Along a given supply curve, a decrease in price will cause producer surplus to:

D) We cannot determine what producer surplus will do without information about the demand curve.

B) a legal restriction on how high or low a price in a market may go.

A) when a firm controls the price of the good it produces.

C) an upper limit on the quantity of some good that can be bought or sold.

D) a tax placed on the sale of a good which controls the market price.

If the minimum wage is a binding price floor, then:

A) the number of workers who want to work will be greater than the number of jobs available.

B) the equilibrium wage will increase.

C) there will be a job for everyone who is willing to work.

D) business owners will hire more workers.

A price ceiling will have no effect if:

it is set above the equilibrium price.

the equilibrium price is above the price ceiling.

it is set below the equilibrium price.

The burden of a tax that is imposed on a good is said to fall completely on the consumers if the:

price paid by consumers for the good increases by the amount of the tax.

price paid by consumers for the good declines by the amount of the tax.

price paid by consumers does not change.

wages received by workers who produce the good increase by the amount of the tax.

Suppose the production of DVDs generates sulfur dioxide, an air pollutant. Then the equilibrium market quantity of DVDs produced and consumed:

is more than the socially optimal quantity.

is less than the socially optimal quantity.

equals the socially optimal quantity.

may be more than, less than, or equal to the socially optimal quantity.

If drivers decide to make phone calls without considering the costs imposed on others, the:

number of phone calls made while driving will be above the socially optimal quantity

number of phone calls made while driving will be below the socially optimal quantity

marginal social cost curve will lie below the marginal cost of production curve

marginal social benefit curve will lie below the marginal social cost curve

Assume there are external benefits associated with the production of good X. Without government regulation, the market will:

price good X less than the marginal social benefit.

price good X less than the marginal social cost.

price good X greater than the marginal cost.

Suppose the price elasticity of demand for yachts equals 4.04, while the price elasticity of supply for yachts equals 0.22. If Congress reinstates a luxury tax on yachts, who will pay more of the tax?

Yacht builders and buyers will pay equally.

It's impossible to tell without additional information.

If the government imposes a price floor above the equilibrium price, what will be the result?

The market will remain in equilibrium.

The supply curve will shift to the right.

Assume the government imposes a tax on a good with perfectly inelastic demand. Who bears the burden of the tax?

The consumers bear the entire burden.

The producers bear the entire burden.

The tax burden is shared equally between producers and consumers.

Neither producers nor consumers bear the burden.

What happens to consumer surplus if the price of a good decreases from $5 to $3?

Consumer surplus remains the same.

If a price floor is set below the equilibrium price, what will be the effect on the market?

The market will remain in equilibrium.

The supply curve will shift to the left.

After the government imposed a $0.20 per gallon tax on gasoline, the price of a gallon of gasoline increased from $1.00 to $1.15. Which of the following statements is true?

Consumers bear most, but not all, of the tax burden.

Consumers bear the entire burden of the tax, since producers can pass the tax along to consumers.

Consumers and producers share the tax burden equally.

Producers bear the entire burden of the tax, since the tax was levied on producers, not consumers.

There is no tax burden, since gasoline is a normal good.

When a price floor is imposed, it has an impact on a market if it is set:

Above the equilibrium price because quantity supplied exceeds quantity demanded

Above the equilibrium price because quantity demanded exceeds quantity supplied

Marx Exam 2

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36 questions

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MULTIPLE CHOICE QUESTION

3 mins • 1 pt

If the demand curve is downward-sloping and supply is perfectly elastic, then the burden of an excise tax is:

borne entirely by consumers.

borne entirely by producers.

shared by consumers and producers, with the burden falling mainly on consumers.

shared by consumers and producers, with the burden falling mainly on producers.

MULTIPLE CHOICE QUESTION

3 mins • 1 pt

Luis is willing to sell his pool table for $600, but if he gets $840, the producer surplus Luis receives is ________.

$600

$840

$240

$1,440

MULTIPLE CHOICE QUESTION

3 mins • 1 pt

Maria wants to get rid of her bookshelf. She is willing to give it away for free but her neighbor offers to pay $30 for it. Maria experiences a:

consumer surplus gain.

consumer surplus loss.

producer surplus gain.

producer surplus loss.

MULTIPLE CHOICE QUESTION

3 mins • 1 pt

Along a given supply curve, an increase in the price of a good will:

increase producer surplus.

decrease producer surplus.

increase consumer surplus.

decrease producer surplus and increase consumer surplus

MULTIPLE CHOICE QUESTION

3 mins • 1 pt

(Figure: Consumer Surplus III) Look at the figure Consumer Surplus III. In the figure, when the price falls from $30 to $25, consumer surplus for a total consumer surplus of .

increases by $25; $74

decreases by $15; $34

increases by $15; $64

increases by $5; $54

MULTIPLE CHOICE QUESTION

3 mins • 1 pt

(Figure: Consumer Surplus II) Look at the figure Consumer Surplus II. If the price of the good is $2, consumer surplus will equal:

$30.

$45.

$60.

$90

MULTIPLE CHOICE QUESTION

3 mins • 1 pt

(Figure: Consumer Surplus II) Look at the figure Consumer Surplus II. If the price of the good decreases from $2 to $1, consumer surplus will increase by:

$30.

$45.

$60.

$90

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Marx Exam 2

If the demand curve is downward-sloping and supply is perfectly elastic, then the burden of an excise tax is:

Luis is willing to sell his pool table for $600, but if he gets $840, the producer surplus Luis receives is ________.

Maria wants to get rid of her bookshelf. She is willing to give it away for free but her neighbor offers to pay $30 for it. Maria experiences a:

Along a given supply curve, an increase in the price of a good will:

(Figure: Consumer Surplus III) Look at the figure Consumer Surplus III. In the figure, when the price falls from $30 to $25, consumer surplus for a total consumer surplus of .

(Figure: Consumer Surplus II) Look at the figure Consumer Surplus II. If the price of the good is $2, consumer surplus will equal:

(Figure: Consumer Surplus II) Look at the figure Consumer Surplus II. If the price of the good decreases from $2 to $1, consumer surplus will increase by:

(Figure: The Market for Sandwiches) Look at the figure The Market for Sandwiches. At the competitive price of $5, 10 sandwiches are sold. At this competitive price, consumer surplus equals _ and producer surplus equals _.

Along a given supply curve, a decrease in price will cause producer surplus to:

(Figure: Consumer Surplus II) Look at the figure Consumer Surplus II. If the price of the good increases from $3 to $4, consumer surplus will decrease by:

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Marx Exam 2

If the demand curve is downward-sloping and supply is perfectly elastic, then the burden of an excise tax is:

Luis is willing to sell his pool table for $600, but if he gets $840, the producer surplus Luis receives is ________.

Maria wants to get rid of her bookshelf. She is willing to give it away for free but her neighbor offers to pay $30 for it. Maria experiences a:

Along a given supply curve, an increase in the price of a good will:

(Figure: Consumer Surplus III) Look at the figure Consumer Surplus III. In the figure, when the price falls from $30 to $25, consumer surplus ________ for a total consumer surplus of ________.

(Figure: Consumer Surplus II) Look at the figure Consumer Surplus II. If the price of the good is $2, consumer surplus will equal:

(Figure: Consumer Surplus II) Look at the figure Consumer Surplus II. If the price of the good decreases from $2 to $1, consumer surplus will increase by:

(Figure: The Market for Sandwiches) Look at the figure The Market for Sandwiches. At the competitive price of $5, 10 sandwiches are sold. At this competitive price, consumer surplus equals _______ and producer surplus equals _______.

Along a given supply curve, a decrease in price will cause producer surplus to:

(Figure: Consumer Surplus II) Look at the figure Consumer Surplus II. If the price of the good increases from $3 to $4, consumer surplus will decrease by:

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(Figure: Consumer Surplus III) Look at the figure Consumer Surplus III. In the figure, when the price falls from $30 to $25, consumer surplus for a total consumer surplus of .

(Figure: The Market for Sandwiches) Look at the figure The Market for Sandwiches. At the competitive price of $5, 10 sandwiches are sold. At this competitive price, consumer surplus equals _ and producer surplus equals _.