Suppose Jolene buys apples weekly. If the price of apples were to drop, Jolene would experience in . a decrease an increase a decrease an increase a decrease total revenue consumer surplus her budget constraint marginal utility willingness to pay
- Suppose Jolene buys apples weekly. If the price of
apples were to drop, Jolene would experience
in
.
- a decrease
- an increase
- a decrease
- an increase
- a decrease
total revenue
her budget constraint
willingness to pay
Suppose the government levies a tax of $0.50 per pack on
the buyers of cigarettes. Suppose also that the price
ity of demand for cigarettes is 1.2 and the price elasticity of
supply is 0.7.
- Because this tax is levied on the sale of a specifi c good,
it is
- an excise tax.
- a progressive tax.
- a regressive tax.
- a proportional tax.
- a lump-sum tax.
- After this tax is levied, total surplus will
, and the price received by producers (not including the tax)
will
.
- increase
- decrease
- increase
- decrease
- increase
increase by exactly $0.50
fall by exactly $0.50
fall by less than $0.50
fall by less than $0.50
increase by more than $0.50
- If economists were to study the tax incidence in this
cigarette market, they would conclude which of the fol-
lowing?
- The burden of this tax falls entirely on consumers.
- The burden of this tax falls entirely on producers.
- The burden of this tax falls equally on consumers
and producers.
- The burden of this tax falls more on consumers than
on producers.
- The burden of this tax falls more on producers than
on consumers.
- Jill is willing to sell her used calculator for $20. Her
friend Jack is willing to pay $90 for a used calculator.
They agree and trade at a price of $50. Which of the fol-
lowing is correct?
- Jill’s cost is $50.
- Jack’s individual consumer surplus is $30.
- Jill’s individual
producer surplus is $30. - Jack’s budget line is $90.
- Jill’s
deadweight loss is $70.
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