Microeconomics Test 2

Ivana produces cookies. Her production cost is $6 per dozen. She sells the cookies for $8 per dozen. Her producer surplus per cookies is

$2

What is the consumer surplus if the price is $100

$2,500 if the price goes up to 150???

At equilibrium consumer surplus is 44-32=12 Q=6 so

$36

. The deadweight loss associated with this tax amounts to (graph) B is at 8 and A is at 16 and the E is at 25 (q)

. $40 and this figure represents the surplus that is lost because the tax discourages...

Consumer surplus is the

Amount a consumer is willingness to pay minus the amount the consumer actually pays

Dallas buys strawberries, and he would be willing to pay more than he now pays. Suppose that Dallas has a change in his tastes such that he values more than before. If the market price is the same as before, then

Dallas's consumer surplus would increase

1.Historically rent controls have caused ____ in the markets where they exist

Housing Shortages

If the government removes a tax on the good then the quantiy of the good will

Increase

An increase in the size of a tax is most likely to increase tax revenue in a market with

Inelastic demand and inelastic supply

The deadweight loss from a $2 tax will be smallest in a market with

Inelastic demand and inelastic supply. (Largest if it were both elastic)

To say that a price ceiling is non-biding is to say that the price ceiling

Is set above the equilibrium price.

Data indicate that government agricultural price supports have

Let to food surpluses

The more freedom people are given to choose the date of their retirement the

More elastic is the supply of labor

When a tax is placed on the buyers of a product a result is that buyers effectively pay

More than before the tax and sellers effectively receive more than before the tax

The amount of tax revenue received by the government is equal to which area

P1, P3, C, A (the large rectangle)

Data indicate that the minimum wage law has

Reduced employment, particularly among young workers and minorities

A supply curve can be used to measure producer surplus because it reflects

Seller's Costs

Which of the following is not correct?

Since sellers cannot set the price for their product they will sell their product at any price

When a tax is placed on the sellers of computer (could be another good or service)

The burden of the tax will be shared by the buyers and the sellers but the division fof the burden is not always equal.

Okay sellers is supposed to pay the tax because the supply curve shifted upwards. The Tax amount $3 and the price buyers take after the tax is 7 and for sellers its 4. (it's some graph but that's how you figure it out and the answer choice is...)

The effective price received by the sellers after the tax imposed is 4

Minimum wage does not apply to

Unpaid internships

Suppose the equilibrium price of a tube of toothpaste is $2 and the government imposes a price floor of $3 per tube. As a result the price floor the

quantity demanded of toothpaste decreases and the quantity of toothpaste that firms want to supply increases

With a tax imposed it would be

$900

Which area represents producer surplus when the price is P1

(bottom left triangle. A.BCG...Total surplus can be measure as JNL (whole left triangle)

Without a tax, consumer surplus in this market is

. $3600 22-10 is 12 and Idk

Suppose a tax is imposed on the buyers of fast-food French fries. The burden of the tax will

Be shared by the buyers and sellers of fast-food French fries but not necessarily equally

Total Surplus

Can be used to measure a markets efficieny, is the sum of consumer and producer surplus, is the to value to buyers minus the cost to sellers so D. All of the above.

If a labor market is characterized by a labor union, wages will be ___ and employment will be ___ than in a purely competitive labor market model

higher; lower