macroeconomics

Refer to Table 7-2. If there is only one unit of the good and if the buyers bid against each other for the right to purchase it, then the good will sell for

$35 or slightly more.

If a binding price floor is imposed on the video game market, then

.a surplus of video games will develop.

If the tax on a good is increased from $1 per unit to $4 per unit, the deadweight loss from the tax increases by a factor of

16

Which of the following is not correct?

A minimum wage would be binding for workers with high skills and much experience.

Refer to Figure 8-4. The tax causes consumer surplus to decrease by the area

A wrong

Refer to Figure 7-6. When the price is P 2, producer surplus is

A+B+C

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling is established,

a smaller quantity of the good is bought and sold

A surplus results when a

binding price floor is imposed on a market

Suppose there is an early freeze in California that reduces the size of the lemon crop. As the price of lemons rises, what happens to consumer surplus in the market for lemons?

consumer surplus decreases

Suppose the government imposes a tax on cheese. The deadweight loss from this tax will likely be greater in the

eighth year after it is imposed than in the first year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year.

When the demand for a good increases and the supply of the good remains unchanged, consumer surplus

may increase, decrease, or remain unchanged.

A tax on an imported good is called a

tariff

Concerning the labor market and taxes on labor, economists disagree about

the size of the deadweight loss of the tax on labor.

Refer to Figure 5-7 . Using the midpoint method, what is the price elasticity of supply between point B and point C?

1.44

If the price elasticity of supply is 1.5, and a price increase led to a 1.8 percent increase in quantity supplied, then the price increase is about

1.8/1.5= 1.2 percent

If the sellers bid against each other for the right to sell the good to a consumer, then the good will sell for

100 or slightly less

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

2$

If the price elasticity of demand for a good is 2.0, then a 10 percent increase in price results in a

20 percent decrease in the quantity demanded

Refer to Figure 7-7. If the government imposes a price ceiling of $55 in this market, then total surplus will be

250$

. Government revenue raised by the tariff is represented by the area

E

you and your college roommate eat three packages of Ramen noodles each week. After graduation last month, both of you were hired at several times your college income. You still enjoy Ramen noodles very much and buy even more, but your roommate plans to buy fewer Ramen noodles in favor of foods she prefers more. When looking at income elasticity of demand for Ramen noodles, yours would

be positive, and your roommate's would be negative

Dawn's bridal boutique is having a sale on evening dresses. The increase in consumer surplus comes from the benefit of the lower prices to

both existing customers who now get lower prices on the gowns they were already planning to purchase and new customers who enter the market because of the lower prices.

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

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

. A government-imposed price of $12 in this market is an example of a

non binding that creates a surplus

In this market, a minimum wage of $7.00 is

nonbinding and creates neither a labor shortage nor unemployment. wrong

The loss of consumer surplus associated with some buyers dropping out of the market as a result of the tax is

$1.50

If the price of natural gas rises, when is the price elasticity of demand likely to be the highest?

One year after the price increase

On a graph, consumer surplus is represented by the area

below the demand curve and above price.

With trade, this country

imports 320 tricycles

Goods with many close substitutes tend to have

more elastic demands.

The size of a tax and the deadweight loss that results from the tax are

positively related

Which of the following statements is not correct concerning government attempts to reduce the flow of illegal drugs into the country? Drug interdiction

shifts the demand curve for drugs to the left.

. If the government imposes a price ceiling at $6, it would be

nonbinding if market demand is Demand A and binding if market demand is Demand B.

For each of the three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day. ​The market quantity of oranges demanded per day is exactly seven if the price of an orange, P, satisfies

$0.25 < P < $0.60.

At Nick's Bakery, the cost to make a cheese danish is $1.50 per danish. As a result of selling 10 danishes, Nick experiences a producer surplus in the amount of $20. Nick must be selling his danishes for

3.50 each

In the market for widgets, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for widgets is 200 per month when there is no tax. Then a tax of $5 per widget is imposed. As a result, the government is able to raise $800 per month in tax revenue. We can conclude that the equilibrium quantity of widgets has fallen by

50 per month wrong

Consumer surplus in this market before trade is

A

Total surplus in this market before trade is

A + B + C.

For which of the following goods is the income elasticity of demand likely highest? a.Housing b.Diamonds c.Hamburgers d.Water

Diamonds

For a particular good, a 2 percent increase in price causes a 12 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?

The good is a luxury

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.

Refer to Figure 8-3 . As a result of the tax,

a.producer surplus decreases from $200 to $145.b.total surplus increases from $180 to $200.c.the market experiences a deadweight loss of $80.d.consumer surplus decreases from $200 to $80.wrong

When a country that imports a particular good imposes a tariff on that good,

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

A binding price ceiling is shown in

graph b only (shortage)

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 change in equilibrium quantity will be

greater in the bread market than in the aged cheddar cheese market.

The problem with the protection-as-a-bargaining-chip argument for trade restrictions is

if it fails, the country faces a choice between two bad options

Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began

importing televisions and the price of a television in Paraguay decreased to $300

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

supply curve will shift downward by $20, and the effective price received by sellers will increase by $20. wrong

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

supply, raising the equilibrium price and lowering the equilibrium quantity in the market for artificially sweetened beverages.