Microeconomics Chapter 4 Homework

"Rent controls, government farm programs, and other price ceilings and price floors are bad." This is an example of a A. normative statement. The statement is concerned with what is. B. positive statement. The statement is concerned with what is. C. positive statement. The statement is concerned with what should be. D. normative statement. The statement is concerned with what should be.

D. normative statement. The statement is concerned with what should be.

A black market is A. a market in which buying and selling take place at prices that violate government price regulations. B. a market in which buying and selling take place at prices consistent with government price regulations. C.very similar to a​ "gray" market except that the goods and services exchanged are imported. D. a market in which all transactions involve activities​ (such illicit​ drugs, prostitution,​ etc.) many in the population find morally offensive.

A. a market in which buying and selling take place at prices that violate government price regulations.

Economic surplus in a market is the sum of​ _____ surplus and​ _____ surplus. In a competitive​ market, with many buyers and sellers and no government​ restrictions, economic surplus is at a​ _____ when the market is in​ _____. A. ​consumer; producer;​ maximum; equilibrium B. ​consumer; producer;​ minimum; equilibrium C. consumer; government;​ maximum; equilibrium D. consumer; producer;​ maximum; disequilibrium

A. ​consumer; producer;​ maximum; equilibrium

Economic efficiency is A. a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumer surplus and producer surplus is not at a maximum. B. a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumer surplus and producer surplus is at a maximum. C. a market outcome in which the marginal benefit to consumers of the last unit produced is greater than its marginal cost of production and in which the sum of consumer surplus and producer surplus is at a maximum. D. a government outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumer surplus and producer surplus is at a maximum.

B. a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumer surplus and producer surplus is at a maximum.

Do the people who are legally required to pay a tax always bear the burden of the​ tax? Briefly explain. A. Yes. Those who are legally required to send a tax payment to the government bear the burden of the tax. B. No. Consumers always bear the burden of the tax. C. No. Whoever bears the burden of the tax is not affected by who legally is required to pay the tax to the government. D. No. Those who are legally required to send a tax payment to the government never bear the burden of the tax. E. No. Producers always bear the burden of the tax.

C. No. Whoever bears the burden of the tax is not affected by who legally is required to pay the tax to the government.

When the government imposes price floors or price​ ceilings, A. everyone​ wins, goods and services distribution is more​ just, and there is a loss of economic efficiency. B. some people​ win, some people​ lose, and there is an increase in economic efficiency. C. some people​ win, some people​ lose, and there is a loss of economic efficiency. D. everyone​ wins, goods and services distribution is more​ just, and there is an increase in economic efficiency.

C. some people​ win, some people​ lose, and there is a loss of economic efficiency.

Tax incidence indicates A. who is legally required to send a tax payment to the government. B. the burden of a tax on producers. C. the actual division of the burden of a tax. D. the burden of a tax on consumers. E. who is not legally required to send a tax payment to the government.

C. the actual division of the burden of a tax.

A price ceiling is a legally determined ______________ price that sellers may charge. A price floor is a legally determined ______________ price that sellers may receive.

maximum, minimum

Consumer and producer surplus measure the​ _____ benefit rather than the​ _____ benefit.

net, total