chapter 4 Econ

A black market is

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

Economic surplus in a market is the sum of _____ surplus and _____ surplus. In a competitive market, with many buyers and sellers and no government restrictions, economic surplus is at a _____ when the market is in _____.

consumer; producer; maximum; equilibrium

A price ceiling is a legally determined (1)_________ price that sellers may charge. A price floor is a legally determined (2)_______ price that sellers may receive.

maximum, minimum

Consumer and producer surplus measure the _____ benefit rather than the _____ benefit.

net, total

"Rent controls, government farm programs, and other price ceilings and price floors are bad." This is an example of a

normative statement. The statement is concerned with what should be.

An increase in consumer income for a normal good will

shift demand outward.

Tax incidence is

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

Economic efficiency is

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.

When the government imposes price floors or price ceilings,

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