Exam 4: Economic Efficiency, Government Price Setting, and Taxes

The difference between the ________ and the ________ from the sale of a product is called producer surplus.

Figure 4.3 Figure 4.3 shows the market for tiger shrimp. The market is initially in equilibrium at a price of $15 and a quantity of 80. Now suppose producers decide to cut output to 40 in order to raise the price to $18. -Refer to Figure 4.3.What is the value of producer surplus at a price of $18?

In a competitive market equilibrium

Figure 4.11 -Refer to Figure 4.11.The figure above illustrates the markets for two goods, Good X and Good Y.Suppose an identical dollar tax is imposed in each market. a.Compare the consumer burden and producer burden in each market.Illustrate your answer graphically. b.If the goal of the government is to raise revenue with minimum impact to quantity consumed, in which market should the tax be imposed? c.If the goal of the government is to discourage consumption, in which market should the tax be imposed?

Figure 4.4 -Refer to Figure 4.4.The figure above represents the market for pecans.Assume that this is a competitive market.If the price of pecans is $3

Table 4.3 Hourly Wage (dollars) Quantity of Labour Supplied Quantity of Labour Demanded \ 7.50 530,000 650,000 8.50 550,000 630,000 9.50 570,000 610,000 10.50 590,000 590,000 11.50 610,000 570,000 12.50 630,000 550,000 Table 4.3 shows the demand and supply schedules for the labour market in the city of Oshawa. -Refer to Table 4.3.If a minimum wage of $9.50 is mandated there will be a

In a province with rent-controlled apartments, all of the following are true except

Economists have shown that the burden of a tax is the same whether the tax is collected from the buyer or the seller.Why, then, are gasoline and cigarette taxes imposed on sellers?

What is "tax incidence"? What determines tax incidence in a competitive market?

Figure 4.5 Figure 4.5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month. -Refer to Figure 4.5.What is the value of producer surplus after the imposition of the ceiling?

One result of a tax is an increase in economic efficiency.

Suppliers will be willing to supply a product only if

Figure 4.4 -Refer to Figure 4.4.The figure above represents the market for pecans.Assume that this is a competitive market.If the price of pecans is $3, what changes in the market would result in an economically efficient output?

Two economists estimated the benefit people get from visiting Gros Morn Nation Park in Newfoundland and Labrador.The economists found

In cities with rent controls, the actual rents paid can be higher than the legal maximum.One explanation for this is

Figure 4.8 Figure 4.8 shows the market for beer. The government plans to impose a unit tax in this market. -Refer to Figure 4.8.For each unit sold, the price sellers receive after the tax (net of tax)is

Table 4.1 Consumer Willingness to Pay Tom \ 40 Dick 30 Harriet 25 -Refer to Table 4.1.The table above lists the highest prices three consumers, Tom, Dick and Harriet, are willing to pay for a short-sleeved polo shirt.If the price of the shirts falls from $28 to $20

Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia.What will be the likely effect on the market for sparkling wine in Vinyardia?

In order to prevent a massive surplus of milk, the government

Figure 4.7 -Refer to Figure 4.7 which shows the market for vitamins.Suppose the government imposes a price ceiling of Pᵥ.How will the price ceiling affect the quantity supplied, quantity demanded and quantity exchanged?