Question 1

Who and why are the winners and losers when governments implement rent controls?

Accepted Answer

The winners under rent control are those...

Question 2

When price increases, producer surplus could increase because:

Accepted Answer

A)   price decreases.
B)   new sellers enter the market.
C)   consumer surplus increases.
D)   consumer surplus decreases.

Question 3

(Figure: Price Ceiling 0)  In the above figure, after the price ceiling is instituted, there is:

Accepted Answer

A)   an equilibrium.
B)   a shortage.
C)   a surplus.
D)   an efficient market.

Question 4

According to most economists, the best way to eliminate shortages is to:

Accepted Answer

A)   lower a price ceiling.
B)   lower a price floor.
C)   eliminate price controls.
D)   raise a price ceiling.

Question 5

(Figure: Consumer, Producer, and Total Surplus)  In the above figure, which area represents producer surplus?

Accepted Answer

A)   A
B)   B
C)   C
D)   D

Question 6

(Figure: DWLA)  In the figure, what area represents tax revenue?

Accepted Answer

A)   X
B)   X + Y
C)   Y
D)   Z

Question 7

The equilibrium price for travel by taxi is $1 per mile. The local government sets a price ceiling of $3 per mile. What is the effect on the market for travel by taxi?

Accepted Answer

A)   Market price rises to $4 per mile.
B)   Market price rises to $3 per mile.
C)   Market price rises to $2 per mile.
D)   Market price remains at $1 per mile.

Question 8

(Figure: DWL0)  In the figure, what is the total consumer surplus at equilibrium?

Accepted Answer

A)   A + B
B)   A + C
C)   B + D
D)   C + E

Question 9

The seller's gain from a sale-measured as the difference between the seller's willingness to accept and the actual price received-is called:

Accepted Answer

A)   item scarcity.
B)   consumer surplus.
C)   item value.
D)   producer surplus.

Question 10

When a government intervenes in a market, generally the result is:

Accepted Answer

A)   a move toward equilibrium.
B)   equilibrium.
C)   greater competition.
D)   deadweight loss.

Question 11

Marta bids $15 for a shirt on an online auction site. She is the winning bid at $12. What is her consumer surplus?

Accepted Answer

A)   $3
B)   $12
C)   $15
D)   $27

Question 12

At _____, there is no other price or quantity that would result in a higher total surplus.

Accepted Answer

A)   deadweight loss
B)   consumer surplus
C)   producer surplus
D)   equilibrium

Question 13

Jerome bought a shirt for $15. He would have paid $20. Michael, the seller, would have sold it for $12. What is the total surplus resulting from the transaction?

Accepted Answer

A)   $3
B)   $8
C)   $20
D)   $27

Question 14

(Figure: DWLA)  In the figure, what is the new equilibrium price after the tax?

Accepted Answer

A)   $2
B)   $3
C)   $15
D)   $25

Question 15

Producer surplus increases when:

Accepted Answer

A)   consumer surplus increases.
B)   consumer surplus decreases.
C)   prices fall.
D)   prices rise.

Question 16

_____ is obtaining output for the lowest possible cost.

Accepted Answer

A)   Productive efficiency
B)   Allocative efficiency
C)   Market failure
D)   Deadweight loss

Question 17

(Figure: Producer Surplus 0)  The price is $25. In the table, what is Mark's willingness to accept?
   Seller  Producer Surplus  Mark $5 Hank $10 Andy $15\begin{array}{|l|l|}\hline 	ext { Seller } & 	ext { Producer Surplus } \\hline 	ext { Mark } & \$ 5 \\hline 	ext { Hank } & \$ 10 \\hline 	ext { Andy } & \$ 15 \\hline\end{array} Seller  Mark  Hank  Andy ​ Producer Surplus $5$10$15​​

Accepted Answer

A)   $5
B)   $15
C)   $20
D)   $25

Question 18

A price floor is intended to benefit:

Accepted Answer

A)   consumers.
B)   suppliers.
C)   only the poor.
D)   only the wealthy.

Question 19

Kerrie sold a footstool to Alan for $21. She would have taken $15. Alan was willing to pay $30. What is the total surplus resulting from the transaction?

Accepted Answer

A)   $6
B)   $9
C)   $15
D)   $21

Question 20

Matt is selling a footstool in an online auction and is willing to accept $21 for the footstool. When the auction ends, the winning bid is $25. What is Matt's producer surplus?

Accepted Answer

A)   $4
B)   $21
C)   $25
D)   $46

Exam 6: The Economic Efficiency of Markets

When a government intervenes in a market, generally the result is:

Correct AnswerverifiedShow Answer

(Figure: Price Ceiling 0) In the above figure, after the price ceiling is instituted, there is:

Correct AnswerverifiedShow Answer

Matt is selling a footstool in an online auction and is willing to accept $21 for the footstool. When the auction ends, the winning bid is $25. What is Matt's producer surplus?

Correct AnswerverifiedShow Answer

Producer surplus increases when:

Correct AnswerverifiedShow Answer

(Figure: DWLA) In the figure, what is the new equilibrium price after the tax?

Correct AnswerverifiedShow Answer

(Figure: DWL0) In the figure, what is the total consumer surplus at equilibrium?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

_____ is obtaining output for the lowest possible cost.

Correct AnswerverifiedShow Answer

At _____, there is no other price or quantity that would result in a higher total surplus.

Correct AnswerverifiedShow Answer

(Figure: Consumer, Producer, and Total Surplus) In the above figure, which area represents producer surplus?

Correct AnswerverifiedShow Answer

According to most economists, the best way to eliminate shortages is to:

Correct AnswerverifiedShow Answer

The seller's gain from a sale-measured as the difference between the seller's willingness to accept and the actual price received-is called:

Correct AnswerverifiedShow Answer

Who and why are the winners and losers when governments implement rent controls?

Correct AnswerverifiedThe winners under rent control are those...View AnswerShow Answer

The equilibrium price for travel by taxi is $1 per mile. The local government sets a price ceiling of $3 per mile. What is the effect on the market for travel by taxi?

Correct AnswerverifiedShow Answer

(Figure: DWLA) In the figure, what area represents tax revenue?

Correct AnswerverifiedShow Answer

Marta bids $15 for a shirt on an online auction site. She is the winning bid at $12. What is her consumer surplus?

Correct AnswerverifiedShow Answer

Jerome bought a shirt for $15. He would have paid $20. Michael, the seller, would have sold it for $12. What is the total surplus resulting from the transaction?

Correct AnswerverifiedShow Answer

Kerrie sold a footstool to Alan for $21. She would have taken $15. Alan was willing to pay $30. What is the total surplus resulting from the transaction?

Correct AnswerverifiedShow Answer

When price increases, producer surplus could increase because:

Correct AnswerverifiedShow Answer

A price floor is intended to benefit:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The winners under rent control are those...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified