Which of the following statements is correct? Deadweight loss is: Select one: O a. Borne entirely by consumers. O b. The society's loss in total surplus resulting from inefficient level of production. O c. The loss in producer surplus resulting from inefficient level of consumption. O d. Borne entirely by producers.

Which of the following statements is correct? Deadweight loss is: Select one: O a. Borne entirely by consumers. O b. The society's loss in total surplus resulting from inefficient level of production. O c. The loss in producer surplus resulting from inefficient level of consumption. O d. Borne entirely by producers.

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 6PA

See similar textbooks

Similar questions

Which of the following statements is correct? Deadweight loss is: Select one: O a. Borne entirely by consumers. O b. The society's loss in total surplus resulting from inefficient level of production. O c. The loss in producer surplus resulting from inefficient level of consumption. O d. Borne entirely by producers. is page Australian Institute of Business & Management
When the price of gasoline was very high in thesummer of 2008, several U.S. presidential candidates proposed implementing a national price ceiling to keep fuel affordable. How would this policyhave affected producer and consumer surplus?How would it have affected total surplus?
Assume that demand in the market for consoles is QD = 1000 - P and supply is QS = 2P - 200. d) Suppose that the government imposed a $300 price ceiling on consoles. How many units are sold? e) What is consumer surplus now? What is producer surplus? What is the "deadweight loss" from this policy?
Suppose the demand for a product is given by P = 30 - 3Q. Also, the supply is given by P = 10 + Q. If a $4 per-unit excise tax is levied on the buyers of a good, the deadweight loss created by this tax will be о $24 O None of these O $4 0 $8 О $16
The market demand and supply functions for milk are: QD = 2,000 - 500P and QS = 800 + 100P. To help milk producers, the Department of Agriculture is considering legislation that would put a price floor at R2.25 per unit. . d) If this price floor is implemented, how many surplus units of milk are being produced? e) How much would government need to spend to purchase the surplus units? f) What is the change in consumer and producer surplus due to the price floor? g) When the government regulates the price of a good to be no lower than some minimum level. Can such a minimum price make producers as a whole worse off? Explain.
The market for pizza is characterized by adownward-sloping demand curve and an upwardsloping supply curve.a. Draw the competitive market equilibrium.Label the price, quantity, consumer surplus, andproducer surplus. Is there any deadweight loss?Explain.b. Suppose that the government forces eachpizzeria to pay a $1 tax on each pizza sold.Illustrate the effect of this tax on the pizzamarket, being sure to label the consumer surplus,producer surplus, government revenue, anddeadweight loss. How does each area compare tothe pre-tax case?c. If the tax were removed, pizza eaters and sellerswould be better off, but the government wouldlose tax revenue. Suppose that consumers andproducers voluntarily transferred some of theirgains to the government. Could all parties(including the government) be better off than theywere with a tax? Explain using the labeled areas inyour graph
use diagramsa. What is the effect on the equilibrium price and quantity traded in market of theintroduction of a new technology that reduces costs of production for all firms?b. What is the effect on the equilibrium price and quantity traded in a market of a changein tastes that reduces the demand for the product?c. What is the effect on the equilibrium price and quantity traded in a market of theimposition of a tax per unit sold on suppliers?d. What is the effect on the equilibrium price and quantity traded in a market of thepayment of a subsidy per unit sold paid to suppliers?
Q^d= 9.5 - 2p Q^s= o.6p Tax. Suppose that the government imposes a tax equal to T = 0.50 which buyers must pay for every donut they purchase. (a) How does this tax change the supply and/or demand curve for donuts? (b) Solve for the new equilibrium price and quantity of donuts. Give the price paid by the buyer and the price received by the seller. (c) Draw a single supply and demand diagram that compares the equilibrium with and without the tax. Be sure to indicate the equilibrium quantity of donuts sold as well as the price paid by buyers and the price received by sellers in each case. On the same diagram, indicate the areas which represent consumer and producer surplus, tax revenue and the deadweight loss arising from this tax.
Consider an ad-valorem tax on a good X. The Demand for good X is constant elasticity with elasticity -2. The Supply for good Y is constant elasticity with elasticity 3. Consider the same setting as for the previous question. When a tax of 1% of the price is imposed on good X, then equilibrium quantity of X exchanged declines by what percentage?
For Frisbees, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. A tax of $20 per unit is imposed on blue Frisbees. The tax reduces the equilibrium quantity in the market by 300 units. The deadweight loss from the tax is. O. $3,000 O. $6,000 O. $1,000 O. $2,000
Assume, the market price of milk is R.O 1.5 per liter. At this price, the buyers and sellers are able to buy and sell whatever they want. There is no shortage or surplus of milk in the market. From this context, analyze the statements given below and choose the correct statement. a. All of the options b. The price R.O 1.5 is the market clearing price of milk c. At the price R.O 1.5, the demand and supply of milk will be equal d. The price R.O 1.5 is the equilibrium price of milk
Q)Assume standard downward sloping demand for subways rides. At a per-trip price of $4,you take 30 trips per month. Alternatively, you can purchase a monthly pass whose price is $120for unlimited rides. If you purchased the monthly pass, you _____ consumer surplus as if youpaid $4 per ride and you would take _____ trips.A. get the same; the same number of.B. get the same; more.C. get more; more.D. get more; the same number of.E. might get more or less; the same number of.