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 dozen cookies is-

$2

Refer to Figure 7-6. What is the consumer surplus if price is $100?

$2500

Refer to Figure 7-17. At equilibrium, consumer surplus is-

$36

Refer to figure 8-6. Without a tax, consumer surplus in this market is-

$3600

Refer to figure 6-12: The effective price received by sellers after the tax is imposed is-

$4

Refer to Figure 8-7. The dead weight loss associated with this tax amounts to-

$40

With a tax imposed it would be

900

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

A. more elastic is the supply of labor.

Total surplus-

All of the above are correct

Which area represents producer surplus when the price is P

BCG (bottom left triangle)

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.

Refer to figure 7-7. Which area represents producer surplus when the price is P1?

CBG

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 strawberries more than before. If the market price is the same as before, then—

Dallas's consumer surplus would increase

Historically rent controls have caused_____________ in the markets where they exist

Housing Shortages

If the government removes a tax on a good, then the quantity 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 dead weight loss from a $2 tax will be smallest in a market with-

Inelastic demand and inelastic supply

Refer to figure 7-14. Total surplus can be measured as the area-

JNL

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 less than before the tax.

Refer to Figure 8-3. The amount of tax revenue received by the government is equal to the area-

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

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

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

Which of the following statements is NOT correct?

Since sellers cannot set the price for their product, they must be willing to sell their product at any price. n

The minimum wage does not apply to

Unpaid Internships

Consumer surplus is the-

amount a consumer is willing to pay minus the amount the consumer actually pays.

If labor market is characterized by a labor union, wages will be_____. And employment will be____ than is a purely competitive labor market model.

higher; lower

To say that a price ceiling is nonbinding is to say that the price ceiling-

is set above the equilibrium price.

Data indicate that government agricultural price supports have _____

led to food surplus

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-

sellers' costs

When a tax is placed on the sellers of computer-

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