eco test 2 pt 2

If the tax on a good is tripled, the deadweight loss of the tax

increases by a factor of 9

Suppose Rebecca needs a dog sitter so that she can travel to her sister's wedding. Rebecca values dog sitting for the weekend at $200. Susan is willing to dog sit for Rebecca so long as she receives at least $150. Rebecca and Susan agree on a price of $175. Suppose the government imposes a tax of $10 on dog sitting. The tax has made Rebecca and Susan worse off by a total of

$10

If the price elasticity of demand for a good is 6, then a 3 percent decrease in price results in

an 18 percent increase in the quantity demanded.

Get Smart University is contemplating an increase in tuition to enhance revenue. If GSU feels that raising tuition would enhance revenue, it is

assuming that the demand for university education is inelastic.

Suppose that in a particular market, the supply curve is highly elastic and the demand curve is highly inelastic. If a tax is imposed in this market, then the Group of answer choices

buyers will bear a greater burden of the tax than the sellers.

In the long run, the quantity supplied of most goods

can respond substantially to a change in price.

When a country allows trade and becomes an exporter of a good,

domestic producers become better off, and domestic consumers become worse off.

When a tax is placed on the buyers of a product, the

effective price received by sellers decreases, and the price paid by buyers increases. demand for the product decreases. size of the market decreases.

Milk has an inelastic demand, and beef has an elastic demand. Suppose that a mysterious increase in bovine infertility decreases both the population of dairy cows and the population of beef cattle by 50 percent. The change in equilibrium price will be

greater in the milk market than in the beef market.

If the labor supply curve is nearly vertical, a tax on labor

has little impact on the amount of work that workers are willing to do

If the government removes a binding price ceiling from a market, then the price paid by buyers will

increase, and the quantity sold in the market will increase.

At present, the maximum legal price for a human kidney is $0. The price of $0 maximizes

neither consumer nor producer surplus.

Assume for Guatemala that the domestic price of coffee without international trade is higher than the world price of coffee. This suggests that

other countries have a comparative advantage over Guatemala in the production of coffee, and Guatemala will import coffee.

Whether a good is a luxury or necessity depends on the

preferences of the buyer.

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor,

quantity demanded decreases. there is a surplus. quantity supplied increases.

The price elasticity of demand measures how much

quantity demanded responds to a change in price

Jerome says that he will spend exactly $25 each month on new apps for his mobile device, regardless of the price of apps. Jerome's demand for apps is

unit elastic

As the price elasticity of supply approaches infinity, very small changes in price lead to

very large changes in quantity supplied.

In a market, the marginal buyer is the buyer

who would be the first to leave the market if the price were any higher