ECN 212 (EXAM 2 REVIEW)
The following will cause an increase in producer surplus in the market for spam, which is considered an inferior good
A decrease in consumer income
Suppose the government imposes a binding price ceiling on the market for internet-connected exercise bicycles, because it wants to encourage people to exercise more. As a result,
A shortage of internet-connected exercise bicycles will develop
The uncompensated impact of one persons actions on the well being of a third party is called
An externality
A tax placed on the sellers of duck blinds, causes the quantity of duck blinds in the market
And the effective price received by sellers both to decrease
A cabana along a beach that is open to the public is considered a
Common resource
Hurricane lota destroys half of the Florida Orange crop. Which of the following best describes the effect of hurricane Lota
In the market for oranges, supply decreases; and in the market for Orange juice, consumer surplus decreases
These following is a way is internalizing technology spillovers
Patent protections, tax breaks for research and development, and subsidies
A new drone that you take turns flying with your friends is considered a
Private good
A buyers willingness to pay is
That buyers maximum amount they are willing to pay off a good
The sellers cost of production is
The minimum amount the seller is willing to accept for a good
An efficient allocation of resources maximizes
Total surplus
Total surplus in a market is equal to
Value to buyers minus cost to sellers
A positive externality (that has not been internalized) causes the
optimal quantity to exceed the equilibrium quantity
A legal minimum on the price at which a good can be sold is called a
price floor
A free rider is a person who
receives the benefit of a good but avoids paying for it