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

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 ticket is $25,

When a competitive equilibrium is achieved in a market,

Table 4-14 -Refer to Table 4-14. The equations above describe the demand and supply for Pauline's Pickled Pomegranates. What are the equilibrium price and quantity (in thousands) for Pauline's Pickled Pomegranates?

Table 4-12 -Refer to Table 4-12. The equations above describe the demand and supply for Bubba's Fried Jellybeans. What are the equilibrium price and quantity (in thousands) for Bubba's Fried Jellybeans?

If the demand curve for a product is vertical, any tax increase on the product is paid for entirely by the consumer.

________ is maximized in a competitive market when marginal benefit equals marginal cost.

Table 4-13 -Refer to Table 4-13. The equations above describe the demand and supply for Aunt Maud's Premium Hand Lotion. What are the equilibrium price and quantity (in thousands) for Aunt Maud's Lotion?

Each point on a ________ curve shows the willingness of consumers to purchase a product at different prices.

The additional cost to a firm of producing one more unit of a good or service is equal to producer surplus.

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?

Figure 4-9 Figure 4-9 shows the demand and supply curves for the almond market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at Pf. -In the economic sense, almost everything is scarce. ________ of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price.

Figure 4-17 -When Congress passed a law that imposed a tax designed to fund its Social Security and Medicare programs it wanted employers and workers to share the burden of the tax equally. Most economists who have studied the incidence of the tax have concluded

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,

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1. Arnold's marginal benefit from consuming the third burrito is

Figure 4-3 Figure 4-3 shows Kendra's demand curve for ice-cream cones. -Refer to Figure 4-3. If the market price is $2.50, what is the consumer surplus on the second ice cream cone?

Figure 4-4 Figure 4-4 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 4-4. What is the value of consumer surplus at the equilibrium price of $15?

A tax is imposed on employers and workers that are used to fund Social Security and Medicare. This tax is sometimes referred to as

Figure 4-12 -Refer to Figure 4-12, which shows the market for watermelons. Suppose the government imposes a price floor of Pw. How will the price floor affect the quantity supplied, quantity demanded and quantity exchanged?

Table 4-7 Table 4-7 shows the demand and supply schedules for labor market in the city of Pixley. -Refer to Table 4-7. If a minimum wage of $11.50 an hour is mandated, what is the quantity of labor demanded?

Figure 4-5 -Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If 8,000 pounds of pecans are sold,