Microeconomics Final Exam Review

figure 8-2 consumer surplus without the tax is

$6 and consumer surplus with tax is $1.5

when large changes in price lead to no changes in quantity demanded, demand is perfectly

inelastic, and the demand curve will be vertical

When her income increased from $10,000 to $20,000, Heather's consumption of macaroni decreased from 10 pounds to 5 pounds and her consumption of soy-burgers increased from 2 pounds to 4 pounds. We can conclude that for Heather, macaroni

is an inferior good with an income elasticity of -1 and soy burgers are normal goods with an income elasticity of 1

if something happens to alter the quantity supplied at any given price, then

the supply curve shifts

the bow wow company produced and sold 350 dog beds. the average cost of production per dog bed was $35. each dog bed can be sold for a price of $45. bow wow's total cost is

$12,250

table 4-5 if the four suppliers listed are the only suppliers in this market and the market demand schedule is (shown) the equilibrium price and quantity are

$2 and 300 cases

suppose that when the price of good x increases 610-710 the quantity demanded of good y decreases from 51 to 15. use midpoint method, the corss price elasticity of demand is about

-7.20 and x and y are complements

table 3-6 which of the following points is on max's production possibilities frontier, based on a 36 hour production period

18 mittens zero hats

figure 8-2 the per unit burden of the tax on buyers is

3 dollars

Katherine gives piano lessons for $15 per hour. She also grows flowers, which she arranges and sells at the local farmer's market. One day she spends 5 hours planting $50 worth of seeds in her garden. Once the seeds have grown into flowers, she can sell them for $150 at the farmer's market. Katherine's accounting profits are

400 and economic profits are 175

if the price elasticity of demand for a good is 5 then a 10% increase in price results in a

50% decrease in the quantity demanded

if the price elasticy of supply is .6 and a price increase led to a 3.7 percent increase in quantity supplied then the price increase is about

6.17 percent

table 13-9 what is the marginal product of the third worker

60 units

when a tax is placed on the sellers of cell phones, the size of the cell phone market

and the effective price recieved by sellers both decrease

table 4-7who experiences the largest loss of consumer surplus when the price of an apple increases from .70 to 1.40

bob

on a graph the area below the demand curve and above the price measures

consumer surplus

figure 6-2 the price ceiling causes quantity

demanded to exceed quantity suppllied by 90 units

suppose the number of buyers in a market increases and a technological advancement occurs also. what would we expect to happen in the market

equilibrium quantity would increase but the impact on equilibrium price would be ambiguous

figure 14-7 if the market starts in equilibrium at point z in graph b, a decrease in demand will ultimately lead to

fewer firms in the market

table 8-1 suppose the government is considering levying a tax in one or more of the markets described in the table. which of the markets will allow the government to minimize the deadweight loss from the tax

markets b and d only

cost is a measure of the

sellers willingness to sell

figure 4-7; at price 15 there would be a

shortage of 400 units

a taz levied on the sellers of a good shifts the

supply curve upward or to the left

which of the following causes the price paid by buyers to be different than the price recieved by sellers

tax on the good

suppose sellers of cologne are required to send $1.50 to the gov for every bottole of cologne they sell. further, suppose this tax causes the price paid by buyers of cologne to rise by .90 per bottle. which of the following statements is correct

the effective price recieved by the sellers is .60 per bottle less than it was before the tax

table 2-2 which of the following statements is correct

the opportunity cost of an additional 100 toys increases as more toys are produced

what happens to the total surplus in a market when the government imposes a tax

total surplus decreases

consider the market for gasoline. buyers

would lobby for a price ceiling whereas sellers would lobby. for a price floor

figure 14-1 if the market price is exactly $6.5 the firm will earn

zero economic profits in the short run