Microeconomic

Refer to Figure 8-6. What happens to total surplus in this market when the tax is imposed?

NOT b. Total surplus increases by $1,500.,,,,DECREASE by 1500

The vertical distance between points A and B represents a tax in the market. Refer to Figure 8-2. The per-unit burden of the tax on buyers is

NOT b. $5....maybe $2....actually 9-6=$3

Refer to Figure 7-15. At the equilibrium price, total surplus is

NOT c. $480.....maybe $1120...$1600$1320...$1960

Refer to Figure 7-17. If 4 units of the good are produced and sold, then

NOT c. total surplus is minimize..................maybe A. the marginal cost to sellers exceeds the marginal value to buyers.

A price ceiling is

NOT d. All of the above are correct.....the legal maximum of price

All else equal, an increase in supply will cause an increase in consumer surplus.

True

Goods with close substitutes tend to have more elastic demands than do goods without close substitutes.

True

Refer to Figure 8-2. The loss of consumer surplus associated with some buyers dropping out of the market as a result of the tax is

a. $1.50.

Refer to Figure 6-4. Suppose a price floor of $7 is imposed on this market. As a result,

a. buyers' total expenditure on the good decreases by $20.

If the size of a tax increases, tax revenue

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

As the tax on a good increases from $1 per unit to $2 per unit to $3 per unit and so on, the

a. tax revenue increases at first, but it eventually peaks and then decreases.

Refer to Table 7-8. You wish to purchase 10 piano lessons, so you take bids from each of the sellers. You will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons. What bid will you accept?

b. $249

Refer to Figure 7-14. Which area represents consumer surplus when the price is P1?

b. B

The figure illustrates the market for wool in New Zealand. Refer to Figure 9-1. From the figure it is apparent that

b. New Zealand has a comparative advantage in producing wool, relative to the rest of the world.

Refer to Figure 7-1. When the price rises from P1 to P2, consumer surplus

b. decreases by an amount equal to B+C.

Cost is a measure of the

b. seller's willingness to sell.

The vertical distance between points A and B represents a tax in the market. Refer to Figure 8-6. Without a tax, producer surplus in this market is

c. $2,400.

Policymakers use taxes

c. both to raise revenue for public purposes and to influence market outcomes.

The maximum price that a buyer will pay for a good is called the

c. willingness to pay.

Refer to Figure 8-2. The loss of producer surplus associated with some sellers dropping out of the market as a result of the tax is

d. $1.

Refer to Figure 7-1. When the price rises from P1 to P2, which of the following statements is not true?

d. Buyers place a higher value on the good after the price increase.

Refer to Figure 6-4. Suppose a price ceiling of $5 is imposed on this market. As a result,

d. buyers' total expenditure on the good decreases by $100.

A tax on an imported good is called a

d. tariff.

Suppose Larry, Moe and Curly are bidding in an auction for a mint-condition video of Charlie Chaplin's first movie. Each has in mind a maximum amount that he will bid. This maximum is called

d. willingness to pay.

Refer to Figure 6-10. How much tax revenue does this tax produce for the government?

d. $600