Econ

#4 (In class) Erin would be willing to pay as much as $100 per seek to have her house cleaned. Arneson's opportunity cost of cleaning Erin's house is $70 per week. If Erin pays $90 to clean her house, Erin's consumer surplus is?

$10

#2 (In class)The vertical distance between points A and B represents a tax in the market The deadweight loss associated with the tax amounts to?

$80, buyers and sellers

#5 (In class) Luis, Mina, and Daniel all would lake a play area while waiting at their children's bus stop. The neighborhood association is considering installing equipment at the bus stop. Luis values the equipment at $150, Mina values the equipment at $100, and Daniel values the equipment at $100. The equipment and labor for installation cost $300. If Luis, Mina, and Daniel are the only residents who value the equipment, what should the neighborhood association do?

Install the equipment because the benefits outweigh the cost

#3 (In class) Kate is a personal trainer whose client, William, pays $80 per hour-long session. William values that service at $100 per hour, while the opportunity cost of Kate's time is $75 per hour. The government puts a tax of $10 per hour on personal trainers. After the tax, what is likely to happen in the market for personal trainers.

Kate and William will agree to a new price somewhere between $85 and $100

#1 (in class) Assume the price of gasoline is $2.00 per gallon, and the equilibrium quantity of gasoline is 10 million gallons per day with no tax on gasoline. Starting from this initial situation, which of the following scenarios would result in the largest deadweight loss?

The price elasticity of demand for gasoline is 0.2; the price elasticity of supply for gasoline is 0.6; and the gasoline tax amounts to $0.30 per gallon.

Refer to Figure 10-2. If this market is currently producing at Q4, then total economic well-being would be maximized if output Select one: a.decreased to Q2. b.decreased to Q3. c.decreased to Q1. d.stayed at Q4.

a.decreased to Q2.

The vertical distance between points C and D represents a tax in the market. ​Refer to Figure 8-2. The amount of deadweight loss as a result of the tax is Select one: a.$24. b.$10. c.$16. d.$10.

b.$10.

Refer to Figure 10-1. This graph represents the tobacco industry. The socially optimal price and quantity are Select one: a.$6.21 and 76 units, respectively. b.$9.00 and 60 units, respectively. c.$8.40 and 48 units, respectively. d.$4.50 and 100 units, respectively.

c.$8.40 and 48 units, respectively.

Refer to Figure 9-6. The deadweight loss created by the tariff is represented by the area Select one: a.B. b.B + D + E + F. c.D + F. d.D + E + F.

c.D + F.

Flu shots provide a positive externality. Suppose that the market for vaccinations is perfectly competitive. Without government intervention in the vaccination market, which of the following statements is correct? Select one: a.A per-shot tax could turn an inefficient situation into an efficient one. b.The current output level is inefficiently high. c.At the current output level, the marginal social cost exceeds the marginal private cost. d.At the current output level, the marginal social benefit exceeds the marginal private benefit.

d.At the current output level, the marginal social benefit exceeds the marginal private benefit.

When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy, Select one: a.consumer surplus decreases and total surplus increases in the market for that good. b.consumer surplus increases and total surplus increases in the market for that good. c.consumer surplus increases and total surplus decreases in the market for that good. d.consumer surplus decreases and total surplus decreases in the market for that good.

d.consumer surplus decreases and total surplus decreases in the market for that good.

Cost is a measure of the Select one: a.seller's producer surplus. b.producer shortage. c.seller's willingness to sell. d.seller's willingness to buy.

seller's willingness to sell.

Efficiency in a market is achieved when Select one: a.all firms are producing the good at the same low cost per unit. b.a social planner intervenes and sets the quantity of output after evaluating buyers' willingness to pay and sellers' costs. c.no buyer is willing to pay more than the equilibrium price for any unit of the good. d.the sum of producer surplus and consumer surplus is maximized.

the sum of producer surplus and consumer surplus is maximized.

Under which of the following scenarios would a park be considered a common resource? Select one: a.Visitors can enter the park free of charge, but frequently all of the picnic tables are in use. b.Visitors to the park must pay an admittance fee and frequently all of the picnic tables are in use. c.Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables. d.Visitors can enter the park free of charge and there are always plenty of empty picnic tables.

a.Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.

Anh is a single mother of two young children who spend their days at a daycare center while Becca goes to work. The daycare center closes at 5:30. If parents do not pick up their children at or before 5:30, the daycare center charges a late fee of $5 for every 10 minutes the parent is late. Refer to Scenario 11-1. Due to traffic, Anh expects to be 40 minutes late to pick up his children. Which of the following most accurately describes the set of prices that he would be willing to pay for a variable toll road that would get him to the daycare center on time? Select one: a.Anh would not be willing to pay out of pocket to avoid traffic. b.Any price less than $20.00 c.Any price less than $30.00 d.Any price less than $25.00

b.Any price less than $20.00

​ Refer to Figure 11-1. Emma's use of good x does not affect anyone else's use of good x. Neither Emma nor anyone else can be prevented from using the good. Good x is an example of the type of good that belongs in Select one: a.Box A, which represents private goods. b.Box D, which represents public goods. c.Box B, which represents common resources. d.Box C, which represents common resources.

b.Box D, which represents public goods.

Refer to Figure 9-4. A result of this country allowing international trade in crude oil is as follows: Select one: a.The effect on the well-being of domestic crude-oil consumers is unclear in that they now buy more crude oil, but at a higher price per barrel. b.The well-being of domestic crude-oil producers is now higher in that they now sell more crude oil at a higher price per barrel. c.The effect on the well-being of the country is unclear in that domestic producer surplus increases, while the effect on domestic consumer surplus is unclear. d.domestic consumers lose by more than domestic producers gain.

b.The well-being of domestic crude-oil producers is now higher in that they now sell more crude oil at a higher price per barrel.

When a tax is imposed on a good, the Select one: a.demand curve for the good always shifts. b.equilibrium quantity of the good always decreases. c.supply curve for the good always shifts. d.amount of the good that buyers are willing to buy at each price always remains unchanged.

b.equilibrium quantity of the good always decreases.

If the size of a tax increases, tax revenue Select one: a.decreases. b.may increase, decrease, or remain the same. c.increases. d.remains the same.

b.may increase, decrease, or remain the same.

On hot summer days, electricity-generating capacity is sometimes stretched to the limit. At these times, electric companies may ask people to voluntarily cut back on their use of electricity. An economist would suggest that Select one: a.it would be more efficient to force everyone to cut their usage of electricity by the same amount. b.it would be more efficient to have a lottery to decide who had to cut back their use of electricity at peak times. c.it would be more efficient if the electric company raised its rates for electricity at peak times. d.every electric customer has an incentive to prevent the system from overloading, so this voluntary approach is the most efficient.

c.it would be more efficient if the electric company raised its rates for electricity at peak times.

Refer to Figure 8-7. If the government changed the per-unit tax from $5.00 to $2.50, then the price paid by buyers would be $7.50, the price received by sellers would be $5, and the quantity sold in the market would be 1.5 units. Compared to the original tax rate, this lower tax rate would Select one: a.increase government revenue and decrease the deadweight loss from the tax. b.decrease government revenue and increase the deadweight loss from the tax. c.increase government revenue and increase the deadweight loss from the tax. d.decrease government revenue and decrease the deadweight loss from the tax.

d. decrease government revenue and decrease the deadweight loss from the tax.

Refer to Figure 10-4, Graph (b) and Graph (c). The installation of a scrubber in a smokestack reduces the emission of harmful chemicals from the smokestack. Therefore, the external benefit of smokestack scrubber installation is represented by Select one: a.P3a − P3b. b.Q5 − Q4. c.Q3 − Q2. d.P4a − P4b.

d.P4a − P4b.

Spain is an importer of computer chips, taking the world price of $10 per chip as given. Suppose Spain imposes a $5 tariff on chips. Which of the following outcomes is possible? Select one: a.Fewer Spanish-produced chips are sold in Spain. b.Total surplus in the Spanish chip market increases. c.Spanish consumers and producers of chips gain. d.Spanish consumers of chips lose and Spanish producers of chips gain.

d.Spanish consumers of chips lose and Spanish producers of chips gain.

Henry is willing to pay 45 cents, and Janine is willing to pay 55 cents, for 1 pound of bananas. When the price of bananas falls from 50 cents a pound to 40 cents a pound, Select one: a.Henry experiences an increase in consumer surplus, but Janine does not. b.neither Janine nor Henry experiences an increase in consumer surplus. c.Janine experiences an increase in consumer surplus, but Henry does not. d.both Janine and Henry experience an increase in consumer surplus.

d.both Janine and Henry experience an increase in consumer surplus.

If a consumer places a value of $13 on a particular good and if the price of the good is $16, then the Select one: a.price of the good will fall due to market forces. b.market is not a competitive market. c.consumer enjoys consumer surplus if he or she buys the good. d.consumer does not purchase the good.

d.consumer does not purchase the good.