EC 210 MidTerm
At Nick's Bakery, the cost to make homemade chocolate cake is $3 per cake. As a result of selling three cakes, Nick experiences a producer surplus in the amount of $19.50. Nick must be selling his cakes for
$9.50 each
Brock is willing to pay $400 for a new suit, but he is able to buy the suit for $350. His consumer surplus is
$50
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
The minimum wage is binding for workers with high skills and much experience
FALSE
Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about
1 to 3 percent
If the government removes a binding price ceiling from a market, then the price paid by buyers will
increase, and the quantity sold in the market will increase
When a binding price floor is imposed on a market to benefit sellers
some sellers benefit, and some sellers are harmed
The minimum wage has its greatest impact on the market for
teenage labor
Alex is willing to pay $10, and Bella is willing to pay $8, for 1 pound of ribeye steak. When the price of ribeye steak increases from $9 to $11,
Alex experiences a decrease in consumer surplus, but Bella does not
The economy contains many labor markets for different types of workers
TRUE
The impact of minimum wage depends on the skill and experience of the worker
TRUE
The minimum wage is not binding when the equilibrium wage is above the minimum wage
TRUE
If the United States changed its laws to allow for the legal sale of a kidney, which of the following is least likely to occur?
The allocation of kidneys would be fair
Opponents of the minimum wage point out that the minimum wage -encourages teens to drop out of school -contributes to the problem of unemployment -prevents some workers from getting needed on-the-job training -all of the above are correct
all of the above are correct
When a tax is placed on the sellers of a product, -effective price received by sellers decreases, and the price paid by buyers increases. -supply of the product decreases. -size of the market decreases. -all of the above are correct
all of the above are correct
A binding minimum wage
alters both the quantity demanded and quantity supplied of labor
Producer surplus measures the
benefits to sellers of participating in a market.
A legal minimum on the price at which a good can be sold is called a price
ceiling
If the government removes a binding price floor from a market, then the price received by sellers will
decrease, and the quantity sold in the market will increase
If the demand for light bulbs increases, producer surplus in the market for light bulbs
increases
The imposition of a binding price floor on a market causes the quantity demanded to be?
less than quantity supplied
The particular price that results in quantity supplied being equal to quantity demanded is the best price because it
maximizes the combined welfare of buyers and sellers.
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 of the price floor,
quantity demanded of toothpaste decreases, and the quantity of toothpaste that firms want to supply increases
In 1990, Congress passed a new luxury tax on items such as yachts, private airplanes, furs, jewelry, and expensive cars. The goal of the tax was to?
raise revenue from the wealthy
Moving production from a high-cost producer to a low-cost producer will
raise total surplus
A supply curve can be used to measure producer surplus because it reflects
sellers' costs
The price received by sellers in a market will increase if the government decreases a
tax on the good sold in that market
An outcome that can result from wither a price ceiling or a price floor is
undesirable rationing mechanisms
When a tax is imposed on the sellers of a good, the supply curve shifts
upwards by the amount of the tax