Econ test 2
A consumers willingness to pay measures the cost of a good to the buyer
False
A seller would be willing to sell a product only if the price received is less than the cost of production
False
A supply curve can be used to measure producer surplus because it reflects the action of sellers
False
A tax on the buyers of popcorn increases the size of the popcorn market
False
ATTGS, at the price of p1, producer surplus is A
False
ATTGS, when the price is p2 producer surplus is A
False
According to the graph shown the equilibrium price before the tax is imposed is $1
False
According to the graph shown when the price falls from P2 to P1, producer surplus decreases by an amount equal to A
False
According to the graph shown, area A represents producer surplus to new producers entering the market as the result of price rising from P1 to P2
False
According to the graph the amount of the tax imposed in this market is $1
False
According to the graph the price sellers receive after the tax is imposed is $8
False
According to the graph, the amount of the tax imposed in this market is $1
False
According to the graph, the equilibrium price in the market after the tax is imposed is $1
False
According to the graph, the price buyers will pay after the tax is imposed is $1
False
Amy buys a new dog for 150. She receives consumer surplus of 100 on her purchase. Her willingness to pay is 50
False
At Nick's Bakery, the cost to make his homemade chocolate cake is 3 per cake. He sells three and receives a total of 21 worth of producer surplus. Nick must be selling his cake at 2 each
False
Cost refers to a sellers producer surplus
False
Denea produces cookies. Her production cost is 3 per dozen she sells the cookies for 8 per dozen. Her producer surplus is 3 per dozen
False
Donald produces nails at a cost of 200 per ton if he sells the nails for 500 per ton his producer surplus is 200 per ton
False
If Roberta sells a shirt for 30 and her producer surplus from the sale is 21 her cost must have been 51
False
If a tax is imposed on a market with elastic demand and inelastic supply, buyers will bear most of the burden of the tax
False
If buyers are required to pay a $.10 tax per bag on Hershey's kisses the demand for kisses will shift up by .10 per bag
False
If the demand decrease the price of a product as well as the producer surplus increases
False
If you pay a price exactly equal to your willingness to pay then your consumer surplus is negative
False
In the end, tax incidence depends on the legislated burden
False
Janine would be willing to pay 50 to see Les Miserables but buys a ticket for only 30. Janine values the performance at 20
False
Out of pocket expenses plus the value of the sellers own resources used in production are considered to be the sellers total revenue
False
Producer surplus is the area under the supply curve to the left of the amount sold
False
Producers surplus equals Value to buyers amount paid by buyers
False
Shannon buys a new CD player for her car for 135. She receives her consumer surplus of 25 on her purchase her willingness to pay is 25
False
Suppose consumer income increases. If grass seed is a normal good the eq price of grass seed will decrease the producer surplus in the industry will decrease
False
Suppose that a tax is placed on DVDs. If the seller ends up paying the majority of the tax we know that the demand curve is more inelastic than the supply curve
False
Supposed that a tax is placed on books. If the buyer pays the majority of the tax we know that the supply curve is more inelastic than the demand curve
False
The Surgeon General announces that eating chocolate increases tooth decay. As a result, the equilibrium market price of chocolate increase and producers surplus increases
False
The area below a demand curve and above the price measures producer surplus
False
The initial effect of a tax on the buyers of a good is on the supply of that good
False
The marginal seller is the seller who cannot compete with the other sellers in the market
False
The term tax incidence refers to the boston tea party
False
Total surplus in a market equals value to buyers - amount paid by buyers
False
Total surplus in a market is represented by the total area under the demand curve and above the price
False
Total surplus in a market is the total costs to sellers of providing the goods less the total value to buyers of the goods
False
We can say that the allocation of resources is efficient if producer surplus is maximized
False
Welfare economics is the study of the well-being of less fortunate people
False
When markets fail, public policy can do nothing to improve the situation
False
Willingness to pay measures the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it
False
With the respect to welfare economics the equilibrium price of a product is considered to be the best price because it maximizes the total revenue to firms and total utility to buyers
False
According to the graph shown the equilibrium price before the tax imposed is $8
False 6-97
A demand curve measures a buyers willingness to pay
True
A tax on the sellers of cell phones will reduce the size of the cell phone market
True
A tax placed on the seller of a good raises the price buyers pay and lowers the price sellers receive
True
A tax placed on the seller of a product will raise equilibrium price and lower equilibrium quantity
True
A tax placed on the sellers of blueberries increases costs, lowers profit and shifts supply to the left upward
True
ATTGS C represents the producer surplus when the price is P1
True
ATTGS, B + C represents the total surplus in the market when the price is P1
True
According to the graph shown B represents consumer surplus when the price is P1
True
According to the graph shown, area B represents producer surplus to new producers entering the market as the result of the price rising from P1 to P2
True
An allocation of resources is said to be inefficient if a good is not being produced by the sellers with the lowest cost
True
At the eq price the good will be purchased by those buyers who value the good more than the price
True
Belva is willing to pay $65 for a pair of shoes for a formal dance. She finds a pair at her favorite outlet shoe store for $48. Belva's consumer surplus $17.
True
Buyers of a product will pay the majority of the tax placed on a product when supply is more elastic than demand
True
Consumer surplus equals the Value to buyers amount paid by buyers
True
Consumer surplus is a buyers willingness to pay minus the price
True
Cost is a measure of the sellers willingness to sell
True
Efficiency occurs when total surplus is maximized
True
Externalities are side effects passed on to a party other than the buyers and sellers in the market
True
For the most part a tax burden falls most heavily on the side of the market that is more inelastic
True
For the most part all governments federal state and local rely on taxes to raise revenue for public purposes
True
For the most part buyers and sellers share the burden of the tax
True
If a consumer is willing and able to pay 20.00 for a particular good but only has to pay $14 the consumer surplus is $6
True
If a market is allowed to move freely to its eq price and quantity then an increase in supply will increase consumer surplus
True
If a tax imposed on a market with inelastic demand and elastic supply, buyers will bear the most of the burden of the tax
True
If a tax is imposed on the buyer of a product the demand curve would shift downward by the amount of tax
True
If a tax is levied on the seller of the product the demand will not change
True
If the price a consumer pays for a product is equal to a consumers willingness to pay, then the consumer surplus of that purchase would be zero
True
If the price of a good increase consumer surplus decreases
True
In a market total surplus is equal to producer surplus, plus consumer surplus
True
In most markets consumer surplus reflects economic well being
True
Inefficiency exists in any economy when a good is not being consumed by buyers who value it most highly
True
Producer surplus measures the well-being of sellers
True
Suppose the demand for nachos increases. Producer surplus in the market for nachos will increase
True
Suppose there is an early freeze in California that ruins the lemon crop. Consumer surplus in the market for lemons decreases
True
The invisible hand refers to the marketplace guiding the self interests of market participants into promoting general economic well-being
True
Total surplus = value to sellers - costs of sellers is not correct
True
Total surplus in a market equals consumer surplus + producer surplus
True
Wen technology improves in the ice cream industry consumer surplus increases
True
When a tax is placed on the buyers of milk the size of the milk market is reduced
True
When a tax is placed on the sellers of a product the size of the market is reduced
True
When analyzing the economic effects of government polices, supply and demand are useful tools of the analysis
True
When economists say that the markets are efficient they are assuming that the markets are truly competitive
True
According to the graph the price buyers will have to pay after the tax is $8
Two chainz