econ test 2

In the market for widgets, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for widgets is 200 per month when there is no tax. Then a tax of $5 per widget is imposed. The price paid by buyers increases by $2 and the after-tax price received by sellers falls by $3. The government is able to raise $750 per month in revenue from the tax. The deadweight loss from the tax is

125$

at equilibrium price total surplus is

1800

if the market price is 1,000, the producer surplus in the market is

300

Suppose Lauren, Leslie and Lydia all purchase bulletin boards for their rooms for $15 each. Lauren's willingness to pay was $35, Leslie's willingness to pay was $25, and Lydia's willingness to pay was $30. Total consumer surplus for these three would be

35-15=20 25-15=10 30-15=15 add all together = 45

if the equilibrium price raises from 200 to 350, what is the additional producer surplus to new producers?

7500

at the equilibrium price consumer surplus is

900

at the equilibrium price producer surplus is what

900

the vertical distance between point A and point B represents a tax in the market 3. What is the CS, PS, TS, gov. rev, DWL after the tax?

CS- 90 PS-90 TS-1120 gov rev-240 DWL-80

if the government imposes a price ceiling of 2$ on this market, then there will be

a shortage of 30 units

in which of the following situations will total revenue increase

all of the above

when a tax is placed on the sellers of energy drinks, the

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

the vertical distance between point A and point B represents a tax in the market 2. What is the new buyers price and sellers price? How large is the tax?

buyers price= 32 sellers price = 16 tax is 16$

suppose a tax is placed on books. If the buyers pay the majority of the tax then we know that the demand

demand is more inelastic than supply

suppose the government imposes a 50 cent tax on the sellers of packets of chewing gum. the tax would

discourage market activity

A tax imposed on the sellers of a good will lower the

effective price received by sellers and lower the equilibrium quantity

For any country, if the world price of copper is higher than the domestic price of copper without trade, that country should

export copper, since that country has a comparative advantage in copper

consider a good to which a per unit tax applies. the greater the price elasticity of demand and supply of the good, the

greater the dead weight loss from the tax

welfare economics is the study of

how the allocation of resources affects economic well-being

suppose the government increases the size of a tax by 20%. the dead weight loss from that tax

increases by more than 20%

On a graph, the area above a supply curve and below the price measures

producer surplus

the vertical distance between point A and point B represents a tax in the market 1. What is Ps, CS, and TS before the tax?

ps-250 cs-250 ts-500

the laffer curve was supported and used by which president

ronald reagan

Some firms eventually experience problems with their capacity to produce output as their output levels increase. For these firms,

supply is more elastic at low levels of output and less elastic at high levels of out put

if the government imposes a price floor of 5$ on this market, then there will be a

surplus of 15 units

a tariff is a

tax on an imported good

efficiency is obtained when

total surplus is maximized