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  3. Liberty ECON 213 InQuizitive Ch. 5 Answers Complete Solutions

Liberty ECON 213 InQuizitive Ch. 5 Answers Complete Solutions

 

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Select the two situations with the highest total surplus. Bonnie buys flowers for $2.25 less than she was willing to pay. She bought them from a seller would have been willing to receive $3 less from the sale. Don wanted to buy a scooter for no more than $5, but was only able to find a producer who would sell for $15. Kevin wanted to spend $50 on a dishwasher and bought one at $45 from a producer who was hoping to receive $40. Jay buys a house for $40,000 less than he was willing to pay. He bought his home from sellers who received $2,000 more than they were willing to sell for.

Which of the following are examples of excise taxes? Select all that apply.

Pedro wants to buy a new car. The most he is willing to pay is $21,000. If he finds a car for $18,000, what will his consumer surplus be?

Assume that the government places a tax on the buyers of televisions, and the demand curve decreases. What is the price without the tax, and what prices do the consumers pay and producers receive after the tax is imposed? Drag the labels to the corresponding dotted gray lines on the graph.

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Determine whether each of the following actions is based on equity or efficiency. Match the correct term with each action. A children’s baseball league makes a rule that all team members must receive some amount of playing time in every game. A doughnut shop offers a discount on all doughnuts purchased after 5 p.m. to reduce the number of doughnuts the shop must discard at the end of the day. A university adopts a policy to make sure that there are no unused classrooms during the school day.

Suppose the government imposes a tax on car producers. Which graph would most likely illustrate the result?

Taxes don’t always cause deadweight loss.

Nick wants to buy a box of crackers for $1.75. Cracker producers want to sell their product for $1.25. When Nick gets to the store, he finds that the crackers he wants to buy are marked $1.68. What is the total surplus generated from this transaction?

Raising tax rates will always raise tax revenue.

What might happen if the government raised the excise tax on televisions from $5 to $15? The government will not be able to collect any more tax revenue. Deadweight loss for televisions would increase because producers would sell fewer units at a higher price. Consumer surplus would increase. Producer surplus would increase.

The price of a car wash is $20. Jeff is willing to wash a car for $10, while the lowest amount Steve will accept to wash a car is $15. Drag the labels to the correct part of the graph to indicate each producer’s surplus.

Eric enjoys making pizza. When he makes pizza for his friends, sometimes Eric cares about how the pieces are distributed, and sometimes he doesn’t. Which of Eric’s actions are associated with equity, and which of his actions are associated with efficiency?

Jennifer, Tony, and Becky are students in a history class. All three plan on selling their textbooks back at the end of the year. The bookstore will buy each textbook back for $95. Jennifer’s willingness to sell is $87. Tony wants to get at least $45 for his book, and Becky wants to sell her book back for $105. Place each student’s producer surplus in order, from highest to least.

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