Exam 2

Ivana produces cookies. Her production costs is $6 per dozen. Her producer surplus is

$2

A supply curve can be used to measure producer surplus because it reflects

Sellers's costs

The deadweight loss from a $2 tax will be smallest in a market with

elastic demand and inelastic supply

Data indicates that the minimum wage law has

reduced employment, particularly among young workers and minorities

The virtual diff between A and B represents a tax on the market. GRAPH. The DWL associated to the tax amounts to

$40, represents mutually advantageous activities, trades

Consumer surplus if the price is $100?

2,500

When the tax imposed in this market, consumer surplus is

900

Which of the following statements is not correct?

A seller would refuse to sell her product at a price lower than her cost since sellers cannot set the price of their product.

Suppose a tax is imposed on the buyers of fast food French fries, the burden of the new tax

Can be shared by the buyers and sellers of fast food French fries but not necessarily equal.

Dallas buys strawberries and he would be willing to pay more than he normally pays, but now he likes strawberries more, then...

Dallas's consumer surplus would increase

1. Historically, rent controls have caused _____ in the markets, where they exist

Housing shortages

When a tax is placed on the buyers of a product, a result is that buyers effectively pay

More than before the tax, and sellers effectively receive less than before the tax

2. Suppose the equilibrium price of a tube of toothpaste is $2, and the government impose a price floor of $3 per tube.

Quantity demanded of toothpaste decreases, the quantity of toothpaste that firms want to supply increases.

3. The minimum wage does not apply to:

Unpayed internships

Total Surplus?

all of the above are correct

Consumer surplus is the

amount a consumer is willing to pay minus the amount the consumer actually pays

If a labor market is characterized by a labor union, wages will be _____ and employment will be ____ than in a purely competitive labor market model

higher, lower

1. If the government removes a tax on a good, then the quantity of the good sold will ____________. If the government puts a tax on a good, quantity ____________

increase, decrease

An income in the size of a tax, is most likely to increase tax revenues in a market with

inelastic demand and inelastic supply

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

is set above the equilibrium price

Data indicates that government agricultural price supports have___

led to food surpluses

The more freedom people are given to choose the date of their retirement, the

more elastic the supply of labor

When a tax is placed on the sellers of computers

the burden of the tax will be shared by the buyers and the sellers, but the division is not always equal