ECO211 - Microeconomics Midterm #2

Refer to Table 2. The price that Chad paid for a latte on the second day is

$0.50 less than the amount he paid on the first day.

In Table 1, if the price of the book is $135, then the total consumer surplus is

$15

In the figure on the right, the price received by the seller before the tax is_____per blouse, and the price received and kept by the seller after the tax is_____per blouse.

$20; $10

The Three Amigo's company produced and sold 500 dog beds. The average cost of production per dog bed was $50. Each dog bed can be sold for a price of $65. The Three Amigo's total costs are

$25,000

During the last two days, Chad purchased a latte from two different stores. Table 2 below shows Chad's willingness to pay on each day and his consumer surplus from each purchase. The price that Chad paid for a latte on the first day is

$3.75

Jacqui decides to open her own business and earns $50,000 in accounting profit the first year. When deciding to open her own business, she withdrew $20,000 from her savings, which earned 5 percent interest. She also turned down three separate job offers with annual salaries of $30,000, $40,000, and $45,000. What is Jacqui's economic profit from running her own business?

$4,000

Table 3 shows the willingness to sell of 4 fashion design students after they created a little black dress (LBD). If the prevailing price of this kind of LBD is $180, then the total producer surplus is

$40

In Table 4 below, who experiences the largest loss of consumer surplus when the price of the good increases from $20 to $22?

All three buyers experience the same loss of consumer surplus.

Refer to the Figure above. In 1973, OPEC restricted supply and U.S. government regulations limited the price oil companies could charge for gasoline. Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

Buyers of gasoline paid a price of P1 before 1973; they paid a price of P2 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price.

In Table 1, if the price of a rare book is $130, then who would be willing/able to purchase the book?

Calvin and Sam

Suppose your own demand curve for tomatoes slopes downward. Suppose also that, for the last tomato you bought this week, you paid a price exactly equal to your willingness to pay. Then

Your consumer surplus on the last tomato you bought is zero.

When the government imposes a binding price floor, it causes

a surplus of the good to develop

Price ceilings and price floors that are binding

cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price.

As Bubba's Bubble Gum Company adds workers while using the same amount of machinery, some workers may be underutilized because they have little work to do while waiting in line to use the machinery. When this occurs, Bubba's Bubble Gum Company encounters

decreasing marginal product

The figure above portrays a total revenue curve for a perfectly competitive firm. The price of the product in this industry?

equals $2.00

If a nonbinding price ceiling is imposed on a market, then the

quantity sold in the market will stay the same.

Cost is a measure of the

seller's willingness to sell

Refer to figure below. How is the burden of the tax shared between buyers and sellers? Buyers bear

three-fourths of the burden, and sellers bear one-fourth of the burden.

A firm's shutdown point is the quantity and price at which the firm's total revenue just equals its

total variable cost