econ quiz 3

If the market demand for a good is inelastic and the supply is elastic, which of the following is true when there is an increase in sales tax?

Consumers will bear most of the burden of the tax.

In the diagram above, if there is a price ceiling set at P1, consumer surplus will be represented by the area

P3ACP1

The graph above shows the market for good X The letters in the graph denote the enclosed areas If the government imposes an excise tax of t dollars on each unit of good X, which of the following represents the consumer surplus, producer surplus, and deadweight loss after the imposition of the tax?

Consumer Surplus: A Producer Surplus: G Deadweight Loss: D+E

After the government imposed a $0.20 per gallon tax on gasoline, the price of a gallon of gasoline increased from $1.00 to $1.15. Which of the following statements is true?

Consumers bear most, but not all, of the tax burden.

What is the price paid by consumers and the net price received by producers after the tax is paid?

$10.45 $9.45

Assume that the government imposes a $4$4 per-unit tax on sellers of a good in the market described by the graph above. What are the price paid by buyers, the after-tax price received by sellers, and the deadweight loss?

$8 $4 $200

Assume that the government imposes a binding price ceiling on a market for an inferior good. Which of the following is most likely to occur in the market if consumers' incomes increase?

The shortage in the market will decrease.

The equilibrium price for a good with a vertical supply curve and a downward-sloping demand curve is $20$20. If a binding price floor is set, which of the following will occur?

The sum of consumer and producer surpluses will decrease.

In a competition equilibrium consumer surplus is the area of

WYZ

Based on the graph above, the consumer surplus at the market equilibrium price and quantity is shown by which area?

ZMN

Following a prolonged power outage, the price of flashlights normally increases significantly. If cities had passed laws prohibiting price increases for flashlights, during power outages such laws would most likely

create a shortage of flashlights