ECON 2302 EXAM 2 REVIEW
Creates a deadweight loss of of $15 per day
A tax of $0.25 is imposed on each bag of potato chips that is sold. The tax decreases producer surplus by $600 per day, generates tax revenue of $1,220 per day, and decreases the equilibrium quantity of potato chips by 120 bags per day. The tax...?
One person's actions on the well-being of a bystander
An externality is the uncompensated impact of...?
Increases the value of other properties in the neighborhood
Ashlyn installed a wooden sculpture in her front yard. A positive externality arises if the sculpture...?
Other countries have a comparative advantage over Brazil and Brazil will import apples
Assume, for Brazil, that the domestic price of apples without international trade is higher than the world price of apples. This suggests that, in the production of apples...?
Seller's willingness to sell
Cost is a measure of the...?
Dallas' consumer surplus would increase
Dallas buys strawberries, and he would be willing to pay more than he now pays. Suppose that Dallas has a change in his tastes such that he values straw berries more than before. If the market price is the same as before...?
Both existing customers who now get lower prices on the gowns they were already planning to purchase and new customers who enter the market because of the lower prices.
Dawn's bridal boutique is having a sale on evening dresses. The increase in consumer surplus comes from the benefit of the lower prices to...?
T X Q
If T represents the size of the tax on a good and Q represents the quantity of the good that is sold, total tax revenue received by government can be expressed as...?
We cannot infer anything because the shift described is not consistent with a tax
If a tax shifts the supply curve downward...?
Moldova is a price taker
In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that...?
The tax on airline tickets increases from $20 per ticket to $60
In which of the following instances would the deadweight loss of the tax on airline tickets increase by a factor of 9?
Cost of building furniture
Justin builds furniture for a living. Justin's out-of-pocket expenses (for wood, paint, etc.) plus the value that he places on his own time amount to his...?
May increase, decrease, or remain unchanged
Motor oil and gasoline are complements. If the price of motor oil increases, consumer surplus in the gasoline market
May increase, decrease, or remain unchanged
Suppose televisions are a normal good and buyers of televisions experience a decrease in income. As a result, consumer surplus in the television market...?
The equilibrium quantity is less than the socially optimal quantity
Suppose that cookie producers create a positive externality equal to $2 per dozen. What is the relationship between the equilibrium quantity and the social optimal quantity of cookies to be produced?
Inelastic supply snd inelastic demand
The deadweight loss from a tax per unit of good will be smallest in a market with...?
Tax revenue
The government's benefit from a tax can be measured by...?
Is based on the belief that protecting industries when they are young will pay off later
The infant industry argument...?
Exporting almonds and the price per pound in Uruguay increased to $4.50
The world price of a pound of almonds is $4.50. Before Uruguay allowed trade in almonds, the price of a pound of almonds there was $3.00. Once Uruguay began allowing trade in almonds with other countries, Uruguay began...?
Importing steel and the price per ton in Russia decreased to $650
The world price of a ton of steel is $6.50. Before Russia allowed trade in steel, the price of a ton of steel there was $1,000. Once Russia allowed trade in steel with other countries, Russia began...?
The price paid by domestic consumers of silk decreases
When a country allows trade and becomes an exporter of silk, which of the following is not a consequence?
Producer surplus increases and total surplus decreases in the market for that good
When a country that imports a particular good imposes a tariff on that good...?
Equilibrium quantity of the good always decreases
When a tax is imposed on a good, the...?
Sellers' costs stay the same and the price of the good increases
Which of the following events would increase producer surplus?
Allowing firms to trade their permits reduces the total quantity of pollution beyond the initial allocation
Which of the following is not a characteristic of pollution permits?
More buyers enter the market
Which of the following is true when the price of a good or service falls?
Corrective taxes set the maximum quantity of pollution, whereas tradable pollution permits fix the price of pollution
Which of the following statements is not correct?
The government cannot improve upon the outcomes of private markets
Which of the following statements is not correct?
Producers of steel and consumers of incense
Zelzar has decided to end its policy of not trading with the rest of the world. When it ends it's trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. Which groups in Zelzar are better off as a result of the new free-trade policy?
