microeconomics exam#2 TCU

Evan purchases a wall calendar for $9, and his consumer surplus is $1. How much is Evan willing to pay for the wall calendar?

$10

You are offered a free ticket to see the Chicago Cubs play the Chicago White Sox at Wrigley Field. Assume the ticket has no resale value. Willie Nelson is performing on the same night, and his concert is your next-best alternative activity. Tickets to see Willie Nelson cost $40. On any given day, you would be willing to pay up to $50 to see and hear Willie Nelson perform. Assume there are no other costs of seeing either event. Based on this information, at a minimum, how much would you have to value seeing the Cubs play the White Sox to accept the ticket and go to the game?

$10

Billie Jo values a stainless steel dishwasher for her new house at $500, but she succeeds in buying one for $425. Billie Jo's willingness to pay for the dishwasher is

$500

For a small country called Boxland, the equation of the domestic demand curve for cardboard is Q(d)= 200-2P, where Q(d) represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a ton of cardboard. • For Boxland, the equation of the domestic supply curve for cardboard is Q(s)= -60+3P, where Q(s) represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard. -suppose the world price of cardboard is $139 and international trade is allowed. then boxland's consumer demand

102 tons of cardboard and boxland's producers supply 357 tons of cardboard

suppose the government imposes a tax on cheese, the DWL from this tax will likely be greater in the

8th year after it is imposed than in the 1st year after it is imposed b/c demand and supply will be less elastic in the first year than in the eighth year

Assume, for India, that the domestic price of copper without international trade is lower than the world price of copper. This suggests that, in the production of copper,

India has a comparative advantage over other countries and will export copper

If T represents the size of the tax on a good and Q represents the quantity of the good that is sold, total tax revenue received by government can be expressed as

TxQ

which of the following is not an advantage of a multilateral approach to free trade over a unilateral approach?

a multilateral approach requires the agreement of two or more nations

a shortage results when

binding price ceiling is imposed on the market

price ceilings and price floors that are binding

cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price

in the market for apartments, rent control causes the quantity supplied to...

fall and quantity demanded to rise

Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began

importing televisions and the price of a television in Paraguay decreased to $300

if the government levies a $800 tax per motorcycle on sellers of motorcycles, then the price paid by buyers of motorcycles would...

increase by less than $800

the deadweight loss from a tax per unit of good will be smallest in a market with

inelastic supply and inelastic demand

the social security tax is a tax on

labor

a result of welfare economics is that the equilibrium price of a product is considered to be the best price b/c it

maximizes the combined welfare of buyers and sellers

Suppose televisions are a normal good and buyers of televisions experience a decrease in income. As a result, consumer surplus in the television market

may increase, decrease, or remain unchanged

as a result of a decrease in price

new buyers enter the market, increasing consumer surplus

The size of a tax and the deadweight loss that results from the tax are

positively related

if a nonbinding price floor is imposed on the market, then the...

quantity sold in the market will stay the same

when a tax is levied on a good, the buyers and sellers of the good share the burden

regardless of how the tax is levied

cost is a measure of the

seller's willingness to sell

suppose that in a particular market, the supply curve is highly inelastic and the demand curve is highly elastic. if a tax is imposed in this market, then the...

sellers will bear a greater burden of the tax than the buyers

which of the following is not correct?

taxes levied on sellers and taxes levied on buyers are not equivalent

in the 1970's long lines at gas stations in the United States were primarily a result of the fact that

the U.S. government maintained a price ceiling on gasoline

when a country allows trade and becomes an exporter of silk, which of the following is not a consequence

the price paid by domestic consumers of silk decreases

a simultaneous increase in both demand for tablets and the supply of tablets would imply that

the value of tablets to consumers has increased, and the cost of producing tablets has decreased

if a price ceiling is not binding

there will be no effect on the market price or quantity sold

True or false? Rent control is an example of a price ceiling, & minimum wage is an example of a price floor

true

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

willingness to pay

under rent control. landlords can cease to be responsive to tenants concerns about the quality of housing because...

with shortages and waiting lists, they have no incentive to maintain and improve their property