Econ - Exam 2
Donald produces nails at a cost of $200 per ton. If he sells the nails for $350 per ton, his producer surplus per ton is
$150
with free trade, total surplus is
$450
total surplus with trade exceeds total surplus without trade by
$75
if the market price is 1,100 the combined total cost of all participating sellers is
2,250
if max has taxable income of 227,000, his marginal tax rate is
34%
without trade, consumer surplus amounts to
367.50
At the equilibrium price, consumer surplus is
480
when tax is imposed in this market, sellers effectively pay what amount of the 10 tax
6
Which area represents the increase in consumer surplus when the price falls from p1 to p2?
BCDG
which of the following can not explain why the private solution to externality based on coase theorem is usually hard to reach
case theorem is fundamentally wrong
as a result of the tariff, there is a deadweight loss that amounts to
d+f
if this market is currently producing at q3, then total economic well-being would be maximized if output
decreased to q2
when the country moves from free trade to trade and a tariff, consumer surplus
decreases by $144 and producer surplus increases by $48
when a country allows trade and becomes an importer of a good
domestic producers become worse off and domestic consumers become better off
the amount of government revenue created by the tariff is
e
after the tax is levied, producer surplus is represented by area
f
national defense is provided by the government because
free-rider problem make it difficult for private markets to supply the socially optimal quantity of public goods
which of the following statements is correct
government should tax goods with negative externalities and subsidize goods with positive externatilities
with trade, this country
imports 50 wagons
the deadweight loss from a $2 tax will be smallest in a market with
inelastic demand and inelastic supply
a positive externality will cause a private market to produce
less than is socially desirable
a negative externality will cause a private market to produce
more than is socially desirable
with the tariff, the domestic price and domestic quantity demanded are
p2 and q3
Externalities are
side effects passed on to a party other than the buyers and sellers in the market
if the government wanted to ensure that the market reaches the socially optimal equilibrium in the presence of a technology spillover, it should
subsidize producers by an amount equal to the value of the technology spillover
When the price is p1, area b+c represents
total surplus
if trade in tomatoes is allowed, the
total well-being of the US is enhanced relative to the no-trade situation
within a country, the domestic price of a product will equal the world price if
trade restrictions are imposed on the product
this market
would benefit from a tax on the product
