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Microeconomics Study Set 46

Business

Quiz 3 :

Using Supply and Demand to Analyze Markets

Quiz 3 :

Using Supply and Demand to Analyze Markets

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Deadweight loss can be calculated as:
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D

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(Figure: Market for Tickets II) Before the tax, producers receive the price ____ and after the tax, producers receive the price ____. img
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B

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(Figure: Market for Good X II) Before the subsidy, producer surplus is ____ and after the subsidy, producer surplus is ____. img
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C

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(Figure: Price and Quantity IV) Suppose the government mandates a price ceiling of $8 per pound. Consumer surplus: img
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The demand and supply of pickles are given by QD = 300 - 500P and QS = 400P - 150, where P is the price per pickle and Q measures the quantity of pickles in millions. Suppose the government creates a subsidy of $0.25 per pickle. Which of the following statements are TRUE? I. Without the subsidy, the equilibrium quantity of pickles is 75 million. II. With the subsidy, consumers pay 38.9 cents per pickle. III. With the subsidy, producers receive 75 cents per pickle. IV. With the subsidy, the equilibrium quantity of pickles is greater than 100 million.
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(Figure: Market for Tickets II) The size of the tax is: img
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(Figure: Market for Tickets II) The government tax revenue is: ​ ​ img
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Consumer surplus can be calculated as:
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If the government subsidizes a product, what is the relationship between the price that buyers pay (PB) and the price that sellers receive (PS)?
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(Figure: Price and Quantity V) For demand curve D1, the level of consumer surplus at a price of $40 is: img
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To calculate producer surplus:
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The demand for a good is given by QD = 750 - 0.4P. What is consumer surplus at a price of $80?
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The market for organic cabbage is represented by QD = 1,200 - 75P and QS = 425P - 300, where P is the price per head of cabbage and Q measures the number of heads of cabbage per week. Suppose the price of organic fertilizer falls, making sellers willing to sell 100 more heads of cabbage per week at every price. What happens to producer and consumer surplus as a result of this change?
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The deadweight loss (owing to a price ceiling) increases as demand becomes more _____ and supply becomes more _____.
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In the market for cotton, the quantity demanded and quantity supplied are expressed mathematically as QD = 400 - 250P and QS = 250P - 100, where P is the price per pound of cotton and Q measures pounds of cotton. Suppose the government sets a price ceiling of $0.50 per pound of cotton. The consumer surplus with the price ceiling is:
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The demand and supply of movie tickets are given by QD = 30 - 3P and QS = 4P - 19, where P is the price per ticket and Q is in thousands of tickets. If the government places a $1 tax on each ticket, the prices that consumers pay with and without the tax are _____ and _____, respectively.
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(Figure: Market for Good X II) The total cost of the subsidy for the government is ____. img
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In the market for cotton, the quantity demanded and quantity supplied are expressed mathematically as QD = 400 - 250P and QS = 250P - 100, where P is the price per pound of cotton and Q measures pounds of cotton. Suppose the government sets a price ceiling of $0.50 per pound of cotton. The producer surplus with the price ceiling is:
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At the equilibrium price of $10, the elasticity of demand and supply are -0.9 and 1.10. If the government institutes a tax of $1 per unit, sellers will receive _____ and consumers will pay _____.
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(Figure: Market for Magazines I) The supply equation in the adult magazine market is given by QS = 2P - 4, where P is the price per magazine and Q measures the number of magazines in thousands. Which supply curve reflects a government quota of 6,000 magazines? img
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