Microeconomics

Cost refers to a seller's producer surplus

False

A seller would be willing to sell a product ONLY IF the price recieved is less than the cost of production.

False

A supply curve can be used to measure producer surplus because it reflects the actions of sellers.

False

A tax on buyers of popcorn increases the size of the popcorn market.

False

If a tax is imposed on a market with elastic demand and inelastic supply, buyers will bear most of the burden of the tax.

False

If demand decreases, the price of a product, as well as producer surplus increases.

False

If you pay a price exactly equal to your willingness to pay, then your consumer surplus is negative.

False

In the end, tax incidence depends on the legislated burden.

False

Out-of-pocket expences plus the value of the seller's own resources used in production are considered to be the seller's total revenue.

False

Producer surplus equals value to buyers- Amount paid by buyers.

False

Producer surplus is the area under the supply curve to the left of the amount sold.

False

Suppose consumer income increases. If grass seed is a normal good, the equilibrium price of grass seed will decrease, and producer surplus in the industry will decrease.

False

Suppose that a tax is placed on DVD's> IF the seller ends up paying the majority of the tax we know that the demand curve is more inelastic the the supply curve.

False

Suppose that a tax is placed on books. If the buyer pays the majority of the tax we know that the supply curve is more inelastic than the demand curve.

False

The Surgeon General announces that eating chocolate increases tooth decay. As a result, the equilibrium market price of chocolate increases, and producer surplus increases.

False

The area below the demand curve and above the price measures producer surplus.

False

The initial effect of tax on the buyers of a good is on the supply of that good.

False

The marginal seller is the seller who cannot compete with the other sellers in the market.

False

The term tax incidence refers to the Boston Tea Party.

False

Total surplus in a market equals Consumer surplus + producer surplus.

False

Total surplus in a market equals value to buyers- amount paid by buyers.

False

Total surplus in a market is represented by the total area under the demand curve and above the price.

False

Total surplus in a market is the total cost to sellers of providing the goods less the total value to buyers of the goods.

False

WIth the respect of welfare economics, the equilibrium price of a proudct is considered to be the best price because it maximizes total revenue to firm and total utility to buyers.

False

We can say that the allocation of resources is effcient if producer surplus is maximised.

False

Welfare economics is the study of well-being of less fortunate people.

False

When markets fail, public policy can do nothing to improve the situation.

False

Willingness to pay measures the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.

False

A consumer is willing and able tyo pay $20.00 for a particular good but only has to pay $14.00, the consumer surplus is $6.00

True

A demand curve measures a buyer's willingness to pay.

True

A tax on the sellers of cell phones will reduce the size of the cell phone market.

True

A tax placed on the seller of a good raises the price buyers pay and lowers the price sellers receive.

True

A tax placed on the sellers of blueberries increases cost, lowers profit and shifts supple to the left (upward).

True

An allocation of resources is said to be ineffecient if a good is not being produced by the sellers with the lowest cost.

True

At the equilibrium price, the good will be purchased by those buyers who value the good more than the price.

True

Buyers of a product will pay the majority of a tax placed on a product when supply is more elastic then demand.

True

Consumer surplus equals the Value to buyers-amount paid by buyers.

True

Consumer surplus is a buyer's willingness to pay minus the price.

True

Cost is a measure of the seller's willingness to sell.

True

Efficiency occurs when total surplus is maximized.

True

Externalities are side effects passed on to a party other than the buyers and sellers in the market.

True

For the most part, a tax burden falls most heavily on the side of the market that is more inelastic.

True

For the most part, all governments, federal, state, and local, rely on taxes to raise revenue for public purposes

True

For the most part, buyers and sellers share the burden of the tax.

True

If a market is allowed to move freely to its equilibrium price and quantity, then an increase in a supply will increase consumer surplus.

True

If a tax is imposed on the buyer of a product the demand curve would shift downward by the amount of the tax.

True

If a tax is levied on the seller of a product the demand curve will not change.

True

If the price a consumer pays for a product is equal to consumer's willingnes to pay, then them consumer surplus of that purchase would be zero.

True

If the price of a good increases, consumer surplus decreases.

True

In a market, total surplus is equal to producer surplus plus consumer surplus.

True

In most markets, consumer surplus reflects economic well-being.

True

Inefficiency exists in any economy when a good is not being consumed by buyers who value it most highly.

True

Producer surplus measures the well-being of sellers.

True

Suppose the demand for nachos increases. Producer surplus in the market for nachos will increase.

True

Suppose there is an early freeze in California that ruins the lemon crop. Consumer surplus in the market for lemons decreases.

True

The "invisibe hand" refers to the marketplace guiding the self- interests of market participants into promoting general economics well-being.

True

The burden of a tax placed on a product depends on the supply and demand of that product.

True

When a tax is placed on the buyers of milk, the size of the milk market is reduced.

True

When a tax is placed on the sellers of a product the size of the market is reduced.

True

When analyzing the economic effects of government policies, supply and demand are useful tools of analysis.

True

When economists say that markets are efficient, they are assuming that markets are perfectly competitive.

True

When technology improves in the ice cream industry, consumer surplus will increase.

True

total surplus = value to sellers- costs of sellers is NOT correct

True