ECON test 2 practice
the domestic price of sugar will equal the world price of sugar
After a country goes from disallowing trade in sugar with other countries to allowing trade in sugar with other countries
the losses of domestic consumers of the good exceed the gains of domestic producers of the good
When a country allows trade and becomes an exporter of a good, which of the following is NOT a consequence
leads to a surplus
a price floor is binding if it
domestic sellers better off and domestic buyers worse off
a tariff on a product makes
the demand curve downward, causing both the price received by sellers and the equilibrium quantity to fail
a tax legally imposed on buyers of bicycles would shift
area below the demand curve and above the price
consumer surplus in a market can be represented by the
the sum of producer surplus and consumer surplus is maximized
efficiency in a market is achieved when
figure 8-4
figure 8-4
figure 9-5
figure 9-5
graph 7-11
graph 7-11
graph 9-1
graph 9-1
a shortage of computers would develop
if a binding price ceiling were imposed in the computer market
the consumer does not purchase the good
if a consumer places a value of $15 on a particular good and if the price of the good is $17, then
the country will be an importer of the good
if a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,
sellers will bear most of the burden of the tax
if a tax is imposed on a market with elastic demand and inelastic supply
look at figure 7-6
look at figure 7-6
reading a graph
look at practice test for figure 6-8
look at table 7-1
look at table 7-1
shortage of 20 units
looking at graph, if government imposes a price ceiling in this market at a price of $5, the result would be a
a market in equilibrium
looking at graph, if the government imposes a price floor of $5 in this market, the result would be
lowest price employers may pay for labor
minimum wage laws dictate the
cause surpluses and shortages to persist since price cannot adjust to the market equilibrium price
price ceilings and price floors that are binding
the equilibrium price is below the price ceiling
suppose a price ceiling is NOT BINDING; this means that
the larger is the deadweight loss of the tax
suppose a tax of $1 per unit is imposed on a good. The more elastic the supply of the good, other things equal
$6800 and $600
suppose a tax of $4 per unit is imposed on a good and the tax caused the equilibrium quantity of the good to decrease from 2000 units to 1700 units. The tax decreases consumer surplus by $3000 and it decreases producer surplus by $400. Total tax revenue and the dead weight loss of the tax are
demand is more inelastic than the supply
suppose that a tax is placed on books. If the buyers bear the majority of the tax burden, we know that the
taxes reduce the sum of producer and consumer surpluses by more than the amount of tax revenue taxes prevent buyers and sellers from realizing some of the gains from trade/taxes cause marginal buyers and marginal sellers to leave the market, causing the quantity sold to fall. (all of the above)
taxes cause deadweight losses because
deadweight loss
the loss in total surplus resulting from a tax is called
consumer surplus plus producer surplus
total surplus in a market is equal to
the gains of the winners exceed the losses of the losers
trade raises the economic well being of a nation in the sense that
how the allocation of resources afects economic well-being
welfare economics is the study of
lower than the price floor
when a price floor is binding, the equilibrium price is
buyers and sellers hare the burden of the tax
which is the most correct statement about the burden of a tax imposed on buyers of sugar
a tax burden falls most heavily on the side of the market that is les elastic
which of the following is the most correct statement about tax burdens
the greater are the price elasticities of supply and demand, the greater is the deadweight loss
which of the following statements is correct regarding a tax on a good and the resulting deadweight loss
measures the value that a buyer places on a good
willingness to pay