STUDY EXAM 2 - Quizzes/Study Guide

Public Policies toward externalities

- Command and control policies - Market based policies - internalizing externality

(The vertical distance between points E and F represents a tax in the market) The amount of deadweight loss as a result of the tax is a) $2.5 b) $6 c) $4 d) $5

a) $2.5

Producer surplus without the tax is a) $4 and producer surplus with the tax is $1 b) $1 and producer surplus with the tax is $4 c) $6 and producer surplus with the tax is $1.5 d) $1.5 and producer surplus with the tax is $6

a) $4 and producer surplus with the tax is $1

without trade, the equilibrium price of roses is a) $4 and the equilibrium quantity is 300 roses b) $3 and the equilibrium quantity is 200 roses c) $3 and the equilibrium quantity is 400 roses d) $2 and the equilibrium quantity is 500 roses

a) $4 and the equilibrium quantity is 300 roses

Consumer surplus without the tax is a) $6 and consumer surplus with the tax is $1.5 b) $1.5 and consumer surplus with the tax is $6 c) $4 and consumer surplus with the tax is $1 d) $1 and consumer surplus with the tax is $4

a) $6 and consumer surplus with the tax is $1.5

How large would a subsidy need to be in this market to move the market from the equilibrium level of output to the socially optimal level of output? a) $7 b) $9 c) $6 d) $10

a) $7

For a small country called Boxland, the equation of the domestic demand curve for cardboard is QD = 380 − 2P, where QD represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a ton of cardboard. For Boxland, the equation of the domestic supply curve for cardboard is QS = -60 + 3P, where QS represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard a) 102 tons of cardboard and Boxland's producers supply 357 tons of cardboard b) 102 tons of cardboard and boxlands producers supply 204 tons of cardboard c) 204 tons of cardboard and boxland's producers supply 357 tons of cardboard d) 204 tons of cardboard and boxlands producers supply 204 tons of cardboard

a) 102 tons of cardboard and Boxland's producers supply 357 tons of cardboard

The market equilibrium quantity of output is a) 3 units b) 4 units c) 5 units d) 6 units

a) 3 units

(use figure from Q15-Q6 ) How is the burden of the tax shared between buyers and sellers? Buyers bear a) 3/4ths of the burden, and sellers bear the 1/4th of the burden b) 2/3rds of the burden, and sellers bear the 1/3rd of the burden c) 1/2 of the burden, and sellers bear 1/2 of the burden d) 1/4th of the burden, and sellers bear 3/4ths of the burden

a) 3/4ths of the burden, and sellers bear the 1/4th of the burden

When a good is taxed a) Both buyers and sellers of the good are made worse off b) Only buyers are made worse off, because they ultimately bear the burden of the tax c) only sellers are made worse off, because they ultimately bear the burden of the tax d) neither buyers nor sellers are made worse off, since tax revenue is used to provide goods and services that would otherwise not be provided in a market economy

a) Both buyers and sellers of the good are made worse off

Government revenue raised by the tariff is represented by the area a) E b) B + E c) D + E + F d) B + D + E + F

a) E

In which of the following cases is the Coase Theorem most likely to solve the externality? a) Ed is allergic to his roommate's cat b) Chemicals from manufacturing plants in the Midwest are causing acid rain in Canada c) Polluted water runoff from farms is making residents of a nearby town sick d) Industrialization around the world is causing global warming

a) Ed is allergic to his roommate's cat

Which graph represents a market with a negative externality? a) Graph (b) only b) Graph (c) only c) Graph (a) d) Graphs (b) and (c)

a) Graph (b) only

Suppose the world price of a television is $300. Before Paraguay allowed trade in televisions, the price of a television there was $350. Once Paraguay began allowing trade in televisions with other countries, Paraguay began a) Importing televisions and the price of a television in paraguay decreased to $300 b) Importing televisions and the price of a television in paraguay remained at $350 c) Exporting televisions and the price of a television in paraguay decreased to $300 d) Exporting televisions and the price of a television in paraguay remained at $350

a) Importing televisions and the price of a television in paraguay decreased to $300

The size of a tax and the deadweight loss that results from the tax are a) Positively related b) Negatively related c) independent of each other d) equal to each other

a) Positively related

According to the Coase Theorem, private parties can solve the problem of externalities if: a) Property rights are clearly defined b) cost of bargaining is large c) number of parties involved its sufficiently large d) initial distribution of legal right favors the person causing the negative externatility

a) Property rights are clearly defined

The overuse of antibiotics leads to the development of antibiotic-resistant diseases. Therefore, the social optimal quantity of antibiotics is represented by point a) Q2 b) Q3 c) Q4 d) Q5

a) Q2

From the figure it is apparent that a) Uganda will export coffee if trade is allowed b) Uganda will import coffee if trade is allowed c) Uganda has nothing to gain either by imposing or exporting coffee d) the world price will fall if Uganda begins to allow its citizens to trade with other countries

a) Uganda will export coffee if trade is allowed

Suppose that the price falls from p2 to p1. Area B represents the a) Decrease in producer surplus that results from a downward-sloping demand curve b) Additional consumer surplus to initial consumers when the price falls c) Consumer surplus to new consumers who enter the market d) Decrease in producer surplus in the market price increases from p1 to p2

b) Additional consumer surplus to initial consumers when the price falls

Graph (a) and Graph (b) each illustrate a $4 tax placed on a market. In comparison to Graph (a), Graph (b) illustrates which of the following statements? a) When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic b) When demand is relatively elastic, the deadweight loss a of tax is larger than when demand is relatively inelastic c) When supply is relatively inelastic, the deadweight loss of a tax is smaller than when supply is relatively elastic d) When supply is relatively elastic, the deadweight loss of a tax is larger than when supply is relatively inelastic

a) When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic

Under rent control, bribery is a potential mechanism to a) bring the total price of an apartment (including the bribe) closer to the equilibrium price b) allocate housing to the poorest individuals in the market c) force the total price of an apartment (including the bribe) to be less than the market d) allocate housing to the most deserving tenants

a) bring the total price of an apartment (including the bribe) closer to the equilibrium price

If the government levies a $800 tax per motorcycle on sellers of motorcycles, then the price paid by buyers or motorcycles would a) increase by less than $800 b) decrease by an indeterminate amount c) increase by more than $800 d) increase by exactly $800

a) increase by less than $800

If the government wanted to tax or subsidize this good to achieve the socially optimal level of output, it would a) introduce a subsidy of $16 per unit b) impose a tax of $8 per unit c) Introduce a subsidy of $8 per unit d) impose a tax of $16 per unit

a) introduce a subsidy of $16 per unit

Cost is a measure of the a) seller's willingness to sell b) seller's producer surplus c) producer shortage d) seller's willingness to pay

a) seller's willingness to sell

Suppose that in a particular market, the supply curve is highly inelastic and the demand curve is highly elastic. If a tax is imposed in this market, then the a) sellers will bear a greater burden of the tax than buyers b) buyers will bear a greater burden of the tax than the sellers c) Buyers and sellers are likely to share the burden of the tax equally d) buyers and sellers will not share the burden equally, but it is impossible to determine who will bear the greater burden of the ax without more information

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

Which of the following is NOT correct? a) taxes levied on sellers and taxes levied on buyers are not equivalent b) tax places a wedge between the price that buyers pay and the price that sellers receive c) the wedge between the buyers' price and sellers' price is the same, regardless of whether the tax is levied on buyers or sellers d) in the new after tax equilibrium, buyers and sellers share the burden of the tax

a) taxes levied on sellers and taxes levied on buyers are not equivalent

with trade and without a tariff, a) the domestic price is equal to the world price b) roses are sold at $4 in this market c) there is a shortage of 400 roses in this market d) this country imports 200 roses

a) the domestic price is equal to the world price

Total surplus without the tax is a) $7.5 and total surplus with the tax is $10 b) $10 and total surplus with the tax is $7.5 c) $6 and total surplus with the tax is $1.5 d) $1.5 and total surplus with the tax is $6

b) $10 and total surplus with the tax is $7.5

The per unit burden of the tax on buyers is a) $1 b) $3 c) $4 d) $6

b) $3

What is the equilibrium quantity of output in this market a) 5 units b) 4 units c) 3 units d) 6 units

b) 4 units

Total surplus in this market before trade is a) A + B b) A + B + C c) A + B + C + D d) B + C + D

b) A + B + C

A legal minimum on the price at which a good can be sold is called a a) price subsidy b) price floor c) tax d) price ceiling

b) price floor

In absence of trade, total surplus in Uganda is represented by the area a) C + B + A b) C + B + A + F + D c) C + B + A +F +D + H d) C + B + A + F + D + H + G

b) C + B + A + F + D

The deadweight loss created by the tariff is represented by the area a) B b) D + F c) D + E + F d) B + D

b) D + F

When a tariff is imposed in the market, domestic producers a) Gain $200 of producer surplus b) Gain $150 of producer surplus c) Gain $50 of producer surplus d) Gain $100 of producer surplus

b) Gain $150 of producer surplus

The Tariff: a) Decreases producer surplus by the area C, decreases consumer surplus by the area C+D+E, and decreases total surplus by the area D+F b) Increases producer surplus by the area C, decreases consumer surplus by the area C+D+E+F, and decreases total surplus by the area D+F c) Creates government revenue represented by the area B+E and decreases total surplus by the area D+E+F d) Increases producer surplus by the area C+G and creates government revenue represented by the area D+E+F

b) Increases producer surplus by the area C, decreases consumer surplus by the area C+D+E+F, and decreases total surplus by the area D+F

Assume, for India, that the domestic price of copper without international trade is lower than the world price of copper. This suggests that, in the production of copper, a) India has a comparative advantage over other countries and india will import copper b) India has a comparative advantage over other countries and India will export copper c) Other countries have a comparative advantage over india and india will import copper d) Other countries have a comparative advantage over india and india will export copper

b) India has a comparative advantage over other countries and India will export copper

If all external costs were internalized, then the market's output would be a) Q1 b) Q2 c) Q3 d) Q4

b) Q2

The social optimal quantity would be a) Q1 b) Q2 c) Q3 d) Q4

b) Q2

The socially optimal quantity would be a) Q1 b) Q2 c) Q3 d) Q4

b) Q2

The overuse of antibiotics leads to the development of antibiotic-resistant diseases. Therefore, a government policy that internalized the externality would move the quantity of antibiotics used from point a) Q2 to point Q3 b) Q3 to point Q2 c) Q4 to point Q5 d) Q5 to point Q4

b) Q3 to point Q2

Which of the following is correct? a) Rent control and the minimum wage are both examples of price ceilings b) Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor c) Rent control is an example of a price floor, and the minimum wage is an example of a price ceiling d) Rent control and the minimum wage are both examples of price floors

b) Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor

Consumer surplus is equal to the following a) Amount paid by buyers - costs of sellers b) Value to buyers - amount paid by buyers c) Value to buyers - costs to sellers d) Value to buyers - willingness to pay of buyers

b) Value to buyers - amount paid by buyers

Zaria and Hannah are roommates. Zaria assigns a $30 value to smoking cigarettes. Hannah values smoke-free air at $15. Which of the following scenarios is a successful example of the Coase theorem? a) Hannah offers Zaria $20 not to smoke. Zaria accepts and does not smoke b) Zaria pays Hannah $16 so that Zaria can smoke c) Zaria pays Hannah $14 so that Zaria can smoke d) Hannah offers Zaria $15 not to smoke. Zaria accepts and does not smoke

b) Zaria pays Hannah $16 so that Zaria can smoke

Which of the following is NOT a characteristic of pollution permits?? a) Prices are set by supply and demand b) allowing firms to trade their permits reduces the total quantity of pollution beyond the initial allocation c) Real world markets for pollution permits include sulfur dioxide and carbon d) Firms for whom pollution reduction is very expensive are willing to pay more for permits than firms for whom pollution reduction is less expensive

b) allowing firms to trade their permits reduces the total quantity of pollution beyond the initial allocation

What is the socially optimal quantity of output in this market? a) 8 units b) between 8 and 12 units c) 12 units d) more than 12 units

b) between 8 and 12 units

In this market, a minimum wage of $6 is a) binding and creates a labor shortage b) binding and creates unemployment c) non-binding and creates a labor shortage d) non-binding and creates neither a labor shortage nor unemployment

b) binding and creates unemployment

Price ceilings and price floors that are binding a) are desirable because they make markets more efficient and more fair b) cause surpluses and shortages to persist because price can't adjust to the market equilibrium market c) can have the effect of restoring a market to equilibrium d) are imposed because they can make the poor in the economy better off without causing adverse effects

b) cause surpluses and shortages to persist because price can't adjust to the market equilibrium market

The deadweight loss from a tax per unit of good will be smallest in a market with a) inelastic supply and elastic demand b) inelastic supply and inelastic demand c) elastic supply and elastic demand d) Elastic supply and inelastic demand

b) inelastic supply and inelastic demand

The social security tax is a tax on a) capital b) labor c) land d) savings

b) labor

When the tariff imposed, domestic consumers a) Lose surplus of $400 b) lose surplus of $450 c) gain surplus of $50 d) gain surplus of $800

b) lose surplus of $450

A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it a) maximizes both the total revenue for firms and the quantity supplied of the product b) maximizes the combined welfare of buyers and sellers c) Minimizes costs and maximizes output d) minimizes the level of welfare payments

b) maximizes the combined welfare of buyers and sellers

Taxes on labor encourage which of the following? a) labor demand to be more inelastic b) mothers to stay at home rather than work in the labor force c) Workers to work overtime d) fathers to take on second jobs

b) mothers to stay at home rather than work in the labor force

If a nonbonding price floor is imposed on a market, then the a) quantity sold in the market will decrease b) quantity sold in the market will stay the same c) price in the market will increase d) price in the market will decrease

b) quantity sold in the market will stay the same

When positive externalities are present in a market a) private benefits will be greater than social benefits b) social benefits will be greater than private benefits c) only government relegation will solve the problem d) the market will not be able to generate an equilibrium

b) social benefits will be greater than private benefits

From the given information, it is apparent that a) the production of gasoline involves a negative externality, so the market will produce a smaller quantity of gasoline than is socially desirable b) the production of gasoline involves a negative externality, so the market will produce a larger quantity of gasoline than is socially desirable c) the production of gasoline involves a positive externality, so the market will produce a smaller quantity of gasoline than is socially desirable d) the production of gasoline involves a positive externality, so the market will produce a larger quantity of gasoline than is socially acceptable

b) the production of gasoline involves a negative externality, so the market will produce a larger quantity of gasoline than is socially desirable

In the market for apartments, rent control causes the quantity supplied a) and quantity demanded to fall b) to fall and quantity demanded to rise c) to rise and quantity demanded to fall d) and quantity demanded to rise

b) to fall and quantity demanded to rise

Which of the following is an example of a positive externality? a) a college student buys a new car when she graduates b) your neighbor plants a nice garden in front of his house c) a person litters in a public park d) your friend pays to get her hair cut and colored at the salon

b) your neighbor plants a nice garden in front of his house

If the price of the good is $14.00, then producer surplus is a) $20.00 b) $19.00 c) $20.50 d) $9.00

c) $20.50

The amount of the tax on each unit of the good is a) $1 b) $3 c) $5 d) $2

c) $5

The social optimal quantity of output is a) 3 units b) 4 units c) 5 units d) 6 units

c) 5 units

Total surplus in this market after trade is a) A + B b) A + B + C c) A + B + C + D d) B + C + D

c) A + B + C + D

Which of the following is NOT an advantage of a multilateral approach to free trade over a unilateral approach? a) A multilateral approach can reduce trade restrictions abroad as well as at home b) A multilateral approach has the potential to result in freer trade c) A multilateral approach requires the agreement of two or more nations d) A multilateral approach may have political advantages

c) A multilateral approach requires the agreement of two or more nations

To fully understand how taxes affect economic well-being, we must a) assume that economic well-being is not affected if all tax revenue is spent on goods and services for the people who are being taxed b) compare the taxes raised in the United States with those raised in France c) Compare the reduced welfare of buyers and sellers to the amount of revenue the government raises d) Remember the taxes reduce the welfare of buyers, increase the welfare of sellers and raise government revenue

c) Compare the reduced welfare of buyers and sellers to the amount of revenue the government raises

Which of the following statements is not correct? a) Tradable pollution permits have an advantage over corrective taxes if the government is uncertain as to the optimal size of the tax necessary to reduce pollution to a specific level b) Both corrective taxes and tradable pollution permits provide market-based incentives for firms to reduce pollution c) Corrective taxes set the maximum quantity of pollution, whereas tradable pollution permits fix the price of pollution d) Both corrective taxes and tradable pollution permits reduce the cost of environmental protection and thus should increase the public's demand for a clean environment

c) Corrective taxes set the maximum quantity of pollution, whereas tradable pollution permits fix the price of pollution

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 a) T/Q b) T + Q c) T x Q d) (T x Q) / Q

c) T x Q

In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that a) OPEC raised the price of crude oil in world markets b) U.S. gasoline producers raised the price of gasoline c) The U.S. government maintained a price ceiling on gasoline d) Americans typically commuted long distances

c) The U.S. government maintained a price ceiling on gasoline

Is a sawmill creates too much noise for local residents, a) noise restrictions will force residents to move out of the area b) sense of social responsibility will cause owners of the miller to reduce noise levels c) The government can raise economic well-being through noise-control regulations d) The government should avoid intervening because the market will always allocate resources efficiently

c) The government can raise economic well-being through noise-control regulations

(vertical distance between points A and B represents a tax in the market) As a result of the tax, a) Consumer surplus decreases from $200 to $80 b) Producer surplus decreases from $200 to $145 c) The market experiences a deadweight loss of $80 d) Total surplus increases from $180 to $200

c) The market experiences a deadweight loss of $80

When a country allows trade and becomes an exporter of silk, which of the following is NOT a consequence? a) The price paid by domestic consumers of silk increases b) The price received by domestic producers of silk increases c) The price paid by domestic consumers of silk decreases d) The gains of domestic producers of silk exceed the losses of domestic consumers of silk

c) The price paid by domestic consumers of silk decreases

Producer surplus directly measures a) the well-being of society as a whole b) The well-being of buyers and sellers c) The well-being of sellers d) Sellers' willingness to sell

c) The well-being of sellers

Which of the following is NOT an advantage of corrective taxes? a) they raise revenues for the government b) They enhance economic efficiency c) They subsidize the production of goods w/positive externalities d) They move the allocation of resources closer to the social optimum

c) They subsidize the production of goods w/positive externalities

A shortage results when a a) non binding price ceiling is imposed on a market b) non binding price ceiling is removed from a market c) binding price ceiling is imposed on a market d) binding price ceiling is removed from a market

c) binding price ceiling is imposed on a market

Government imposed price of $12 in this market is an example of a a) binding price ceiling that creates a shortage b) non-binding price ceiling that creates a shortage c) binding price floor that creates a surplus d) non binding price floor that creates a surplus #8 photo Q6

c) binding price floor that creates a surplus

Suppose a tax of $112 per unit is imposed on this market. Which of the following is correct? a) buyers and sellers will share the burden of the tax equally b) sellers will bear more of the burden of the tax than buyers will c) buyers will bear more of the burden of the tax than sellers will d) there is no tax burden

c) buyers will bear more of the burden of the tax than sellers will

When a country is on the downward sloping side of the Laffer curves, a cut in the tax rate will a) decrease tax revenue and decrease the deadweight loss b) decrease tax revenue and increase the deadweight loss c) increase tax revenue and decrease the deadweight loss d) increase tax revenue and increase the deadweight loss

c) increase tax revenue and decrease the deadweight loss

This market is characterized by a) Government intervention b) Positive externality c) negative externality d) price control

c) negative externality

An externality is the uncompensated impact of a) society's decisions on the well-being of society b) a person's actions on that person's well-being c) one person's actions on the well-being of a bystander d) society's decisions on the poorest person in the society

c) one person's actions on the well-being of a bystander

Which of the following causes the price paid by buyers to be different than the price received by sellers? a) binding price floor b) binding price ceiling c) tax on the good d) non binding price control

c) tax on the good

Under rent control, landlords can cease to be responsive to tenants' concerns about the quality of the housing because a) with rent control, the government guarantees landlords a minimum level of profit b) they become resigned to the fact that many of their apartments are going to be vacant at any given time c) with shortages and waiting lists, they have no incentive to maintain and improve their property d) with rent control, it becomes the government's responsibility to maintain rental housing

c) with shortages and waiting lists, they have no incentive to maintain and improve their property

The size of the tariff on roses is a) $4 b) $3 c) $2 d) $1

d) $1

What is the amount of the tax per unit? a) $1 b) $2 c) $3 d) $4 (Q15-Q6) photo

d) $4

Taking into account private and external benefits, the total surplus to society at the socially efficient quantity is a) $18 b) $38 c) $43.5 d) $62.5

d) $62.5

The distinction between efficiency and equality can be described as follows: a) Efficiency refers to maximizing the number of trades among buyers and sellers; Equality refers to maximizing the gains from trade among buyers and sellers b) Efficiency refers to minimizing the price paid by buyers; Equality refers to maximizing the gains from trade among buyers and sellers c) Efficiency refers to maximizing the size of the pie; equality refers to producing a pie of a given size at the least possible cost d) Efficiency refers to maximizing the size of the pie; equally refers to disturbing the pie fairly among members of society

d) Efficiency refers to maximizing the size of the pie; equally refers to disturbing the pie fairly among members of society

When a tax is imposed on a good, the a) supply curve for the good always shifts b) demand curve for the good always shifts c) Amount of the good that buyers are willing to buy at each price always remains unchanged d) Equilibrium quantity of the good always decreases

d) Equilibrium quantity of the good always decreases

Which of the following is NOT a way of internalizing technology spillovers? a) subsidies b) patent protection c) industrial policy d) taxes

d) Taxes

Employing a lawyer to draft and enforce a private contract between parties wishing to solve an externality problem is an example of a) Opportunity cost b) Implicit cost c) Sunk cost d) Transaction cost

d) Transaction cost

When a tax is placed on the sellers of cell phones, the size of the cell phone market a) and the effective price received by sellers both increase b) increases, but the effective price received by sellers decreases c) decreases, but the effective price received by sellers increases d) and the effective price received by sellers both decrease

d) and the effective price received by sellers both decrease

What is the fundamental basis for trade among nations? a) shortages or surpluses in nations that do not trade b) misguided economic policies c) absolute advantage d) comparative advantage

d) comparative advantage

Suppose the government imposes a tax on cheese. The deadweight loss from this tax will likely be greater in the a) First year after it is imposed than in the 8th year after it is imposed because demand and supply will be more elastic in the first year than in the 8th year b) first year after it is imposed than in the eighth year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year c) eighth year after it is imposed than in the first year after it is imposed because demand and supply will be more elastic in the first year than in the eighth year d) eighth year after it is imposed than in the first year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year

d) eighth year after it is imposed than in the first year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year

Which of the following statements is NOT correct? a) a patent is a way for the government to encourage the production of a good w/technology spillovers b) tax is a way for the government to reduce the production of a good with a negative externality c) tax that accurately reflects external costs produces the socially optimal outcome d) government policies can't improve upon private market outcomes

d) government policies can't improve upon private market outcomes

The goal of rent control is to a) facilitate controlled economic experiments in urban areas b) helps landlords by assuring them a low vacancy rate for their apartments c) help the poor by assuring them an adequate supply of apartments d) help the poor by making housing more affordable

d) help the poor by making housing more affordable

If the size of a tax increases, tax revenue a) increases b) decreases c) remains the same d) may increase, decrease or remain the same

d) may increase, decrease or remain the same

When a tax is levied on a good, the buyers and sellers of the good share the burden, a) provided the tax is levied on the sellers b) provided the tax is levied on the buyers c) provided a portion of the tax is levied on the buyers, with the remaining portion levied on the sellers d) regardless of how the tax is levied

d) regardless of how the tax is levied

When a tax is placed on a product, the price paid by buyers a) rises, and the price received by sellers rises b) falls, and the price received by sellers rises c) falls, and the price received by sellers falls d) rises, and the price received by sellers falls

d) rises, and the price received by sellers falls

If a price ceiling is not binding, then a) there will be a surplus in the market b) there will be a shortage in the market c) the market will be less efficient than it would be without the price ceiling d) there will be no effect on the market price or quantity sold

d) there will be no effect on the market price or quantity sold

The maximum price that a buyer will pay for a good is called a) consumer surplus b) producer surplus c) efficiency d) willingness to pay

d) willingness to pay