true/ false econ unit 2

demand = supply =

demand = buyers supply = sellers

a market generates a neg externality that hasn't been internalized resulting in an equilibrium quantity that is less than the optimal quantity

false

a market that generates a neg externality that has not been internalized results in an equilibrium quantity that is less than the optimal quantity

false

a pos externality is an external benefit affecting the buyers in the market while a neg externality is an external cost affecting the sellers in the market

false

a positive externality is an external benefit affecting the buyers in a market while a neg externality is an external cost the sellers in a market

false

an increase in minimum wage will likely help all low skill workers because they will receive higher wages than they otherwise would

false

producer surplus is the area below the price and above the supply curve up to the quantity sold at this price

false

producing/ consuming more of a good always makes you better off

false

to reduce pollution by some targeted amount, it is most efficient for each firm that pollutes to reduce its pollution by an equal amount

false

to reduce pollution by some targeted amount, it is most efficient if each firm that pollutes reduced its pollution by an equal amount

false

when a tax is placed on a good, the revenue the government collects is generally exactly equal to the loss of consumer and producer surplus from the tax

false

a tax causes a DWL beause it eliminates some of the potential gains from trade as buyers and sellers are no longer exchange some units

true

a tax will generate a smaller DWL if demand is inelastic

true

a tax will generate a smaller deadweight loss if demand is inelastic

true

consumer surplus is the area above the price and below the demand curve up to the quantity bought at this price

true

consumer surplus is the buyers WTP - sellers opt cost of production

true

if a market generates a neg externality a tax will move the market toward the efficient outcome

true

if a market generates a neg externality in production, the marginal social cost curve is above the supply curve

true

if a market generates a neg externality, a Pigouvian tax will move the market toward the efficient outcome

true

if a market generates a pos externality in consumption, the marginal social value curve is above the demand curve

true

if a market generates a positive externality in consumption, the marginal social value curve is above the demand curve

true

if there are a few substitutes for a particular good, the burden of the tax in the market for that good will be greater for the buyers compared to the sellers

true

if there are few substitutes for a particular good, the burden of a tax in the market for that good will be greater for the buyers compared to the sellers

true

market generates a neg externality in production, the marginal social cost curve is above the supply curve

true

producer surplus is the sellers opt cost of production minus the buyers WTP

true

the excess demand for housing caused by a binding constraint could result in an excess demand in the future if demand were to increase significantly

true

the height of the demand curve at a given quantity is the buyers value from consuming the marginal unit

true

the height of the supply curve at a given quantity is the sellers opt cost of producing the marginal unit

true

the market equilibrium outcome is efficient because it allocates the production of the good to the sellers with the lowest opt cost of production while allocating the consumption of the good to the buyers w/ the highest value from consumption

true