LAST ONE BABY

The amount of deadweight loss caused by the tariff equals

$100

The firm will earn zero economic profit if the market price is

$6

The market equilibrium quantity of output is

6 units.

Suppose the town enacts new antitrust laws that prohibit Rochelle and Alec from operating as a monopoly. How many gallons of water will be produced and sold once Rochelle and Alec reach a Nash equilibrium?

800

Which of the following combinations will maximize the deadweight loss from a tax?

Supply2 and Demand2

Suppose the government imposes a tax of P' - P'''. The area measured by J represents

consumer surplus after the tax.

When the tariff is imposed, domestic consumers

lose surplus of $450.

Given this firm's cost curves, if the firm were perfectly competitive rather than monopolistically competitive, then in a long-run equilibrium it would produce

more than 133.33 units of output

If the price were $8, a

surplus of 25 units would exist, and price would tend to fall

At a price of $35, there would be a

surplus of 400 units

The firm would choose to hire three workers if

the market wage for a day's work is $220

With trade, the price of tricycles in this country is

$11, with 200 tricycles produced in this country and another 320 tricycles imported.

ABC and XYZ agree to maximize joint profits. However, while ABC produces the agreed-upon amount, XYZ breaks the agreement and produces 5 more than agreed. How much profit does XYZ make?

$140

If the market price is $10, what is the firm's short-run economic profit?

$15

What is the value of F?

$150

As a result of the tax, consumer surplus decreases by

$160, producer surplus decreases by $160, tax revenue is $240, and deadweight loss is $80

If the supply curve is S, the demand curve is D, and the equilibrium price is $100, what is the producer surplus?

$2,500

At Q = 500, the firm's total revenue is

$30,000.

If the market price is $1,000, the producer surplus in the market is

$300

The amount of tax revenue received by the government is

$5.

When the firm is maximizing its profit, the markup over marginal cost amounts to

$50.00.

If the supply curve is S and the demand curve shifts from D to D', what is the increase in producer surplus due to new producers entering the market?

$625

Suppose the cost to build the park is $24 per acre. How many acres should the park be to maximize total surplus from the park in Springfield?

3 acres

At the profit-maximizing, or loss-minimizing, output level, how many units of output will the firm in this figure produce?

30

To maximize profit (or minimize losses), the firm will produce

30 units.

What is the profit-maximizing output for Beatrice's Birthday Cakes?

4 cakes

What is the equilibrium quantity of output in this market?

4 units

The socially optimal quantity of output is

420 units, since the value to society of the 420th unit is equal to the cost incurred by the seller of the 420th unit.

How many units of the good are purchased after the imposition of the price floor?

5

When the price is P2, producer surplus is

A+B+C.

Who experiences the largest gain in consumer surplus when the price of an orange decreases from $1.05 to $0.75?

Allison

The change in total surplus in this market because of trade is

D, and this area represents a gain in total surplus.

Assume a monopolistically competitive firm is currently producing the profit-maximizing level of output. Which of the following represents the excess capacity of this firm?

LM

Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

Point A to Point B

What is the monopoly price and quantity?

Price = A; quantity = X

If the supply curve is S and the demand curve shifts from D to D', what is the change in producer surplus?

Producer surplus increases by $3,125

In which market will the majority of the tax burden fall on buyers?

The market shown in graph (b)

Which of the following is a possible explanation of the shift of the labor demand curve from D 1 to D 2 ?

The price of automobiles increased.

Suppose the government imposes a tax of P' - P'''. The area measured by I + Y represents the

deadweight loss due to the tax

If these are the only four buyers in the market, then when the price increases from $1.00 to $1.50, the market quantity demanded

decreases by 7 units.

Using the midpoint method, if the price falls from $200 to $150, the price elasticity of demand is

elastic

The loss of consumer surplus associated with some buyers dropping out of the market as a result of the tax is

$1.50.

What is the average variable cost of producing 5 units of output?

$40

In the absence of trade, total surplus in Guatemala is represented by the area

A + B + C + D + F

What price will the monopolist charge in order to maximize profit ?

K

The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

The sixth worker

Which of the following statements is not correct?

When the price is $6, there is a surplus of 8 units.

Suppose that there is a technological advance that allows MadeFromScratch employees to produce more cupcakes than they could before. Because of this change, the firm's

demand for labor shifts right.

A binding price ceiling is shown in

graph (b) only.

If the monopoly firm is currently producing Q4 units of output, then a decrease in output will necessarily cause profit to

increase if the output is between Q 3 and Q 4

The tariff

increases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F.

For the firm whose production function and costs are specified in the table, its average-variable-cost curve is

increasing.

The firm's maximum profit

is −$2,000.

When the price ceiling is enforced in this market, and the supply curve for gasoline shifts from S 1 to S 2 , the resulting quantity of gasoline that is bought and sold is

less than Q3

The table represents a market in which

there is a negative externality.

The table represents a market in which

there is a positive externality 10 on the side of graph

If the government forced Beatrice's to produce at the efficient scale of output, what is the maximum profit Beatrice's could earn?

$59

Suppose the market for this product is served by two firms that have formed a cartel. If the marginal cost of production is $4 and each firm incurs a fixed cost of $6, the combined profit of the cartel will be

$6

Firm 4's efficient scale occurs at what quantity?

. 3

Producer surplus plus consumer surplus in this market after trade is

. A + B + C + D

If this country allows free trade in tricycles,

. consumers will gain and producers will lose.

If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is

0 units

Suppose this market is served by two firms who each face the marginal cost curve shown in the diagram and have zero fixed cost. The marginal revenue curve that a monopolist would face in this market is also shown. If the firms are able to collude successfully, each firm should earn a profit equal to

$2

The amount of deadweight loss as a result of the tax is

$2.50.

Both the demand curve and the supply curve are straight lines. At equilibrium, producer surplus is

$24

The loss of consumer surplus for those buyers of the good who continue to buy it after the tax is imposed is

$3

If Rochelle and Alec operate as a profit-maximizing monopoly in the market for water, what price will they charge?

$30

n the absence of trade, total surplus in the Guatemalan coffee market amounts to

1,650.

Using the midpoint method, what is the price elasticity of supply between point B and point C?

1.44

What is the socially optimal quantity of output in this market?

10 units

If the law of supply applies to this good, then Q1 could be

150.

suppose the firm sells each box of envelopes that it produces for $7.50. How many workers should the firm hire?

5

In order to maximize profits, the firm will produce

5 units of output because marginal revenue equals marginal cost.

Which of the following statements is not correct?

A government-imposed price of $10 would be a binding price ceiling if market demand is either Demand A or Demand B.

Which of the following is consistent with the elasticities given in Table 5-1?

A is a luxury and B is a necessity

Suppose a firm in a competitive market, like the one depicted in graph (a), observes market price rising from P1 to P2. Which of the following could explain this observation?

An increase in market demand from D0 to D1.

The demand curve for a monopoly firm is depicted by curve

B

Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Between 60 units and 100 units

If there are exactly five sellers of gasoline in Driveaway and if they collude, then which of the following outcomes is most likely?

Each seller will sell 30 gallons and charge a price of $5

The overuse of antibiotics leads to the development of antibiotic-resistant diseases. Therefore, the market for antibiotics is shown in

Graph (b) only.

Firms would be encouraged to enter this market for all prices that exceed

P4.

The shift from Db to Da in the market for potato chips could be caused by

a decrease in income, assuming that potato chips are a normal good

The firm will earn a positive economic profit in the short run if the market price is

above $13

f the market price is $5, the firm will earn

negative economic profits and shut down

Acme and Pinnacle agree to cooperate so as to maximize total profit. If this game is played repeatedly and Acme uses a tit-for-tat strategy, it will choose a

poor quality product in the first round and in subsequent rounds it will choose whatever Pinnacle chose in the previous round.

What is the value of C?

$100

For this firm, the marginal revenue of the 13th unit is

$11

The amount of the tax per unit is

$14

Both the demand curve and the supply curve are straight lines. At equilibrium, consumer surplus is

$48.

The amount of the tax on each unit of the good is

$5

Both the demand curve and the supply curve are straight lines. If the price is $4 but only 6 units are bought and sold, total surplus will be

$54

What price will the monopolistically competitive firm charge in this market?

$80

If the government wanted to eliminate exactly 11 units of pollution, which of the following fees per unit of pollution would achieve that goal?

$87

A profit-maximizing monopoly's total revenue is equal to

P5 × Q3

If the four suppliers listed are the only suppliers in this market and the market quantity demanded is 300 cases when the price is $3.00, which of the following statements is correct?

The market is in equilibrium at a price of $3.00

Total surplus in this market after trade is

A + B + C + D.

suppose the government is considering levying a tax in one or more of the markets described in the table. Which of the markets will allow the government to minimize the deadweight loss(es) from the tax?

Markets B and D only

If all external costs were internalized, then the market's output would be

Q2

This graph illustrates the market for bakers who make homemade breads and breakfast pastries. If the bakery profession becomes more attractive to young women and men because of a new reality television show, what happens in the market for bakers?

Supply increases from S1 to S2