Econ 2022 ch8&14 bonus
If the market price is 10$ what is the firms total cost
35$
The deadweight loss associated with this tax amounts to
80$ and this figure represents the surplus that us lost because the tax discourages mutually advantageous trades between buyers and sellers
Construction work is much riskier than working as a server at a restaurant. As a result we'd expect a different in wages between the two jobs which is known as
Compensating differential
Which graph correctly illustrates the relationship between the size of a tax and the size of dwl associated with tax
Exponential graph up
The firm should shut down if the market price is
Less than 3$
Firms would be encouraged to enter this market for all prices that exceed
P4
If the demand curve for wedding cakes shifts right then the value of the marginal product of labor for bakers will
Rise
As a result of the tax
the market experiences a deadweight loss of $80
Why does baseball star make more than dentist
Baseball star can provide his services to millions of people simultaneously
Suppose that the market for labor is initially in equilibrium. An increase in worker productivity will cause the equilibrium wage to _____ and the equilibrium quantity to ____\
Rise and risw
Earthquake destroys land. What happens
Supply of land decreases, causing the marginal productivity of the remaining land to increase and the rent increase
Which of the following is correct if the employer discriminated by hiring only workers with 20/20 vision
The employer will face higher costs than the firms that only focus on maximizing profits
In which of the following instances would the deadweight loss of the tax on airline tickets increase by a factor of 9
The tax on airline tickets increases from $20 per ticket to $60 per ticket.
Profit maximizing firms enter a competitive market when existing firms in that market have
average total costs less than market price
A change in the supply of one factor of production
can alter the earnings of all of the other factors.
When a tax is imposed on a good
equilibrium quantity of the good always decreases
Competitive markets are characterized by
free entry and exit by firms
When a country is on the downward-sloping side of the Laffer curves, a cut in the tax rate will
increase tax revenue and decrease the deadweight loss.
If the value of the marginal product of labor exceeds the wage then hiring another worker
increases the firm's profit.
Evidence of discrimination in labor markets
is difficult to verify by reference to differences in average wage rates.
Because of diminishing returns a factor in abundant supply has a
low marginal product and a low rental price
If the size of a tax increases, tax revenue
may increase, decrease, or remain the same
Suppose a firm in a competitive market earned $3,000 in total revenue and had a marginal revenue of $30 for the last unit produced and sold. What is the average revenue per unit and how many units were sold
$30 and 100 units
As a result of the tax, consumer surplus decreases by
160$, producer surplus decreases by 160, tax revenue is 240$ and deadweight loss is 80
If a competitive firm is currently producing a overly of output at which marginal cost exceeds marginal revenue, then
A one unit decrease in output will increase the firms profit
Which of the following scenarios exhibits statistical discrimination
A study comes out showing that brunettes are more likely to work harder than blondes, so companies prefer hiring brunettes
If there is systematic discrimination against a group of workers then the wage paid to those workers will likely be
Lower due to a lower demand for workers in that grouo
Suppose the government is considering levying a tax in one or more of the markets. Which markets will allow the government to minimize the deadweight loss
Markets B and D, demand is in elastic and supply is in elastic
If the market price rises above $6.5 the firm will earn
Positive economic profits in the short run
15$ tax imposed on widgets, tax reduces equilibrium quantity by 200, what is deadweight loss
1500$
If the market price is 6$ what is the firms short run economic profit
0$
If there are 100 identical firms in this market, what is the value of Q2
20,000
As a result of the fire, as small business owner loses some of her computers and equipment. If the property of diminishing returns applies to all factors of production she should expect to see
An increase in the marginal productivity of her remaining capital and a decrease in the marginal productivity of her labor
Which of the following could explain the changing gap in income between unskilled and skilled workers in the United States
Certain technological changes such as the introduction of computers have increased the domestic demand for skilled labor and decreased the domestic demand for unskilled labor.
If it wants to maximize profit, cold duck airlines should
Continue flying until the lease expires and then drop the run
Whenever a perfectly competitive firm chooses to change its level of output it's marginal revenue
Does not change
Which theory is supportive of the idea that increasing educational levels for all workers would raise all workers productivity and therefore their wages
Human capital theory
Suppose the market price for firms output increases. Holding all else constant the equilibrium quantity of capital equipment will
Increase
Assume the market for hats is competitive. An increase in the market price of hats
Increases demand for workers who make hats and increases their equilibrium wage
When employers sort employment applications into high ability and low ability people based on whether or not the applicant has a college degree they are providing evidence in support of the
Signaling theory of education
Suppose the wage earned by pear pickers falls. Which would we most likely observe as a result.
Supply of orange pickers would increase and the equilibrium wage of orange pickers would decrease
If T represents the size of the tax on a good and Q represents the quantity of the food that is sold, total tax revenue is expressed as
TxQ
Assuming that all things are equal including wage, which is correct
The quantity of labor supplied for fun jobs exceeds that of dull jobs
Which of the following statements is correct
Total surplus before the tax is imposed is 500$
What happens to the total surplus in a market when the government imposes a tax
Total surplus decreases
Most economists believe that the higher average salaries earned by men in comparison to women arise from
a variety of factors, including differences in human capital, compensating differentials, and discrimination.
If consumers do not discriminate between bald barbers and barbers with hair then
competitive pressure in the market for haircuts will eventually cause the equilibrium wage in both markets to be identical.
Sometimes wages are set above the equilibrium level when firms pay
efficiency wages to reduce turnover.
A competitive market is in long run equilibrium. If demand decreases, we can be certain that price will
fall in the short run. All, some, or no firms will shut down, and some of them will exit the industry. Price will then rise to reach the new long-run equilibrium.