Question 1

Calculate consumer surplus for the market in equilibrium above. (Note: to calculate the area of a right triangle, multiply the base times the height, then divide the product by 2. Give your answer as a whole number.)

Question 2

Calculate producer surplus for the market in equilibrium above. (Give your answer as a whole number)

Question 3

Refer to the graph above. Given a tax of t on suppliers, revenue collected by the government is

A and B. Suppliers pay A. Consumers pay B
A, B, C. Suppliers pay A and B. Consumers pay C
A, B, C. Suppliers pay B and C. Consumers pay A
A and B. Suppliers pay B. Consumers pay A

Question 4

According to the standard market model and neoclassical welfare analysis, a tax levied against a consumer good will necessarily come mostly out of consumer surplus if...

Consumer are directly responsible for paying the tax
Demand is relatively elastic
Demand is relatively inelastic
Producers are directly responsible for paying the tax

Question 5

In the market depicted above, suppose a price floor holds the price at $8.15. Calculate consumer surplus for this situation. (Show your answer as a decimal - e.g. 12.1)

Question 6

In the market depicted above, suppose a price floor holds the price at $8.15. Calculate producer surplus for this situation. (Show your answer as a decimal - e.g. 12.1)

Question 7

In the market depicted above, suppose a price floor holds the price at $8.15. Calculate deadweight loss for this situation. (Show your answer as a whole number)

Question 8

What English economist likened supply and demand to the blades of a pair of scissors?