Chapter 7 & 8 D1&2 8, 9, 13, 17, 19, 27

If Tammy cleans Ryan's house for $80, Tammy's producer surplus is

$10

The equilibrium price before the tax is imposed is

$16 and the equilibrium quantity is 100

Evonna produces cookies. Her production cost is $6 per dozen. She sells the cookies $8 per dozen. Her producer surplus per dozen cookies is

$2.00

Refer to scenario 8-2 Stephanie's consumer surplus as a result of hiring Tom to mow their lawn

$3

Refer to table 7-2 if the market price is $5.50 the consumer surplus in the market will be

$4.50

Refer to scenario 8-2 Tom's producer surplus as a result of mowing Stephanie's lawn is

$5

Refer to Table 7-5 The equilibrium or market clearing price is

$8 Dollars

Refer to figure 7-3 if the price of the good is $6.00, the consumer surplus is

$8.00

Refer to figure 7-4 which area represents an increase in producer surplus when the price rises from P1 to P2

(A) (F) (E) (B)

Refer to figure 7-4 which area represents producer surplus and when the price is P1

(B) (C) (E)

Brock is willing to pay $400 for a new suit, but he is able to buy the suit for $350. His consumer surplus is

50$

Refer to figure 8-7 The tax causes consumer surplus to decrease by the area.

B + C

Suppose a tax is imposed on the buyers of fast food hamburgers the burden of the tax will

Be shared by the buyers and sellers of fast food hamburgers, but not necessarily equally

Refer to figure 7-6 When the price is P1 producer surplus is

C

Total surplus in a market is equal to

Consumer surplus + Producer surplus

Refer to figure 8-7 the tax causes the producer surplus to decrease by the area

D + F

Refer to table 7-2 If the price of a vanilla coke is $6.90, who will purchase the good

David and Laura

Inefficiency exist in an economy when a good is

Not being produced by the lower cost producers

Assume Ryan is required to pay a tax of $40 when he hires someone to clean his house for a week. Which of the following is correct?

Ryan will now clean his own house

Today's property tax

Taxes land and the improvements to the land

Economists generally agree that the most import tax in the U.S economy is

The tax on labor

Total surplus is equal to

Value to buyers - Cost to sellers

Consider a good to which a per unit tax applies. The size of the dead weight that results from the tax is smaller, the

all the above is correct

The taxes caused dead weight loss is because

all the above is correct

The area below the demand curve and above the price measures

consumer surplus

If the demand for a good or service decreases, producer surplus

decreases

When the price rises from P1 to P2 consumer surplus

decreases by an amount equal to B + C

The french Expression used by free-market advocates, which literally translates as "allow them to do," is

laissez-faire

A tax on a good

raises the price that buyers effectively pay and lowers the price that sellers effectively receive.

For a good that is taxed the area on the relevant supply and demand graph that represents government tax revenue is a

rectangle

The benefit to sellers of participating in a market is measured by

the producer surplus

A seller is willing to sell a product only if a seller receives a price that is at least as great as

the sellers cost of production

According to the economist Milton Friedman, the least bad tax is a tax on

the unimproved value of land

Producer surplus directly measures

the well being of sellers

Suppose the tax is levied on the buyers of a good

this means that the buyers of the good will send their payments to the government