Microeconomics Chapter 6

If a price ceiling is set at $8 in the market shown in the graph, which areas would represent total surplus? A. A +B+C+D+ E+F+G B. A+B+ C+D+E C. A+C+E D. A+B+ C +D+E+F

C. A+C+E

The graph shown portrays a subsidy to buyers. The subsidy causes units to be sold in this market. 50 more 150 more 100 fewer 50 fewer

A. 50 more

The graph shown portrays a subsidy to buyers. What will result from this subsidy? A. A higher quantity wll be bought and sold at a higher price. B. Customers will be worse off than before the subsidy was placed. C. Producers wiII be worse off than before the subsidy was placed. D. None of these are true.

A. A higher quantity will be bought and sold at a higher price.

The graph shown demonstrates a tax on buyers. How much are buyers being taxed on each A. $4 B. $8 C. $12 D. $16

C. $12

The graph shown demonstrates a tax on sellers. What is the amount of tax revenue being generated? A. $150 B. $80 C. $310 D. $135

A. $150

If a price ceiling is set at $8 in the market shown in the graph: A. some surplus will be transferred from consumer to producer. B. some surplus will be transferred from producer to consumer. C. all consumers wll be better off. D. all producers will be better off.

B. some surplus will be transferred from producer to consumer.

The graph shown portrays a subsidy to buyers. With the subsidy, sellers sell. units, and the post-subsidy price received for each one is 100; $46 100: $30 150; $40 150: $24

C. $150; $40

If a price ceiling is set at $8 in the market shown in the graph: A. a shortage of 7 units will occur. B. a shortage of 15 units will occur. C. ashortage of 23 units will occur. D. a shortage of 8 units will occur.

C. a shortage of 23 units will occur.

The graph shown demonstrates a tax on buyers. The post-tax price paid by buyers is _________and the post-tax price received by sellers is _______The difference between them is the _________. A. $34: $22 amount of the tax B. $30; $18; tax burden C. $22 ; $34, tax wedge D. $30: $18. amount of the tax

A. $34: $22 amount of the tax

Suppose a $5 subsidy to buyers is imposed on the market in the graph shown. After the subsidy is in place, the post-subsidy price paid by buyers is ___________ and the post-subsidy price received by sellers is ____________. A. $6, $11 B. $13: $8 C. $11: $6 D. $3; $8

A. $6; $11

The graph shown demonstrates a tax on buyers. How many fewer units are being sold due to the imposition of a tax on this market? A. 6. B. 9 C. 3 D. 12

C. 3

Which action could cause the price ceiling shown in the graph to become non-binding? A. An Increase In demand (shift to the right) B. A decrease In supply (shift to the left) C. An Increase In supply (shift to the right) D. None of these would cause the price celling to become non-binding.

C. An increase in supply (shift to right)

Suppose a $5 tax is imposed on sellers in the market shown in the graph. Which of the following statements is true? |. Producers bear more of the tax burden than consumers. II. The tax-inclusive price (or after-tax price) received by sellers is $8. III. The deadweight loss is $15,000. A. I only B. II and III only C. I and II only D. I, II, and III

C. I and II only

If the intended aim of the price floor set at $12, as shown in the graph, was net increase in the well-being of producers, then positive analysis would consider the policy to be: A. effective if area C is larger than area E. B. effective if areas E+B are larger than areas C+D+F. C. Ineffective if area B is larger than area E. D. Ineffective if areas E+B are larger than areas A+C+D+F.

A. effective if area C is larger than area E.

The graph shown portrays a subsidy to buyers. What is the amount of the subsidy per unit of this good? $22 $16 $10 $6

B. $16

The graph shown portrays a subsidy to buyers. What is the amount of money the government has spent on this subsidy? A. $3,600 B. $2,400 C. $6,000 D. $800

B. $2,400

Consider the graph shown. What would most likely be the cause of a shift from D1 to D2? A. A tax on sellers B. A tax on buyers C. A subsidy for sellers D. A subsidy for buyers

B. A tax on buyers

Which kind of tax is mostly demonstrated by the graph shown? A. A tax on sellers B. A tax on buyers C. A tax on big corporations D. None of these is correct

B. A tax on buyers

If a price ceiling is set at $8 in the market shown in the graph, which area(s) would represent deadweight loss? A. F+G B. B+D C. E D. B+D+F+G

B. B+D

Suppose a tax is imposed on buyers in the market shown in the graph. What area(s) will represent deadweight loss? A. E B. D+H C. K. D. I + M

B. D + H

Suppose a price floor is set at $10 in the market shown in the graph. Which of the following statements is true? A. A shortage of five units occurs B. Excess supply of five units occurs C. Total surplus Increases D. Deadweight loss falls

B. Excess supply of five units occurs

A price ceiling that is set at $8 in the market shown in the graph is: A. non-binding and would not affect the market. B. binding and would cause a shortage. C. binding and would cause excess supply. D. non-binding and would not prevent the market from reaching equilibrium.

B. binding and would cause a shortage.

Suppose the market in the graph shown is in equilibrium, If a price floor is set at $13, the total number of units traded: A. falls by 5. B. falls by 3. C. increases by 2 D. Increases by 5,

B. falls by 3.

Suppose a $10 tax is imposed on sellers in the market shown in the graph. What will be the deadweight loss? A. $15,000 B. $20,000 C. $ 12.500 D. $ 10,000

D. $10,000

Suppose a $4 tax is imposed on sellers in the market shown in the graph. The tax-inclusive price (or ofter-tax price) paid by the buyer will be _________and the tax-inclusive price (or after-tax price) received by the seller will be _______ A. $12; $8 B. $11; $5 C. $8; $4 D. $10; $6

D. $10; $6

The graph shown portrays a subsidy to buyers. What area(s) represent the deadweight loss that arises from this subsidy? A. D+H B. K C. E D. I + M

D. I + M

The graph shown demonstrates a tax on buyers. Which of the following can be said about the effect of this tax? A. The tax creates a shortage, and rationing must occur. B. The tax creates excess supply and the government must buy the excess. C. The tax creates a shortage, and the government must regulate the market. D. None of these are correct.

D. None of these are correct.

The graph shown demonstrates a tax on sellers. Which of the following can be said about the effect of this tax? A. The tax Increases producer surplus. B. Consumers prefer this tax over a tax levled on buyers. C. The deadwelght loss would be larger If this tax had been imposed on buyers. D. The tax decreases consumer surplus

D. The tax decreases consumer surplus

If a price ceiling is set at $8 in the market shown in the graph: A. excess supply of 7 units will occur. B. excess supply of 15 units willl occur. C. excess supply of 23 units will occur. D. no excess supply wll occur.

D. no excess supply wll occur.

Suppose a price floor is set at $10 in the market shown in the graph. Which of the following statements is true? I. All consumers are worse off due to the higher price. II. All producers are better off, because producer surplus increases. III. The economy as a whole is off, because total surplus falls.

I and Il only