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

If there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and consumer surplus plus producer surplus is maximized, then

The payroll tax is a tax imposed on ________ that is used to fund Social Security and Medicare.

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 the portion of producer surplus transferred to consumers as a result of the rent ceiling?

In a competitive market, the demand curve shows the ________ received by consumers and the supply curve shows the ________.

Table 4-2 -Refer to Table 4-2.The table above lists the highest prices five consumers are willing to pay for a theater ticket.If the price of one of the tickets is $10,

Table 4-7 -Refer to Table 4-7.The equations above describe the demand and supply for Bubba's Fried Jellybeans.The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units.What is the value of producer surplus?

David Card and Alan Krueger conducted a study of fast-food restaurants in New Jersey and Pennsylvania.The study found that

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $1.00, what is the consumer surplus on the third burrito?

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $1.00, what is the consumer surplus on the fourth burrito?

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?

Frieda is at her local florist to buy a dozen roses.She is willing to pay $75 for the roses, and buys them for $75.Frieda's consumer surplus from the purchase is

The marginal cost for Java Joe's to produce its first cup of coffee is $0.75.Its marginal cost to produce its second cup of coffee is $1.25.Its marginal cost increases by $0.50 for each additional cup of coffee it produces.Suppose the market price for coffee is $2.25.Construct a graph showing the producer surplus for each cup of coffee Java Joe's will sell.How many cups of coffee will Java Joe's sell? What is the value of the producer surplus Java Joe's receives for each cup of coffee it sells?

The cities of Francistown and Nalady are five miles apart.Francistown enacts a rent control law that puts a ceiling on rents well below their equilibrium market value.Predict the short-run impact of this law on the competitive equilibrium rent in Nalady, which does not have a rent control law. a.Illustrate your answer with one demand and supply graph for the apartment market in Francistown and another demand and supply graph for the apartment market in Nalady. b.Make sure that your graphs clearly show (1)the initial equilibrium before the rent control in both markets and (2)what happens after the imposition of rent control. c.Clearly show any shifts in the demand or supply curves, and the movement along the curves for each market. d.Label your graphs fully and provide written explanation for your graphs.

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

The total amount of producer surplus in a market is equal to

Figure 4-4 -Refer to Figure 4-4.The figure above represents the market for pecans.Assume that this is a competitive market.If 4,000 pounds of pecans are sold,

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $1.50, what is the consumer surplus on the second burrito?

Table 4-1 -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,

Table 4-4 Table 4-4 shows the demand and supply schedules for the labor market in the city of Pixley. -Refer to Table 4-4.Suppose that the quantity of labor supplied decreases by 80,000 at each wage level.What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?

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 the deadweight loss at the equilibrium price of $15?