Question 1

-The above figure shows supply and demand curves for apartment units in a large city.The area "e" represents

Accepted Answer

A) the loss in producer surplus if a rent ceiling of $350 is imposed. 
B) the total variable cost of supplying Q1 units. 
C) the marginal cost of supplying Q1 units. 
D) the total revenue received by supplying Q1 units. 
A) the loss in producer surplus if a rent ceiling of $350 is imposed. 
B) the total variable cost of supplying Q1 units. 
C) the marginal cost of supplying Q1 units. 
D) the total revenue received by supplying Q1 units.

Question 2

-Suppose the market supply curve for wheat is shown in the above figure.Calculate the producer surplus when price is $2 per bushel.If legislation mandates that the price be $1 per bushel,what is the resulting loss in producer surplus?

Accepted Answer

At a price of $2,producer surplus equals

Question 3

Deadweight loss occurs when

Accepted Answer

A) producer surplus is greater than consumer surplus. 
B) the maximum level of total welfare is not achieved. 
C) consumer surplus is reduced. 
D) an inferior good is consumed. 
A) producer surplus is greater than consumer surplus. 
B) the maximum level of total welfare is not achieved. 
C) consumer surplus is reduced. 
D) an inferior good is consumed.

Question 4

-The above figure shows the market for rice in Japan.SDomestic represents the domestic supply curve,and Sworld represents the world supply curve.The smallest tariff necessary to completely eliminate imported rice is

Accepted Answer

A) $1 per unit. 
B) $25 per unit. 
C) $50 per unit. 
D) Not enough information. 
A) $1 per unit. 
B) $25 per unit. 
C) $50 per unit. 
D) Not enough information.

Question 5

A firm that generates zero economic profit usually faces

Accepted Answer

A) negative business profit. 
B) zero business profit. 
C) positive business profit. 
D) business profit equal to half the total revenue. 
A) negative business profit. 
B) zero business profit. 
C) positive business profit. 
D) business profit equal to half the total revenue.

Question 6

Suppose the market supply curve is p = 5 + Q.If price increases from 10 to 15,the change in producer surplus is

Accepted Answer

A) 12.5. 
B) 5. 
C) 50. 
D) 37.5. 
A) 12.5. 
B) 5. 
C) 50. 
D) 37.5.

Question 7

The welfare loss of a tariff equals that of a import quota that leads to the same level of imports.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) b + c + f + g. 
B) f + g. 
C) b + f. 
D) c + g. 
A) b + c + f + g. 
B) f + g. 
C) b + f. 
D) c + g.

Question 9

-The above figure shows the demand and supply curves in the market for milk.Currently,the market is in equilibrium.If the government imposes a $2 per gallon tax to be collected from sellers,calculate the dead weight loss associated with the tax,and explain why the dead weight loss occurs.

Accepted Answer

The deadweight loss equals .5 ∗ 2 ∗ 500

Question 10

The difference between producer surplus and profit is always the associated

Accepted Answer

A) opportunity costs. 
B) total costs. 
C) variable costs. 
D) fixed costs. 
A) opportunity costs. 
B) total costs. 
C) variable costs. 
D) fixed costs.

Question 11

As the quantity produced of a good increases,the social welfare generated by that good increases.

Accepted Answer

A) True 
 B)False

Question 12

Giving presents on Christmas does NOT generate a deadweight loss if

Accepted Answer

A) all gift are money. 
B) everybody gets exactly want she wants. 
C) nobody can be made better off by returning the gift and purchasing a different one. 
D) All of the above. 
A) all gift are money. 
B) everybody gets exactly want she wants. 
C) nobody can be made better off by returning the gift and purchasing a different one. 
D) All of the above.

Question 13

Suppose the inverse supply curve in a market is Q = 6p2.What is the producer surplus when price is equal to 4?

Accepted Answer

A) 96 
B) 128 
C) 28 
D) 48 
A) 96 
B) 128 
C) 28 
D) 48

Question 14

The inverse supply curve in a market is given by Q = 3p2.What is the producer surplus when the market price is $6? Illustrate using a graph.

Accepted Answer

The integr

Question 15

If a market produces a level of output below the competitive equilibrium,then

Accepted Answer

A) social welfare is not maximized. 
B) consumer surplus might still be maximized. 
C) the actual price will be below the equilibrium price. 
D) social welfare might still be enhanced if a price ceiling keeps price below the competitive price. 
A) social welfare is not maximized. 
B) consumer surplus might still be maximized. 
C) the actual price will be below the equilibrium price. 
D) social welfare might still be enhanced if a price ceiling keeps price below the competitive price.

Question 16

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?

Accepted Answer

A) Consumer surplus will increase. 
B) Producer surplus will increase. 
C) Entry of new brokers will increase. 
D) Social welfare will increase. 
A) Consumer surplus will increase. 
B) Producer surplus will increase. 
C) Entry of new brokers will increase. 
D) Social welfare will increase.

Question 17

-The above figure shows supply and demand curves for apartment units in a large city.The area "c" represents

Accepted Answer

A) the loss in consumer surplus if a rent ceiling of $350 is imposed. 
B) a transfer from producers to consumers if a rent ceiling of $350 is imposed. 
C) a transfer from consumers to producers if a rent ceiling of $350 is imposed. 
D) the total revenue received by supplying Q1 units. 
A) the loss in consumer surplus if a rent ceiling of $350 is imposed. 
B) a transfer from producers to consumers if a rent ceiling of $350 is imposed. 
C) a transfer from consumers to producers if a rent ceiling of $350 is imposed. 
D) the total revenue received by supplying Q1 units.

Question 18

-The above figure shows the market for rice in Japan.SDomestic represents the domestic supply curve,and Sworld represents the world supply curve.If imported rice is banned,the consumption distortion loss is equal to

Accepted Answer

A) a + b + c + d. 
B) a + b + c + d + f + g. 
C) f + g. 
D) a + c + f + g. 
A) a + b + c + d. 
B) a + b + c + d + f + g. 
C) f + g. 
D) a + c + f + g.

Question 19

While producing less than the competitive output decreases social welfare,the same cannot be said about producing more than the competitive output.

Accepted Answer

A) True 
 B)False

Question 20

The welfare loss from an import quota is greater than that of an equivalent tariff because

Accepted Answer

A) tariff revenues can be used to society's benefit. 
B) the loss in consumer surplus is not as large. 
C) domestic producers gain more from a quota than from a tariff. 
D) tariff revenues represent an additional deadweight loss. 
A) tariff revenues can be used to society's benefit. 
B) the loss in consumer surplus is not as large. 
C) domestic producers gain more from a quota than from a tariff. 
D) tariff revenues represent an additional deadweight loss.

-The above figure shows supply and demand curves for apartment units in a large city.The area "e" represents

-Suppose the market supply curve for wheat is shown in the above figure.Calculate the producer surplus when price is $2 per bushel.If legislation mandates that the price be $1 per bushel,what is the resulting loss in producer surplus?

Deadweight loss occurs when

-The above figure shows the market for rice in Japan.S_Domestic represents the domestic supply curve,and S_world represents the world supply curve.The smallest tariff necessary to completely eliminate imported rice is

A firm that generates zero economic profit usually faces

Suppose the market supply curve is p = 5 + Q.If price increases from 10 to 15,the change in producer surplus is

The welfare loss of a tariff equals that of a import quota that leads to the same level of imports.

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

-The above figure shows the demand and supply curves in the market for milk.Currently,the market is in equilibrium.If the government imposes a $2 per gallon tax to be collected from sellers,calculate the dead weight loss associated with the tax,and explain why the dead weight loss occurs.

The difference between producer surplus and profit is always the associated

As the quantity produced of a good increases,the social welfare generated by that good increases.

Giving presents on Christmas does NOT generate a deadweight loss if

Suppose the inverse supply curve in a market is Q = 6p².What is the producer surplus when price is equal to 4?

The inverse supply curve in a market is given by Q = 3p².What is the producer surplus when the market price is $6? Illustrate using a graph.

If a market produces a level of output below the competitive equilibrium,then

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?

-The above figure shows supply and demand curves for apartment units in a large city.The area "c" represents

-The above figure shows the market for rice in Japan.S_Domestic represents the domestic supply curve,and S_world represents the world supply curve.If imported rice is banned,the consumption distortion loss is equal to

While producing less than the competitive output decreases social welfare,the same cannot be said about producing more than the competitive output.

The welfare loss from an import quota is greater than that of an equivalent tariff because

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 9: Properties and Applications of the Competitive Model

-The above figure shows supply and demand curves for apartment units in a large city.The area "e" represents

-Suppose the market supply curve for wheat is shown in the above figure.Calculate the producer surplus when price is $2 per bushel.If legislation mandates that the price be $1 per bushel,what is the resulting loss in producer surplus?

Deadweight loss occurs when

-The above figure shows the market for rice in Japan.SDomestic represents the domestic supply curve,and Sworld represents the world supply curve.The smallest tariff necessary to completely eliminate imported rice is

A firm that generates zero economic profit usually faces

Suppose the market supply curve is p = 5 + Q.If price increases from 10 to 15,the change in producer surplus is

The welfare loss of a tariff equals that of a import quota that leads to the same level of imports.

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

-The above figure shows the demand and supply curves in the market for milk.Currently,the market is in equilibrium.If the government imposes a $2 per gallon tax to be collected from sellers,calculate the dead weight loss associated with the tax,and explain why the dead weight loss occurs.

The difference between producer surplus and profit is always the associated

As the quantity produced of a good increases,the social welfare generated by that good increases.

Giving presents on Christmas does NOT generate a deadweight loss if

Suppose the inverse supply curve in a market is Q = 6p2.What is the producer surplus when price is equal to 4?

The inverse supply curve in a market is given by Q = 3p2.What is the producer surplus when the market price is $6? Illustrate using a graph.

If a market produces a level of output below the competitive equilibrium,then

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?

-The above figure shows supply and demand curves for apartment units in a large city.The area "c" represents

-The above figure shows the market for rice in Japan.SDomestic represents the domestic supply curve,and Sworld represents the world supply curve.If imported rice is banned,the consumption distortion loss is equal to

While producing less than the competitive output decreases social welfare,the same cannot be said about producing more than the competitive output.

The welfare loss from an import quota is greater than that of an equivalent tariff because

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

-The above figure shows the market for rice in Japan.S_Domestic represents the domestic supply curve,and S_world represents the world supply curve.The smallest tariff necessary to completely eliminate imported rice is

Suppose the inverse supply curve in a market is Q = 6p².What is the producer surplus when price is equal to 4?

The inverse supply curve in a market is given by Q = 3p².What is the producer surplus when the market price is $6? Illustrate using a graph.

-The above figure shows the market for rice in Japan.S_Domestic represents the domestic supply curve,and S_world represents the world supply curve.If imported rice is banned,the consumption distortion loss is equal to