ECON

When a good is taxed,

...only buyers are made worse off, because they ultimately bear the burden of the tax.

If a consumer places a value of $15 on a particular good and if the price of the good is $17, then the

b.consumer does not purchase the good.

The price elasticities of supply and demand affect

both the size of the deadweight loss from a tax and the tax incidence.

If the size of a tax increases, tax revenue

may increase, decrease, or remain the same.

What happens to the total surplus in a market when the government imposes a tax?

Total surplus decreases.

If T represents the size of the tax on a good and Q represents the quantity of the good that is sold, total tax revenue received by government can be expressed as

TxQ

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

a. domestic producers gain and domestic consumers lose.

If Gina sells a shirt for $40, and her producer surplus from the sale is $32, her cost must have been

c. $8.

In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that

d. Moldova is a price taker.

The loss in total surplus resulting from a tax is called

d. inefficiency.

A simultaneous increase in both the demand for MP3 players and the supply of MP3 players would imply that

d. the value of MP3 players to consumers has increased, and the cost of producing MP3 players has decreased.

For any country, if the world price of zinc is higher than the domestic price of zinc without trade, that country should

export zinc, since that country has a comparative advantage in zinc.

29. Trade raises the economic well-being of a nation in the sense that

the gains of the winners exceed the losses of the losers.

Assume, for the U.S., that the domestic price of pineapples without international trade is lower than the world price of pineapples. This suggests that, in the production of pineapples,

a. the U.S. has a comparative advantage over other countries and the U.S. will export pineapples.

Which of the following will cause an increase in consumer surplus?

b.a technological improvement in the production of the good

Total surplus is represented by the area

between the demand and supply curves up to the point of equilibrium.

When a good is taxed, the burden of the tax

falls more heavily on the side of the market that is more inelastic.

Inefficiency exists in an economy when a good is

not being consumed by buyers who value it most highly.

When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,

producer surplus increases and total surplus decreases in the market for that good.