Chapter 5
Graphically, producer surplus is the area between ________.
the equilibrium price and the supply curve
If the government imposes a quota in the market for imported sugar cane, which is the following will happen?
A)The quota will eliminate the deadweight loss in the market
B)There is a transfer of surplus from buyers to sellers
C)The quota will increase total surplus.
D)There is a transfer of surplus from sellers to buyers
B)There is a transfer of surplus from buyers to sellers
The social cost of producing a good that generates negative externalities is the sum of the ________.
A)private cost and external costs of production
B)social costs and external costs of production
C)private cost and external benefits of production
D)private benefits and external costs of production
A)private cost and external costs of production
What does cetaris paribus mean?
All else equal
Where was the NFL abroad game held earlier this week?
Berlin
Economic surplus is equal to ________.
The sum of consumer and producer surplus
Suppose the equilibrium wage rate for fast food workers is $14.00 per hour and at that wage rate the equilibrium quantity of fast food workers employed is 56,000. If the minimum wage is set at $20.00 per hour, then the
A)quantity of fast food workers employed decreases.
B)quantity of fast food workers demanded does not change, and the quantity of fast food workers supplied does not change.
C)quantity of fast food workers employed does not change.
D)quantity of fast food workers employed increases
A)quantity of fast food workers employed decreases.
What occurs when an externality is internalized?
An increase in economic surplus
The price elasticity of supply is ________ elastic over time because ________.
more; producers have a longer time to adjust their production decisions
What is the capital of Canada?
Ottowa
Willingness to pay is the ________ for a unit of good. For a trade to take place, the willingness to pay must be ________.
highest price that a buyer is willing to pay; higher than the price of the good
If demand is highly elastic, and the government decides to raise the tax on new cars, the price of cars will increase by a ________ amount and car buyers will bear a________ share of the tax.
small; small
Private solutions to externalities are most effective if ________.
the transaction costs associated with bargaining are low
Suppose the value of the price elasticity of supply is 4. What does this mean? (The answer is not elastic)
A 1 percent increase in the price of the good causes quantity supplied to increase by 4 percent.
Which Norwegian artist created The Scream?
Edvard Munch
If, in a competitive market, marginal benefit is less than marginal cost, then:
A)the output is greater than the equilibrium quantity.
B)the output is less than the equilibrium quantity.
C)the government must force producers to raise prices in order to achieve economic efficiency.
D)the net benefit to consumers from participating in the market is less than the net benefit to producers.
A)the output is greater than the equilibrium quantity.
Tax incidence is:
division of a tax burden between the buyer and seller.
A carbon tax would ________ the cost of producing goods and services that create large carbon emissions, and would lead Americans to use ________ carbon-intensive goods and services
raise; fewer
Which of the following will definitely occur when there is a simultaneous increase in demand and an increase in supply?
A)an increase in equilibrium quantity
B)a decrease in equilibrium price
C)a decrease in equilibrium quantity
D)an increase in equilibrium price4
A)an increase in equilibrium quantity
What is the least common blood type among Americans?
When a market is efficient:
A)a central planner must be involved.
B)there is no exchange that can make anyone better off without someone becoming worse off.
C)an increase in price will reduce the deadweight loss.
D)total surplus is zero.
B)there is no exchange that can make anyone better off without someone becoming worse off.
If the government imposes a price ceiling in a market that is below the equilibrium price:
A)total surplus in the market increases.
B)total surplus in the market decreases.
C)total surplus in the market does not change.
B)total surplus in the market decreases.
Your next-door neighbor has a beautiful cedar garden, but you are allergic to cedar trees and cannot use your yard because of the cedar pollen that drifts into your yard.In this case, the cedar garden is an example of a:
good that imposes an external cost
If society were to experience an increase in its available resources its production possibilities frontier would:
Shift outward
Once again, what kind of dogs does Eileen have?
Collies