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Microeconomics Chapter 6 Test
Terms in this set (15)
If there are a large number of firms, each of which is so small that it takes the market price as given, then the market is characterized by:
Refer to Figure 6.6, which shows a market for taxi medallions. If the number of taxi licenses is reduced from Q2 to Q1, the consumer surplus from consuming taxicab services is represented by:
Suppose that the supply of gasoline increases. Price will ________ and consumer surplus will ________.
Suppose that the price of a donut is $1 each. Lorena is willing to pay $2 for the first donut, Ricky is willing to pay $1.80 for the second donut, Jennifer is willing to pay $1.50 for the third donut, and Betty is willing to pay $1.20 for the fourth donut. In equilibrium, what is the total consumer surplus from the consumption of donuts?
Refer to Table 6.1. When quantity = 3, this market is ________ because ________.
inefficient; willingness to pay > marginal cost
Refer to Figure 6.4. Suppose that the current price is set at C and Q1 units of a good are traded. Which of the following statements is incorrect?
Total surplus would increase should the price fall
Assume that the price of a DVD player is $50. If Joshua is willing to pay $50 for thatDVD player, his consumer surplus is:
In Figure 6.1, the consumer surplus is equal to:
Refer to Figure 6.3. On this graph, the total surplus of the market is maximized when the price is at point
If demand is inelastic and the government decides to raise the tax on water, then the price for water will increase by a ________ amount and water consumers will bear a ________ share of the tax.
In Figure 6.2, the producer surplus is:
The difference between the maximum amount that a consumer is willing to pay for a product and the price that is paid for the product describes:
Refer to Figure 6.8. If your city imposes a tax of $100 per apartment, the new monthly rent landlords receive after the tax is:
Suppose the market price for a cup of coffee is $1.25. If Coffee Express's marginal cost of making that cup of coffee is $0.75, its producer surplus from that cup of coffee is:
The difference between the price a producer receives for a product and the minimum amount a producer is willing to accept for that product is:
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