chapter 6-7 econ

refer to figure 7-9. if the supply curve us S', the demand curve is D', and the equilibrium price is $100, what is the producer surplus

$2,500

refer to figure 7-9. if the supply curve S and the demand curve shifts from D' to D, what is the increase in producer surplus due to new producers entering the market?

$625

refer to figure 7-9. if the supply curve is S, and the demand curve is D, and the equilibrium price $150, what is the producer surplus?

$625

the "invisible hand" is

a concept developed by Adam Smith to describe the virtues of free markets.

consumer surplus is

a good measure of economic welfare if buyers preferences are the primary concern

refer to figure 7-9. if the demand curve is D the supply curve shifts from S' to S, what is the change producer surplus?

producer surplus increases by $1,875

refer to figure 7-2. when the price is P1. consumer surplus is

A+B+D

refer to figure 7-18. if the price decreases from $22 to $16 to a shift in the supply curve consumer surplus increases by

$360

refer to figure 7-18. assume demand increases and as a result, equilibrium price increases to $22 and equilibrium quantity increases to $110. the increase in producer surplus to producers already in the market would be

$480

refer to figure 7-18. at the equilibrium price, consumer is

$480

refer to figure 7-18. at the equilibrium price, total surplus is

$480

refer to figure 7-18. assume demand increases and as a result, equilibrium price increases to $22 and equilibrium quantity increases to $110. the increase in producer surplus would be

$570

refer to figure 7-18. at the equilibrium price, producer surplus is

$640

refer to figure 7-18. assume the demand increases and as a result, equilibrium price increases to $22 and the equilibrium quantity increases by $110. the producer surplus due to new producers entering the market would be

$90

refer to figure 6-14. the effective price that sellers receive after the tax is imposed is

10

refer to figure 6-14. the amount of the tax per unit is

14

refer to figure 7-18. the efficient price is

16 and the efficient quantity is 80

refer to figure 6-14. the price that buyers pay after the tax is imposed is

24

refer to figure 6-14. the per-unit burden on the tax on sellers is

6

refer to figure 6-14. the per-unit burden of the tax on buyers is

8

Tom tunes pianos in his spare time for extra income. Buyers of his service are willing to pay $155 per tuning. One particular week, Tom is willing to tune the first piano for $120, the second piano for $125, the third piano for $140, and the fourth piano for $160. Assume Tom is rational in deciding how many pianos to tune. His producer surplus is

80

refer to figure 7-2. when the price is P2, consumer surplus is

A+B+C

the incidence of a tax falls more heavily on

all of the above are correct

refer to figure 7-2. when the price rises from P1 to P2, which of the following statements is NOT true?

buyers place a higher value on the good after the price increase

total surplus measures the

buyers willingness to pay less then sellers costs

To say that a price ceiling is binding is to say that the price ceiling

causes quantity demanded to exceed quantity supplied

which of the following is not equal to total surplus

consumer surplus - producer surplus

refer to figure 7-2. when the price rises from P1 to P2, consumer surplus

decrease by an amount equal to B+C

refer to figure 7-2. areas C represents

decrease in consumer surplus that results from a downward-sloping demand curve

If the government levies a $1,000 tax per boat on sellers of boats, then the price paid by buyers of boats would

increase by less than $1,000

refer to figure 6-25. in which market will the majority of the tax burden fall on buyers?

market (a)

refer to figure 6-25. in which market will the tax burden be most equally divided between buyers and sellers?

market (b)

refer to figure 6-25. in which market will the majority of the tax burden fall on sellers?

market (c)

which of the ten principles of economics does welfare economics explain more fully

markets are usually a good way to organize economic activity

Assume the demand for cigarettes is relatively inelastic, and the supply of cigarettes is relatively elastic. When cigarettes are taxed, we would expect

most of the burden of the tax to fall on buyers of cigarettes regardless or whether buyers or sellers of cigarettes are required to pay the tax to the government

if a tax is levied on the sellers of a product, then the demand curve will

not shift

in a competitive market free of government regulation

price adjusts until quantity demanded equals quantity supplied

which of the following is NOT a function of prices in a market

prices have the crucial job of balancing supply and demand

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,

quantity demanded of physicals increases, and the quantity supplied of physicals decreases

If a tax is levied on the sellers of a product, then the supply curve will

shift up

welfare economics is the study of how

the allocation of resources affects economic well-being

producer surplus is

the amount a seller is paid minus the cost of production

refer to figure 7-18. if 40 units of the good are being bought and sold then

the cost of sellers is equal to the value to buyers

if the minimum wage exceeds the equilibrium wage, then

the quantity supplied of labor will exceed the quantity demanded

refer to figure 7-18. if 110 units of the good are being bought and sold then

the value to buyers is greater than the cost to sellers