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ECON 212 || ALL QUESTIONS CORRECTLY SOLVED!!
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  • Module
  • ECON 212
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  • ECON 212

A consumer's willingness to pay reflects the correct answers minimum price at which an individual would buy a given good or service Consumers' willingness to pay for a good is used to derive the _____ for that good correct answers cost production Consumer surplus is represented by the area __...

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  • August 18, 2024
  • 6
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • a consumers willingness to pay reflects the

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  • ECON 212
  • ECON 212

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ECON 212 || ALL QUESTIONS CORRECTLY SOLVED!!
A consumer's willingness to pay reflects the correct answers minimum price at which an
individual would buy a given good or service

Consumers' willingness to pay for a good is used to derive the _____ for that good correct
answers cost production

Consumer surplus is represented by the area _____ the demand curve and _____ the price
that the consumer pays. correct answers below; above

Total Surplus is correct answers the sum of consumer & producer surplus

Markets work because they allocate sales to the sellers who are willing and able to produce
the good at the lowest cost. This statement shows how markets maximize: correct answers
producer surplus

deadweight loss correct answers the fall in total surplus that results from a market distortion,
such as a tax

(T/F) Policies designed to promote efficiency will never decrease equity; however, policies
designed to promote equity will usually decrease efficiency correct answers FALSE

Coffee and tea are substitutes in consumption. If there is an increase in the price of coffee,
assuming a positively sloped supply curve and a negatively sloped demand curve, total
surplus in the tea market: correct answers will increase

Government policies designed to promote efficiency: correct answers usually do so at the
expense of equity.

If the government intervened in the market by lowering the price of a good below the
equilibrium price, which scenario would NOT occur? correct answers The outcome would be
efficient

If the government intervened in the market by lowering the price of a good below the
equilibrium price, which scenario's WOULD occur? correct answers - Total surplus would be
lower.

- Some consumers would receive an increase in consumer surplus.

- Producers would likely lose some producer surplus.

To be binding, a price ceiling must be set at a price _____ the equilibrium price. correct
answers lower than

Hands off. No government intervention in business. Free market/free trade correct answers
Laissez-faire policy

A legal minimum on the price at which a good can be sold correct answers price floor

, Hugo Chávez was the president of Venezuela. Venezuela is a major producer of oil products,
which remain a critical component of Venezuela's economy. Suppose President Chávez
wanted to increase his popularity with the citizens of Venezuela and enacted a government
policy to reduce the price of gasoline sold at state-owned gas stations to 50% of the previous
price. This policy is called a: correct answers price ceiling

price ceiling correct answers A legal maximum on the price at which a good can be sold

When the minimum wage increases, which outcome is MOST likely? correct answers
Unemployment among unskilled workers increases

When the minimum wage increases, which outcome is NOT most likely? correct answers A)
Skilled workers will outnumber unskilled workers.
B)
Unemployment among skilled workers decreases.

D)
Fewer workers are willing to work off the books.

Farmers in developing countries want the United States to reduce the subsidies that it gives to
U.S. farmers because subsidized agricultural products from the United States: correct answers
lead to agricultural surpluses and lower prices for farmers in developing countries.

quantity control (quota) correct answers an upper limit on the quantity of some good that can
be bought or sold

a limited or fixed number or amount of people or things, in particular.

Example of quantity control? correct answers limits on the number of red snappers that can
be caught in the Gulf of Mexico

The amount that consumers are willing to pay for the quota limit quantity is the: correct
answers demand price

The difference between the demand price and the supply price at the quota limit amount is
the: correct answers quota rent

Assuming that U.S. and French wines are substitutes in consumption, if the U.S. government
imposes a quota on the amount of French wine allowed into the United States and the quota is
set at a quantity below equilibrium, the price of French wine in the United States will _____
while the price of the U.S.-produced wine will _____. correct answers increase; increase

Which statement(s) is/are TRUE?

I. Quantity controls set below the market equilibrium quantity drive a wedge between the
demand price and the supply price of the good.

II. The difference between the demand price and the supply price at the quota limit is
consumer surplus. correct answers I only

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