macro economics

Consumer surplus without the tax is

$6, and consumer surplus with the tax is $1.50.

. How many units of the good are purchased after the imposition of the price floor?

15 wrong

Which of the following is likely to have the most price elastic demand?

Tommy Hilfiger Jeans

Producer surplus is

the amount a seller is paid minus the cost of production.

. The loss of producer surplus for those sellers of the good who continue to sell it after the tax is imposed is

2

If a 15% increase in price for a good results in a 20 percent decrease in quantity demanded, the price elasticity of demand is

20/15= 1.33

A binding price ceiling is shown in

graph b only

If the government imposes a price floor of $110 in this market, then consumer surplus will decrease by

600

. At a price of $70 per unit, sellers' total revenue equals

70x15= 1050

Which graph correctly illustrates the relationship between the size of a tax and the size of the deadweight loss associated with the tax?

graph A

An example of positive analysis is studying

how market forces produce equilibrium.

Suppose the world price of cardboard is $45. Then, if Boxland goes from prohibiting international trade in cardboard to allowing international trade in cardboard,

domestic producers of cardboard become worse off and domestic consumers of cardboard become better off.

A legal minimum on the price at which a good can be sold is called a

price floor

Suppose a tax of $5 per unit is imposed on a good, and the tax causes the equilibrium quantity of the good to decrease from 200 units to 100 units. The tax decreases consumer surplus by $450 and decreases producer surplus by $300. The deadweight loss from the tax is

$250.

Using the midpoint method, between prices of $20 and $30, price elasticity of demand is about

.33

When the country for which the figure is drawn allows international trade in crude oil,

.producer surplus changes from the area C to the area B + C + D.

When the price of good A is $50, the quantity demanded of good A is 500 units. When the price of good A rises to $70, the quantity demanded of good A falls to 400 units. Using the midpoint method, the price elasticity of demand for good A is

0.67, and an increase in price will result in an increase in total revenue for good A

Using the midpoint method, what is the price elasticity of supply between point B and point C? 7, 250 6, 200

1.44

For a small country called Boxland, the equation of the domestic demand curve for cardboard is QD = 200 − 2P, where QD represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a ton of cardboard. For Boxland, the equation of the domestic supply curve for cardboard is QS = -60 + 3P, where QS represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard. ​ ​ Refer to Scenario 9-1. Suppose the world price of cardboard is $45 and international trade is allowed. Then Boxland's consumers demand

110 tons of cardboard and Boxland's producers supply 75 tons of cardboard.

A $1.50 tax levied on the buyers of pomegranate juice will shift the demand curve

downward by exactly $1.50

With trade, total surplus in the Guatemalan coffee market amounts to

1870

The price that Chad paid for a latte on the first day is

3.75

Both the demand curve and the supply curve are straight lines. If the price is $4 but only 6 units are bought and sold, consumer surplus will be

36

Both the demand curve and the supply curve are straight lines. If the price is $4 but only 6 units are bought and sold, total surplus will be

54

Which of the following statements is not correct?

A government-imposed price of $10 would be a binding price ceiling if market demand is either Demand A or Demand B.

When a tax is imposed on the buyers of a good, the demand curve shifts

downward by the amount of the tax

With trade, Guatemala will

export 22 units of coffee

What happens to the total surplus in a market when the government imposes a tax?

Total surplus decreases.

Graph (a) and Graph (b) each illustrate a $4 tax placed on a market. In comparison to Graph (a), Graph (b) illustrates which of the following statements?

When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic.

Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

between 5 and 7

A tax affects

buyers, sellers, and the government

When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,

consumer surplus decreases and total surplus increases in the market for that good. wrong

The decrease in total surplus that results from a market distortion, such as a tax, is called a

deadweight loss

The supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tax increase decreases the demand for both goods by 10 percent. The equilibrium price will:

decrease in both the aged cheddar cheese and bread markets.

If the government removes a tax on a good, then the price paid by buyers will

decrease, and the price received by sellers will increase.

The supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tax increase decreases the demand for both goods by 10 percent.Total consumer spending on aged cheddar cheese will:

decrease, and total consumer spending on bread will decrease

The world price of a ton of steel is $1,000. Before Russia allowed trade in steel, the price of a ton of steel there was $650. Once Russia allowed trade in steel with other countries, Russia began

exporting steel and the price per ton in Russia increased to $1,000

The country for which the figure is drawn

has a comparative advantage relative to other countries in the production of crude oil and it will export crude oil

If, holding the supply curve fixed, there were an increase in demand that caused the equilibrium price to increase from $6 to $7, then sellers' total revenue would

increase

Suppose the government increases the size of a tax by 20 percent. The deadweight loss from that tax

increase by more than 20 percent

The price ceiling shown in graph (a)

is not binding or creates a surplus

At a price of $2.00, total surplus is

larger than it would be at the equilibrium price. wrong

A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it

maximizes the combined welfare of buyers and sellers.

When the nation of Worldova allows trade and becomes an exporter of silk,

residents of Worldova who produce silk become better off; residents of Worldova who buy silk become worse off; and the economic well-being of Worldova rises

Which of the following causes the price paid by buyers to be different than the price received by sellers?

tax on good

Jerome says that he will spend exactly $25 each month on new apps for his mobile device, regardless of the price of apps. Jerome's demand for apps is

unit elastic