Ch. 9 - Quiz

When the government imposes price floors or price​ ceilings,

A. some people​ win, some people​ lose, and there is a loss of economic efficiency.

Tax incidence is

A. the actual division of the burden of a tax between buyers and sellers in a market.

Economic efficiency is

B. a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumer surplus and producer surplus is at a maximum.

A black market is

C. a market in which buying and selling take place at prices that violate government price regulations.

_________________ surplus is the difference between the highest price a consumer is willing to pay and the price the consumer actually pays. This component of economic surplus is illustrated in the diagram by area ________________

Consumer, A

In the diagram to the​ right, illustrating a​ per-unit tax equal to P 2 - P 3​, tax revenue is represented by the areas ______ and the excess burden of the tax is represented by areas__________

D and F, E and G

The diagram to the right shows a market in which a price floor has been imposed. Identify the following ​(enter all values as integers​). a. The deadweight loss is ​$_________ b. The transfer of consumer surplus to producers is ​$________ c. Producer surplus with this price floor is ​$__________ d. Consumer surplus with this price floor is ​$________

a. $25,000 b. $25,000 c. $62,500 d.$12,500

In the​ diagram, marginal benefit ________________ is marginal cost at output level Upper Q2. This output level is considered economically ___________________.

is equal to efficient

A price ceiling is a legally determined ________________ price that sellers may charge. A price floor is a legally determined _____________________ price that sellers may receive. market clearing minimum neutral maximum

maximum, minimum