Exam 5: Economic Efficiency, Government Price Setting and Taxes

Figure 5-1 Figure 5-1 shows Arnold's demand curve for burritos. -Refer to Figure 5-1.Arnold's marginal benefit from consuming the fourth burrito is

Figure 5-5 Figure 5-5 shows the market for apartments in Springfield.Recently,the government imposed a rent ceiling of $1000 per month. -Refer to Figure 5-5.Suppose that instead of a rent ceiling,the government imposed a price floor of $2000 per month for apartments.What is the value of producer surplus after the imposition of the price floor?

Table 5-4 Table 5-4 shows the demand and supply schedules for labour market in the city of Pixley. -Refer to Table 5-4.What is the equilibrium hourly wage (W*)and the equilibrium quantity of labour (Q*)?

Table 5-2 -Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one ticket rises from $10 to $19,

Table 5-3 -Refer to Table 5-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specialises in producing fancy dress costumes.If the market price of cowboy hats is $50,how many hats will be produced?

If equilibrium is achieved in a competitive market,

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