MicroEcon Exam 2 Study Guide
If tickets sell for $40 each, then what is the total consumer surplus in the market? Buyer - Willingness to Pay Jennifer - $10 Bryce - $15 Dan - $20 David - $25 Ken - $50 Lisa - $60
$30 = (50-40) + (60-40)
If Evan, Selena, Angie, and Kris sell the good, and the resulting producer surplus is $700, then the price must have been... Seller - Cost Evan - $50 Selena - $100 Angie - $150 Kris - $200
$300 {$700 = ???
What is the effective price that sellers receive after the tax is imposed?
the price value of the point on the supply curve at the bottom of the vertical line representing the tax imposed on the market
If the sellers bid against each other for the right to sell the good to a consumer, then the good would sell for... Seller - Cost Evan - $50 Selena - $100 Angie - $150 Kris - $200
$100 or slightly less
If the sellers bid against each other for the right to sell the good to a consumer, then the producer surplus will be... Seller - Cost Evan - $50 Selena - $100 Angie - $150 Kris - $200
$50 or slightly less
Which of the following price ceilings would be binding in this market? $8, $6, $12, $10 Equilibrium price = $8
$6
If the government imposes a price ceiling of $55 in this market, then total surplus will be...
(consumer surplus) + (producer surplus) because (price ceiling) = (price that buyers pay)
What is the per-unit burden on sellers?
(equilibrium price) - (effective price that sellers receive)
What is the amount of tax per unit?
(price that buyers pay) - (effective price that sellers receive) the length of the vertical line representing the tax imposed on the market
What is the per-unit burden of the tax on buyers?
(price that buyers pay) - (equilibrium price)
Chapter 11 Quiz
Chapter 11 Quiz
Chapter 6 Quiz
Chapter 6 Quiz
Chapter 7 Quiz
Chapter 7 Quiz
Chapter 8 Quiz
Chapter 8 Quiz
If the government imposes a price ceiling of $8 on this market, then there will be a _____ shortage. (Equilibrium price = $8)
No shortage
If the government imposes a price floor of $6 on this market, then there will be a _____ surplus. (Equilibrium price = $8)
No surplus
If you have two (essentially) identical tickets that you sell to the group in an auction, what will be the selling price for each ticket? Buyer - Willingness to Pay Jennifer - $10 Bryce - $15 Dan - $20 David - $25 Ken - $50 Lisa - $60
Slightly more than $25
If you have a ticket that you sell to the group in an auction, what will be the selling price? Buyer - Willingness to Pay Jennifer - $10 Bryce - $15 Dan - $20 David - $25 Ken - $50 Lisa - $60
Slightly more than $50
What is the price that buyers pay after the tax is imposed?
The price value of the point on the demand curve at the top of the vertical line representing tax imposed on the market
On holiday weekends thousands of people picnic in state parks. Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero. An overcrowded picnic area is an example of
a Tragedy of the Commons
The sign on a church in your neighborhood reads "All are welcome at Sunday Service." Because the church has limited seating and is usually full, the Sunday Service is
a common resource
A city street is what kind of resource?
a common resource when it is congested, but it is a public good when it is not congested
In which of the following cases would sellers have to develop a rationing mechanism? (Equilibrium price = $8) a. a price ceiling set at $8 b. a price ceiling set at $6 c. a price floor set at $8 d. a price floor set at $6
b. a price ceiling set at $6
Cost-benefit analysis is important to determine the role of government in our economy because
cost-benefit analysis identifies the possible gains to society from government provision of a particular good
Which of the following is NOT correct? (Equilibrium price = $8) a. A price ceiling set at $6 would be binding, but a price ceiling set at $12 would not be binding. b. A price floor set at $14 would be binding, but a price floor set at $8 would not be binding. c. A price ceiling set at $9 would result in a surplus. d. A price floor set at $6 would result in a shortage.
d. A price floor set at $6 would result in a shortage.
The Ogallala aquifer is a largely underground pool of fresh water under several western states in the United States. Any farmer with land above the aquifer can at present pump water out of it. We might expect that...
over time, the aquifer is likely to be overused.
The provision of a public good generates a _____ externality and the use of a common resource generates a _____ externality.
positive, negative
A common theme among examples of market failure is
some item of value does not have an owner with the legal authority to control it
The US patent system makes...
specific, technical knowledge excludable
At the equilibrium price, producer surplus is...
the area above the supply curve but below the equilibrium price
At the equilibrium price, consumer surplus is...
the area below the demand curve but above the equilibrium price
Producers have little incentive to produce a public good because
there is a free-rider problem