Exam 3 Flashcards
In Singapore the government places a $5,000 tax on the buyers of new automobiles. After buying a new car, the buyer must pay the government $5,000. How would the imposition of the tax on buyers be illustrated in a graph?
the tax will shift both the demand and supply curves down by $5,000
the tax will shift the supply curve up by $5,000
the tax will shift the demand up by $5,000
the tax will shift the demand curve down by $5,000
the tax will shift the demand curve down by $5,000
What is the new price the buyers pay if the tax is $4?
$14
$12
$10
$8
none of the above
$12
What is the new price the sellers receive if the tax is $4?
$14
$12
$10
$8
$6
$8
What would be the new quantity produced and sold with a tax of $6?
600 units
between 300 and 600 units
300 units
between 0 and 300 units
none of the above
between 300 and 600 units
Suppose the market is initially in equlibrium at price P1 and then the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax?
the consumer’s share of the tax burden is the same whether the demand curve is D1 or D2
the consumer will bear a smaller share of the tax burden if the demand curve is D1
the consumer will bear the entire burden of the tac if the demand curve is D2 and the producer will bear the entire burden of the tax if the demand curve is D1
the consumer will bear a smaller share of the tax burden if the demand curve is D2
the consumer will bear a smaller share of the tax burden if the demand curve is D1
Paul goes to Dick’s Sporting Goods to buy a new tennis racquet. He is willing to pay $200 for a new racquet, but buys one on sale for $125. Paul’s consumer surplus from the purchase is
$325
$200
$125
$75
$75
If the price of Vanilla Coke is $6.90, who will purchase the good?
all five individuals
Megan, Molly, and Audrey
David, Laura and Megan
David and Laura
David and Laura
The following table shows the cost of producing a good for the only four producers in the market. If the market equilibrium price is $28, what is total producer surplus in the market?
$14
$70
$30
$26
none of the above
$26
What is consumer surplus at equilibrium?
$800
$900
$400
$300
none of the above
$300
Coffee Market shows the demand and supply curves for the coffee market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at $7.00. What does consumer surplus in this market decrease by when the price floor of $7 is imposed?
$3,150
$2,650
$1,500
$600
none of the above
none of the above
Assume the demand curve and supply curve are straight lines. What is producer surplus at equilibrium?
$24
$36
$42
$48
none of the above
$24
Steak and chicken are substitutes. A sharp reduction in the supply of steak would
increase consumer surplus in the market for steak and decrease producer surplus in the market for chicken
increase consumer surplus in the market for steak and increase producer surplus in the market for chicken
decrease consumer surplus on the market for steak and increase producer surplus in the market for chicken
decrease consumer surplus in the market for steak and decrease producer surplus in the market for chicken
decrease consumer surplus in the market for steak and increase producer surplus in the market for chicken
Total surplus in a market will increase when the government
imposes a tax on the market
imposes a binding price floor on that market
removes a binding price ceiling from the market
none of the above in correct
imposes a tax on that market
Which of the following statements is correct?
the market is in equilibrium at Q1
at Q2, the cost to sellers exceeds the value to buyers
at Q4 the value to buyers is less than the cost to sellers
at Q3, the market is producing too much output
at Q4, the value to buyers is less than the cost to sellers
If the government imposes a price ceiling of $130 on this good, then total surplus will
increase
deacrase
stay the same
not enough information the answer this question
stay the same
The efficient price is
$80, and the efficient quantity is 50
$70, and the efficient is 60
$70, and the efficient quantity is 100
$50, and the efficient quantity is 60
$70, and the efficient quantity is 100
The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3
not enough consumers want to buy pecans
the quantity supplied is economically efficient but the quantity demanded is economically inefficient
the quantity supplied is less than the economically efficient quantity
total surplus is maximized
the quantity supplied is less than the economically efficient quantity
The vertical distance between points A and B represent a tac in the market. What is total surplus in this market when the tax is imposed?
$1,500
$6,000
$4,500
$3,000
none of the above
$4,500
The vertical distance between points A and B represents a tac in the market. How much tax revenue will the government collect?
$1,500
$6,000
$4,500
$3,000
none of the above
$3,000
Assume the government imposes a tax of P3-P1. What areas represent the deadweight loss that will occur due to the tax?
B+D
A+B+D+F
C+H
G+I
none of the above
C+H
Suppose the government imposes at tax of P3-P2. What is the consumer surplus with the tax?
A
A+B+C
D+H+F
F
none of the above
A
Suppose the government imposes a tax of $3 per unit. What is producer surplus with the tax?
$10
$22.50
$40
$80
none of the above
$22.50
The vertical distance between points A and B represents a tax in the market. What is the size of the tax?
$6
$10
$4
$16
none of the above
$10
Suppose buyers, rather than sellers, were required to pay this tax ( in the same amount per unit as shown in the graph ). Relative to the tax on sellers, the tac on buyers would result in
buyers bearing a larger share of the tax burden
sellers bearing a smaller share of the tax burden
the same amount of tax revenue for the government
both A and B are correct
the same amount of the tax revenue for the government
