ASSESS Chapter 6 Chapter Problems
The table shows the demand and supply schedules for sandwiches. What is the equilibrium price, and the consumer surplus and the producer surplus on sandwiches? What is the efficient quantity of sandwiches? The equilibrium price of a sandwich is $___ and the efficient quantity of sandwiches is ___. The consumer surplus on sandwiches is $___. The producer surplus on sandwiches is $___.
4 320 640 640
The table shows the demand schedule for personal trainer services and the supply schedule of personal trainer services. How many personal trainer hours are bought, what is the value of an hour, and what is the total surplus from the hours bought? ___ personal trainers hours a day are bought. The value of the last hour of personal trainer services bought is $___. The total surplus from haircuts is $___.
40 60 1600
The table shows the demand and supply schedules for calculators. If the quantity demanded of calculators decreases by 60 an hour at each price, what is the equilibrium price and what is the change in total surplus? If the quantity demanded of calculators decreases by 60 per hour at each price, the new price of a calculator is $___. Total surplus ____ by $___.
6 decreases 420
The table on the right shows the demand and supply schedules for tacos. If the quantity supplied of tacos decreases by 200 an hour at each price, what is the equilibrium price and what is the change in total surplus? If the quantity supplied of tacos decreases by 200 per hour at each price, the new price of a taco is $___. Total surplus ____ by $___.
6 decreases 600
The table shows the demand and supply schedules for tacos. If Tacos To Go, Inc. buys all the taco producers and cuts production to 40 tacos an hour, what is the deadweight loss that is created? If Tacos To Go rations tacos to two per person, by what view of fairness would the allocation be unfair? If Tacos To Go, Inc. buys all the taco producers and cuts production to 40 tacos an hour, the deadweight loss that is created is $___. If Tacos To Go, Inc. then rations tacos to two per person, this distribution of tacos is ______. A. fair according to both the fair-rules view and the fair-result view of fairness B. fair because everyone who wants a taco receives one C. fair to all producers because they have sold their businesses to Tacos To Go at the highest possible price D. not fair according to the fair-result view of fairness because not everyone who wants a taco receives one, and fair according to the fair-rules view of fairness because all exchanges are voluntary E. not fair according to the fair-rules view of fairness because some people want more than two
80 D. not fair according to the fair-result view of fairness because not everyone who wants a taco receives one, and fair according to the fair-rules view of fairness because all exchanges are voluntary
Read the Eye on Ticket Scalping in the eText or click on the icon to open a copy. Now answer the following questions: Kawhi's buzzer-beating shot sends Raptor's ticket prices soaring Kawhi Leonard's buzzer-beating basket against the Philadelphia 76ers was very close to a miracle. So is getting a cheap ticket for the Toronto Raptors' home games in the next round of playoffs. The least expensive ticket in Milwaukee is $87, but it is $245 for Game 3 in Toronto. Source: Bloomberg, May 15, 2019 Why is the $245 ticket price like ticket scalping? Is the high price an example of the market price method of allocating scarce resources? Is the market for tickets efficient? Is it fair? The $245 ticket price is similar to ticket scalping because this ticket price ______. A. is the price in the resale market that is higher than the original box-office price B. exceeds the basketball team's marginal cost C. is more than most people can afford D. gives the Raptors excessive profits from resold tickets This ticket price would be an example of using market price to allocate scarce seats if ______. A. the first people who want the tickets get the tickets B. everyone has an equal chance of getting a ticket C. it is the price at which the quantity of tickets demanded equals the quantity of tickets supplied D. seniors and children get the first refusal of tickets The market for tickets is _______ and _______ in the fair-result view of fairness. A. efficient; unfair B. inefficient; unfair C. inefficient; fair D. efficient; fair
A. is the price in the resale market that is higher than the original box-office price C. it is the price at which the quantity of tickets demanded equals the quantity of tickets supplied A. efficient; unfair
At McDonald's, no reservations are accepted; at The St. Louis Art Museum Restaurant, reservations are accepted; at Le Bernardin in New York, reservations are essential. What are the methods of allocating table resources in these three restaurants? Le Bernardin in New York allocates scarce table resources by ______ and the St. Louis Art Museum Restaurant allocates scarce table resources by ______. A. majority rule; majority rule B. first-come, first-served; first-come, first-served C. market price; market price and force D. personal characteristics; personal characteristics and first-come, first-served E. a command system; a combination of a command system and first-come, first-served McDonald's allocates scarce table resources by ______. A. first-come, first-served B. a combination of a command system and first-come, first-served C. personal characteristics and first-come, first-served D. sharing equally E. force
B. first-come, first-served; first-come, first-served A. first-come, first-served
Online sellers guide to eBay spring update On eBay, the bidder who places the highest bid wins the auction and pays what the second highest bidder offered. Each spring, eBay updates its rules and fees and in spring 2019 it announced higher fees to start later in the year. Source: EcommerceBytes, May 19, 2019 What method is used to allocate goods on eBay? How does an eBay auction influence consumer surplus on the good traded? How does eBay's fee for service influence consumer surplus? The method use to allocate goods on eBay is _______. A. market price B. majority rule C. personal characteristics D. first-come, first-served E. a lottery When a consumer chooses to buy an item through an eBay auction rather than at Walmart, his consumer surplus on the eBay purchase is _______ the consumer surplus he would get on the Walmart purchase. A. greater than B. less than C. equal to eBay's fee for service _______. A. decreases because the demand for goods on eBay decreases B. increases because the equilibrium price falls and the equilibrium quantity increases C. decreases because the equilibrium price rises and the equilibrium quantity decreases D. does not change because consumers prefer on-line shopping to bricks-and-mortar shopping
A. market price A. greater than C. decreases because the equilibrium price rises and the equilibrium quantity decreases
Read the Eye on Ticket Scalping in the eText or click on the icon to open a copy. Now answer the following question: Why is the allocation of tickets inefficient if the re-selling of tickets is made illegal? The allocation of tickets is inefficient if the re-selling of tickets is made illegal because _______. A. the secondary (resale) market closes and the total surplus in that market is lost B. total surplus in the primary market is less than total surplus in the secondary (resale) market C. illegal markets are always efficient D. the supply of tickets in the primary market is perfectly inelastic E. less than the efficient number of people buy tickets
A. the secondary (resale) market closes and the total surplus in that market is lost
The table shows the demand and supply schedules for sandbags before and during a major flood. If the government takes no action, would the outcome be efficient? If the government takes no action, the allocation of resources is ______ before the flood and ______ during the flood. A. efficient; efficient B. inefficient; inefficient C. efficient; inefficient D. inefficient; efficient E. sometimes efficient and sometimes inefficient; sometimes efficient and sometimes inefficient; With government intervention that leads to overproduction, the outcome is ______ efficient. A. less B. sometimes less and sometimes more C. more
A. efficient; efficient A. less
The table shows the demand and supply schedules for sandbags before and during a major flood. During the flood, suppose the government gave all families an equal quantity of sandbags. Resale of sandbags is not permitted. How would total surplus and the price of a bag change? Suppose the government buys the equilibrium quantity of sandbags determined by demand and supply during the flood. Total surplus is ______ and the price of a bag ______ compared to the pre-flood price. A. maximized; rises B. maximized; falls C. less than the maximum possible; rises D. less than the maximum possible; falls E. maximized; does not change Suppose the government buys more than the equilibrium quantity of sandbags and pays the supply price for this quantity. Total surplus ______ compared to the total surplus when the equilibrium quantity is purchased, and the price of a bag ______ compared to the equilibrium price. A. decreases; rises B. increases; rises C. remains unchanged; remains unchanged D. increases; falls E. decreases; falls
A. maximized; rises A. decreases; rises
At McDonald's, no reservations are accepted; at the St. Louis Art Museum Restaurant, reservations are accepted; at Le Bernardin in New York, reservations are essential. Why do these restaurants have different reservation policies, and why might each restaurant be using an efficient allocation method? The restaurants have different reservation policies and each restaurant might be using an efficient allocation method because Le Bernardin has a ______ table turnover rate and its customers place a ______ value on time. A. high; low B. low; high C. low; low D. high; high McDonald's has a ______ table turnover rate and its customers place a ______ value on time. A. high; low B. low; high C. high; high D. low; low
B. low; high A. high; low
Resellers are trying to turn a profit on Nipsey Hussle memorial tickets Free memorial tickets, given to fans, were scooped up and within minutes, some appeared on a secondary site for more than $400. Source: Billboard Magazines, April 10, 2019 Was the allocation of tickets efficient and fair? Is the secondary site selling tickets for more than $400 an example of the market price method of allocating scarce resources? Is the market for this tickets efficient? Is it fair? The initial allocation of free memorial tickets is _______. A. always inefficient B. efficient if the marginal benefit of attending the concert is maximized C. efficient if the marginal benefit of the last ticket provided equals its marginal cost D. efficient if the marginal cost of attending the concert is minimized E. efficient because the tickets are free This initial allocation of free memorial tickets is _______. A. fair by the fair-result view because fans who were willing to line up early received a ticket and fair by the fair-rules view because the tickets were free to everyone B. unfair by the fair-result view because poorer people did not receive the tickets, and fair by the fair-rules view because everyone followed the same rules to get a ticket C. always unfair D. unfair by the fair-result view because people were willing to pay but weren't allowed to and unfair by the fair-rules view because only the who live near the site of the memorial can get a ticket E. always fair The secondary site selling tickets for more than $400 _______ an example of the market price method of allocating scarce resources. This method of allocating tickets is _______. A. is not; inefficient B. is not; efficient C. is; efficient D. is; inefficient E. is; sometimes efficient and sometimes inefficient The secondary market for the memorial tickets is _______ by the results-view of fairness and _______ by the rules-view of fairness. A. unfair; unfair B. unfair; fair C. fair; unfair D. fair; fair
C. efficient if the marginal benefit of the last ticket provided equals its marginal cost B. unfair by the fair-result view because poorer people did not receive the tickets, and fair by the fair-rules view because everyone followed the same rules to get a ticket C. is; efficient B. unfair; fair
The world's largest tulip and flower market Every day over 19 million tulips and flowers are auctioned at the Dutch market called "The Bloemenveiling." These Dutch auctions match buyers and sellers. Source: Tulip-Bulbs.com In a Dutch auction, the auctioneer announces the highest price. If no one offers to buy the flowers, the auctioneer lowers the price until a buyer is found. What method is used to allocate flowers at the Bloemenveiling? The flowers at the Bloemenveiling are allocated by ______. A. majority rule B. command C. market price D. contest E. first-come, first-served
C. market price
In California, farmers pay a lower price for water than do city residents. What is this method of allocation of water resources? Is this allocation of water efficient? Is this use of scarce water fair? why or why not? The water is being allocated by ______. A. market price B. first-come, first-served C. personal characteristics D. majority rule E. contest This allocation of water is ______ because ______. A. efficient; farmers' marginal benefit of water exceeds city dwellers' marginal benefit of water B. inefficient; we always use too much water C. efficient; farmers need access to more water than city dwellers D. inefficient; farmers' marginal benefit of water is less than marginal cost E. inefficient; farmers' marginal benefit of water exceeds marginal cost The fair results view is that this allocation of water is ______; the fair rules view is that the allocation is ______. A. never fair; never fair B. fair if farmers have lower incomes than city dwellers; fair if the transactions are voluntary C. always fair; always fair D. fair if farmers have higher incomes than city dwellers; fair if city dwellers agree that farmers should pay less E. fair if farmers are experiencing drought; unfair because everyone should pay the same price for water
C. personal characteristics D. inefficient; farmers' marginal benefit of water is less than marginal cost B. fair if farmers have lower incomes than city dwellers; fair if the transactions are voluntary
In California, farmers pay a lower price for water than do city residents. If all water in California is sold for the market equilibrium price, would the allocation of water be more efficient? Why or why not? If farmers paid the same price for water as city residents, this new method of allocating water would be ______ efficient because ______. A. more; first-come first-served is the new allocation method and farmers would have to compete with city dwellers for water. The quantity of water farmers use will depend on where they are "in the water line." B. less; farmers' costs will increase and they will produce fewer agricultural products C. more; market price is the new allocation method and farmers would now pay a price at which marginal cost equals marginal benefit. The quantity of water used by farmers will decrease toward the efficient quantity. D. more; a lottery is the new allocation method and farmers would have to compete with city dwellers for water. The quantity of water used depends on who wins the lottery E. less; market price is the new allocation method and farmers would store as much water as possible to help them in times of drought. The quantity of water used by farmers will increase and farm use of water will become even more inefficient.
C. more; market price is the new allocation method and farmers would now pay a price at which marginal cost equals marginal benefit. The quantity of water used by farmers will decrease toward the efficient quantity.
After World War II, returning veterans paid a lower price for college tuition than did civilians. If instead, returning veterans pay the same tuition as civilians, how would the price of professional services, the quantity of professional services, consumer surplus, and producer surplus change? If instead, returning veterans pay the same tuition as civilians, then the price of professional services ______ and the quantity of professional services ______. A. rises; increases B. falls; decreases; C. rises; decreases D. does not change; does not change E. falls; increases; Consumer surplus______ and producer surplus ______. A. decreases; decreases B. increases; increases C. increases; decreases D. decreases; increases E. does not change; does not change
C. rises; decreases A. decreases; decreases
The world's largest tulip and flower market Every day over 19 million tulips and flowers are auctioned at the Dutch market called "The Bloemenveiling." These Dutch auctions match buyers and sellers. Source: Tulip-Bulbs.com In a Dutch auction, the auctioneer announces the highest price. If no one offers to buy the flowers, the auctioneer lowers the price until a buyer is found. How does a Dutch flower auction influence consumer surplus and producer surplus? Are the flower auctions at the Bloemenveiling efficient? With a Dutch flower auction, ______. A. consumer surplus is maximized B. producer surplus is close to or equal to zero C. consumer surplus is relatively large and producer surplus is relatively small D. an individual buyer's consumer surplus is close to or equal to zero and producer surplus is greater than zero if the price exceeds marginal cost E. consumer surplus and producer surplus are both equal to zero The flower auctions at the Bloemenveiling are ______ because ______. A. inefficient; at the quantity traded marginal benefit is greater than marginal cost B. efficient; all the available flowers must be sold because flowers are a perishable good C. efficient; at the quantity traded marginal benefit is greater than or equal to marginal cost D. efficient; at the quantity traded marginal benefit equals marginal cost E. inefficient; all the available flowers must be sold because flowers are a perishable good
D. an individual buyer's consumer surplus is close to or equal to zero and producer surplus is greater than zero if the price exceeds marginal cost D. efficient; at the quantity traded marginal benefit equals marginal cost
At McDonald's, no reservations are accepted; at the St. Louis Art Museum Restaurant, reservations are accepted; at Le Bernardin in New York, reservations are essential. Why don't all restaurants use the market price to allocate their tables? The restaurants don't use market price to allocate their tables because _______. A. each restaurant would have to watch the price of a table at other restaurants to keep competitive B. restaurants would have to advertise the price C. the price of a table for two would necessarily be more than the price of a table for four D. restaurants would have to continually change the supply of tables to keep the price constant E. the price of a table would fluctuate hourly, customer uncertainty would deter patrons, and lower demand would bring lower profit
E. the price of a table would fluctuate hourly, customer uncertainty would deter patrons, and lower demand would bring lower profit
Land-use regulations are obstacles to the California dream According to the 2010 Census, 95 percent of Californians live on just 5.3 percent of the land in the state. Less than 17 percent of the San Francisco Bay Area is developed and California has an acute housing shortage. Most of the undeveloped land is owned by private parties who would develop it if only the government would let them. Source: Los Angeles Daily News, April 3, 2019 If the government relaxed the regulation, how would the price and quantity of housing change? How would consumer surplus and producer surplus in the California housing market change? If the government relaxed the regulation, the price of housing would _______ and the quantity of housing would _______. A. fall; decrease B. fall; either increase or decrease but we don't know for sure C. rise; decrease D. rise; increase E. fall; increase Compared to the situation with the land-use regulations, consumer surplus _______. A. plus producer surplus increase B. plus producer surplus decrease C. decreases and producer surplus increases D. decreases and producer surplus decreases E. increases and producer surplus increases
E. fall; increase A. plus producer surplus increase
The table shows the demand schedule for personal trainer services and the supply schedule of personal trainer services. If all personal trainers agree to charge $80 an hour, how do consumer surplus and producer surplus change? What is the deadweight loss created? When the personal trainers increase the price they charge from $60 an hour to $80 an hour, consumer surplus ____ by $___. When the personal trainers increase the price they charge from $60 an hour to $80 an hour, producer surplus ____ by $___. The deadweight loss when price is $80 an hour is $___.
decreases; 600 increases; 200 400