenue is
175x515= 90,125
Donald produces nails at a cost $200 per ton. If he sells the nails for $350 per ton, his producer surplus per ton is:
350-200= 150
Which of the following forms is the clapest to being perfectly competitive firm? A. Apple B a wheat farmer in Kansas C. The NY yankees D. Debeers diamond wholesalers
A wheat farmer in Kansas
Which if the following firms is the closest to being a perfectly competitive firm?
A. A hot dog vendor in New York
Average Total Costs (ATC) is calculated as follows
ATC= (total cost)/(quantity of output)
Anger over British taxes played significant role in bringing about the
American Revolution
Consumer surplus is
Amount a consumer is willing to pay minus the amount the consumer actually pays
If marginal cost is greater than the average total cost, then
Average total cost is increasing
Who is a price taker in a competitive market?
Both buyers and sellers
Suppose that the market price for pizzas increases. The increase in producer surplus comes from the benefit of higher prices to
Both existing sellers who now receive higher prices on the pizzas they were already selling new sellers who enter the market because of the higher prices.
In 1776, the american revolution was sparked by anger over
British taces imposed on American Colonies
When a tax is levied on buyers of tea?
Buyers of tea and sellers of tea both are made worse off
When a tax is imposed on a good for which the supply is relatively elastic and the demand is relatively inelastic,
Buyers of the good will bear most of the burden of the tax
Which of the following is not correct? a. As that's policy advisers economics use the thing is to help change the world for the better B. Economic have two rolls-scientist and policy adviser C. Economic policies really have a fax that the architect did not intend or anticipate. D. As scientists, economists develop and test there is to explain the world around them
C. Economic policies really have a fax that the architect did not intend or anticipate.
Which of the following statements is correct a. Marginal revenue can be calculated as total revenue divided by the quantity sold. b. For all firms, marginal revenue equals the price of the good. c. Only for competitive firms does average revenue equal marginal d. Only average revenue equal the price of the good.
C. Only for competitive firms does average revenue equal marginal
On a graph, the area below a demand curve and above the price meausres
Consumer Surplus
The benefit to buyers of participating in a market is measured by
Consumer surplus
Christine used $5,000 from her personal savings account to buy pottery tools for her business . The savings account paid 1 % annual interest . Christine could earn $ 6,000 per year as a tax preparer . What is the annual economic profit of her cookie jar business?
D. 29,950
The loss in total surplus resulting from a tax is called?
Deadweight loss
Deadweight loss is the
Decline in total surplus that surplus that results from a tax
Taxes wre costly to market participants because they
Distort market outcomes, alter incentives, transfer respurces from market particpants to the government
Equillibrium =
Efficient price-quantity combination
For a firm in a perfectly competitive market, the price of the good is always
Equal to marginal value
Suppose that in a competitive market the equilibrium price is $2.50. What is marginal revenue for the last unit sold by the typical firm in this market?
Exatly 2.50
Competitive markets are characterized by
Free entry and exit by firms
For the purpose of analyzing the gains and losses from a tax on a good, we use tax revenue as a direct measure of the
Governments benefit from the tax
The Social Security tax is a tax on
Labor
Get a portion of minimum-wage owners who are families with income is below the poverty line is what?
Less than one third
Diseconomics of a scale occur when a firm's
Long run average total costs ade increasinc as output increases
When the government imposes taxes on buyers or sellers of a good, society
Loses some of the benefits of market efficiency
Market Power and externalities are examples of?
Market failure
Which of the following is a tax on Labor? A. Medicare tax B. Sales tax C. Quantity of output D. Revenue
Medicare Tax
Which of the following is a tax on labor?
Medicare, Social, Federal Income taxes
Total revenue minus only implicit costs is called?
Nothing we have learned.
The welfare of sellers is measured by
Producer surplus
A seller's oppurtunity cost measures the?
Value of everything she must give up to produce a good.
At the equillibrium price of a good, the good will be purchased by those buyers who?
Value the good more than price
The study of how the allocation of resources affects economic well being is called:
Welfare economics
Suppose sellers of liquor are required to send five dollars to the government for every bottle of liquor they sell. Further, suppose this tax cut is the price paid by buyers of liquor to rise by three dollars per bottle which of the following statements is correct
b, This tax causes the supply curve for liquor to shift upward by $5.00 at each quantity of liquor.
The minimum wage was instituted to ensure workers
b. A minimally adequate standard of living
When policymakers set prices by legal decree, they
c. Obscure the signals that normally guide the allocation of societys resources
This prices. goods Since story Local in the large 1980s, demonstrates retailers, outside quantities like of Wal-Mart that the the and, stores therefore, have neighborhood community at appeared drug business cheaper in store, district. prices. almost often go Many out Wal-Mart every community of customers also business locates in at its because America. Wal-Mart stores where Wal-Mart land buys prices its
ere are economies of scale in retail sales.
If a firm in a perfectly competitive market triples the number of units of output sold, then total revenue will
exactly triple
2. If the government removes a binding price floor from a market, then the price paid by buyers will
increase, and the quantity sold in the market will decrease.
If the size of a tax increases, tax revenue
may increase, decrease, or remain the same
The value of a business owners time is an example of
oppurtunity cost
economic profit
will never exceed accounting profit
Marginal cost is equal to
ΔTC/ΔQ
A production function is a relationship between inputs and
Quantity of output
Assume a certain firm regards the number of workers it employs as variable but regards the size of its factory as fixed. This assumptionis often realistic
In the short run, but not in the long run
A firm has a market power if it can
Influrnce the market price kf the good it sells.
The length of the short run
Is different for different types of firms.
For a firm, the relationship between the wuantity of inputs and quantity of output is called the?
Production function
Economist assume that the goalof the firm is to maximize the total
Profits
Economists normally assume people's preferences should be
Respected
Which of the following would increase producer surplus?
Sellers' costs stay the same and the price of the good increases
Which of these types of costs can be ignored when an individual or a firm is making decisions?
Sunk costs
A payroll tax is a
Tax on the wages that firms pay their workers
An alternative to rent-control laws that would not reduce the quantity of housing supplied is
The payment by government of a fraction of a poor familys rent.
Producer surplus directly measures
The well-being sellers
Which of the following characteristics of competitive markets is necessary for firms to be price takers
There are many sellers, and Goods offered for sale are largely the same
The amount of money that a pharmacy is from the sale of its output is called
Total Revenue
Economists typically measure efficiency using?
Total surplus
Suppose the tax on gasoline is decreased from 0.60$ to 0.40$ per gallon. As a result,
a. The deadweight loss of the tax necessarily decreases.
which of the following instances would the deadweight loss of the tax on airline tickets increase by a factor of 9?
b. The tax on airline tickets increases from $20 per ticket per ticket.
3. Which of the following will cause an increase in producer surplus?
b. the price substitute increases