econ test 2
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. The price paid by buyers increases by $2 and the after-tax price received by sellers falls by $3. The government is able to raise $750 per month in revenue from the tax. The deadweight loss from the tax is
125$
at equilibrium price total surplus is
1800
if the market price is 1,000, the producer surplus in the market is
300
Suppose Lauren, Leslie and Lydia all purchase bulletin boards for their rooms for $15 each. Lauren's willingness to pay was $35, Leslie's willingness to pay was $25, and Lydia's willingness to pay was $30. Total consumer surplus for these three would be
35-15=20 25-15=10 30-15=15 add all together = 45
if the equilibrium price raises from 200 to 350, what is the additional producer surplus to new producers?
7500
at the equilibrium price consumer surplus is
900
at the equilibrium price producer surplus is what
900
the vertical distance between point A and point B represents a tax in the market 3. What is the CS, PS, TS, gov. rev, DWL after the tax?
CS- 90 PS-90 TS-1120 gov rev-240 DWL-80
if the government imposes a price ceiling of 2$ on this market, then there will be
a shortage of 30 units
in which of the following situations will total revenue increase
all of the above
when a tax is placed on the sellers of energy drinks, the
burden of the tax will be shared by the buyers and sellers, but the division of the burden is not always equal
the vertical distance between point A and point B represents a tax in the market 2. What is the new buyers price and sellers price? How large is the tax?
buyers price= 32 sellers price = 16 tax is 16$
suppose a tax is placed on books. If the buyers pay the majority of the tax then we know that the demand
demand is more inelastic than supply
suppose the government imposes a 50 cent tax on the sellers of packets of chewing gum. the tax would
discourage market activity
A tax imposed on the sellers of a good will lower the
effective price received by sellers and lower the equilibrium quantity
For any country, if the world price of copper is higher than the domestic price of copper without trade, that country should
export copper, since that country has a comparative advantage in copper
consider a good to which a per unit tax applies. the greater the price elasticity of demand and supply of the good, the
greater the dead weight loss from the tax
welfare economics is the study of
how the allocation of resources affects economic well-being
suppose the government increases the size of a tax by 20%. the dead weight loss from that tax
increases by more than 20%
On a graph, the area above a supply curve and below the price measures
producer surplus
the vertical distance between point A and point B represents a tax in the market 1. What is Ps, CS, and TS before the tax?
ps-250 cs-250 ts-500
the laffer curve was supported and used by which president
ronald reagan
Some firms eventually experience problems with their capacity to produce output as their output levels increase. For these firms,
supply is more elastic at low levels of output and less elastic at high levels of out put
if the government imposes a price floor of 5$ on this market, then there will be a
surplus of 15 units
a tariff is a
tax on an imported good
efficiency is obtained when
total surplus is maximized