micro exam 2

use the supply curve for bottles of dish soap in the graph to answer the question. if 15 bottles are sold at a price of $8, what is the producer surplus on the last unit sold?

$0

suppose that the world price of TVs is $500 and the government imposes a $100 tariff. according to the figure, the tariff causes total surplus to decrease by:

$1,500,000

according to the figure, if there is international trade in this market and the world price of an engine is $1,000, the value of the consumer surplus is:

$160,000

use the graph of a demand curve for jars of laundry detergent to answer the question. what is the total consumer surplus if 50 jars are sold at a price of $6?

$350 (look at the area below demand curve and above the price)

use the market graph for pairs of socks to answer the question. the sock market is at equilibrium. how much economic surplus is being generated in the sock market? equilibrium is at (15, $8) supply intersects y-axis at (0, $4) demand intersects y-axis at (0, $10)

$45 (economic surplus = producer surplus + consumer surplus)

Chin purchases five protein bars at a price of $3 each. the marginal benefit he receives from each bar is $5 for the first bar, $4.50 for the second bar, $4 for the third bar, $3.50 for the fourth bar, and $3 for the fifth bar. the marginal cost of producing the bars is $2.50 each. what is chin's total consumer surplus from the five bars that he purchased?

$5 (consumer surplus = marginal benefit - price)

according to the figure, if there is international trade in this market, and the world price of an engine is $1,000, the value of the domestic producer surplus is: equilibrium is at (600, 800)

$500,000

in the market for pesticides shown here, the original equilibrium price is $25. in an effort to reduce the usage of pesticides, a tax is then placed on the buyers in this market. the economic burden of this tax on the buyer is $____. old demand (9,000, $27) supply and new demand intersect (9,000, $19) supply and old demand intersect (15,000, $25)

2

The world price of TVs is $300, and the government imposes a $100 tariff. According to the figure, domestic consumers purchase _____ units from domestic producers and _____ units from foreign producers after the tariff.

20,000; 60,000

Consider the market for furniture made from sustainable, man-made forests that is shown in the figure. The government wants to encourage buyers to buy such furniture and places a price ceiling of $250 on the market. After the implementation of the price ceiling, the market quantity sold falls by _____ thousand units. equilibrium (500, $350) supply and price ceiling intersect (300, $250) demand and price ceiling intersect (700, $250)

200

In the market for pesticides shown here, the original equilibrium price is $25. In an effort to reduce the usage of pesticides, a tax is then placed on the buyers in this market. The economic burden of this tax on the seller is $ _____. old demand (9,000, $27) supply and new demand intersect (9,000, $19) supply and old demand intersect (15,000, $25)

6

according to the figure, if there is international trade in this market, and the world price of televisions is $500, the quantity demanded is _____, and the quantity supplied is _____ at the world price. equilibrium is at (60, 600) at 500 supply is (40, 500) at 500 demand is (70, 500)

70,000; 40,000

in 2018, the state of kentucky raised the tax on cigarettes by 50 cents per pack. holding all else constant, the effect of this tax would be to ______ in Kentucky. decreasing prices of cigarettes increase sales of cigarettes increase profits for stores selling cigarettes decreasing smoking of cigarettes

decrease smoking of cigarettes

deadweight loss =

economic surplus at efficient quantity - actual economic surplus

opportunity cost of a task =

hours this task takes / hours required to produce alternative output

A tax on sellers causes which of the following? (i) a leftward shift of the supply curve (ii) a decrease in quantity sold (iii) an increase in the price buyers pay

i, ii, iii

which of the following is an argument for limiting international trade? an increase in international trade may: -reduce specialization, which has national security benefits -reduce the amount of outsourcing by domestic firms -lead to anticompetitive practices, such as dumping -lead to economic growth, stemming from specialization

lead to anticompetitive practices, such as dumping

vietnam has a comparative advantage in _____-skilled labor. this explains why vietnam is a net _____ of manufactured goods

low, exporter

consumer surplus =

marginal benefit - price

marginal social benefit =

marginal private benefit + marginal external benefit

marginal social cost =

marginal private cost + marginal external cost

producer surplus =

price - marginal cost

economic surplus =

producer surplus + consumer surplus

(Figure: Unemployment Rates) This figure shows the relationship between countries' unemployment rates and the share of national income spent on imports. From this figure, we can determine that the United States _____ relative to other countries. spends a small share of income on imports spends a small share of income on exports employs a larger number of workers has a large unemployment rate

spends a small share of income on imports

Refer to the labor market shown here. A minimum wage of $18 per hour is introduced. The implementation of the minimum wage leads to a _____ of _____ workers. demand at $18 (20,000, $18) supply at $18 (36,000, $18)

surplus of 12,000

in the market for pesticides shown here, the original equilibrium price is $25. in an effort to reduce the usage of pesticides, a tax is then placed on the buyers in this market. who bears the statutory burden of this tax? the seller the buyer the government the people who make the law on taxes

the buyer

which of the following claims reflects normative analysis? -the minimum wage should be higher so that workers earn a living wage -higher prices mean that the purchasing power of income falls -if the minimum wage were higher, companies that employ minimum wage workers have higher costs -fewer people will buy cars if their price rises

the minimum wage should be higher so that workers earn a living wage