Microeconomics chapter 4, SEU

Marginal cost is

Figure 4-1



Figure 4-1 shows Arnold's demand curve for burritos.


Refer to Figure 4-1. If the market price is $1.00, what is the consumer surplus on the third burrito?

Suppliers will be willing to supply a product only if

In a competitive market equilibrium

Economic efficiency in a competitive market is achieved when

Deadweight loss

Economic surplus

refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3, what changes in the market would result in an economically efficient output?

If equilibrium is achieved in a competitive market, then

Figure 4-6 shows the market for granola. The market is initially in equilibrium at a price of P1 and a quantity of Q1. Now suppose producers decide to cut output to Q2 in order to raise the price to P2.


Refer to Figure 4-6. What area represents consumer surplus at P2?

Figure 4-6 shows the market for granola. The market is initially in equilibrium at a price of P1 and a quantity of Q1. Now suppose producers decide to cut output to Q2 in order to raise the price to P2.


Refer to Figure 4-6. What area represents producer surplus at P2?

The sum of consumer surplus and producer surplus is equal to

Table 4-7

Hourly Wage
(dollars) Quantity of Labor Supplied Quantity of Labor Demanded
$7.50 530,000 650,000
8.50 550,000 630,000
9.50 570,000 610,000
10.50 590,000 590,000
11.50 610,000 570,000
12.50 630,000 550,000
Table 4-7 shows the demand and supply schedules for the labor market in the city of Pixley.


Refer to Table 4-7. What is the equilibrium hourly wage (W) and the equilibrium quantity of labor (Q)?

Table 4-7

Hourly Wage
(dollars) Quantity of Labor Supplied Quantity of Labor Demanded
$7.50 530,000 650,000
8.50 550,000 630,000
9.50 570,000 610,000
10.50 590,000 590,000
11.50 610,000 570,000
12.50 630,000 550,000
Table 4-7 shows the demand and supply schedules for the labor market in the city of Pixley.


Refer to Table 4-7. If a minimum wage of $11.50 an hour is mandated, what is the quantity of labor demanded?

Table 4-7

Hourly Wage
(dollars) Quantity of Labor Supplied Quantity of Labor Demanded
$7.50 530,000 650,000
8.50 550,000 630,000
9.50 570,000 610,000
10.50 590,000 590,000
11.50 610,000 570,000
12.50 630,000 550,000
Table 4-7 shows the demand and supply schedules for the labor market in the city of Pixley.


Refer to Table 4-7. If a minimum wage of $11.50 is mandated, there will be a

To affect the market outcome, a price ceiling

Economists refer a to a market where buying and selling take place at prices that violate government price regulations as

Which term refers to a legally established minimum price that firms may charge?

Figure 4-9 shows the demand and supply curves for the almond market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at Pf.


Refer to Figure 4-9. What area represents consumer surplus after the imposition of the price floor?

Figure 4-9 shows the demand and supply curves for the almond market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at Pf.


Refer to Figure 4-9. What area represents the deadweight loss after the imposition of the price floor?

The minimum wage is an example of

To affect the market outcome, a price floor

Figure 4-10 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R0.


Refer to Figure 4-10. What is the area that represents consumer surplus after the imposition of the ceiling?

Figure 4-10 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R0.


Refer to Figure 4-10. What is the area that represents the producer surplus after the imposition of the ceiling?

Figure 4-10 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R0.


Refer to Figure 4-10. What area represents the deadweight loss after the imposition of the ceiling?

Figure 4-15 shows the market for beer. The government plans to impose a per-unit tax in this market.


Refer to Figure 4-15. The price buyers pay after the tax is

Figure 4-15 shows the market for beer. The government plans to impose a per-unit tax in this market.


Refer to Figure 4-15. For each unit sold, the price sellers receive after the tax (net of tax) is

Figure 4-15 shows the market for beer. The government plans to impose a per-unit tax in this market.


Refer to Figure 4-15. How much of the tax is paid by sellers?

The difference between the highest price a consumer is willing to pay for a good and the price the consumer actually pays is called

The area ________ the market supply curve and ________ the market price is equal to the total amount of producer surplus in a market.

In a competitive market, the demand curve shows the ________ received by consumers and the supply curve shows the ________.

Rent control is an example of