Exam 9: Applying the Competitive Model

If activists successfully lobbied government to force firms to produce more output than they normally would in a perfectly competitive market,

In 2007, the National Collegiate Athletic Association put a moratorium on new Football Bowl Series (formerly Division IA)teams. This policy will

Suppose consumers of cigarettes can be classified into two groups: heavy users and light users. Heavy users purchase more cigarettes and are less sensitive to price changes relative to light users. To determine whether a heavy user suffers a greater loss of consumer surplus than a light user does when the price of cigarettes increases, one would need to know

The cost of lobbying for an import quota in a perfectly competitive market

When is the profit a firm earns equal to the producer surplus? Explain.

-The above figure shows supply and demand curves for milk. If the government passes a $2 per gallon specific tax, the welfare loss will equal

Before the DVD, the VCR was a popular format for taping and replaying video. When the DVD was introduced, which of the following most accurately describes the long-run adjustment process in the VCR industry?

-The above figure shows supply and demand curves for milk. If the government limits milk production to Q₂, the loss in social welfare will equal

-The above figure shows supply and demand curves for milk. If the government passes a $2 per gallon specific tax, the loss in consumer surplus will equal

Changes in a firm's profit induce ________ in the producer surplus (PS).

The services of real estate brokers are provided in a competitive market. If the state Board of Realtors enacts several requirements that limit the number of real estate brokers, which of the following is most likely to occur?

In the short run, if a firm operates, it earns a profit of $500. The fixed costs of the firm are $100. This firm has a producer surplus of

Sarah and David both have linear demand curves for lemonade. Sarah's demand curve for lemonade intersects David's demand curve at a price of 50 cents per glass. Sarah's demand curve is more inelastic than David's. A change in the price of lemonade from 50 cents to 25 cents per glass will

The larger the U.S. imposed per unit import tariff on a good imported and produced in the United States,

-The above figure shows the market for rice in Japan where price is expressed in dollars. S represents the domestic supply curve, and the horizontal line at P = 1 represents the world supply curve. A $1 per unit tariff has the same effect on producer and consumer surplus as a quota of

-The above figure shows the market demand curve for telecommunication while driving one's car (time spent on the car phone). The current price is $0.35 per minute. If the price were to increase by ten cents per minute, consumer surplus would