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
