The black market results in:
a) an increase in the quantity exchanged compared to having just a regulated market.
b) higher prices than in a regulated market.
c) all of these.
d) more violence & defective products than a regulated market but less violence & defective products than a free market.
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An effective price ceiling will
a) create a surplus.
b) do all of these.
c) increase search activity.
d) increase the quantity exchanged.
A price floor is unfair because it
a)redistributes the remaining total surplus between consumers and producers.
b) creates deadweight loss.
c) does not do enough to raise the price.
d) blocks voluntary exchange.
A production quota is ______ because for the last unit produced ______.
a)inefficient; marginal benefit exceeds marginal cost
b)efficient; marginal benefit equals marginal cost
c) efficient; the price received by the farmers maximizes their profit
d) inefficient; marginal benefit is less than marginal cost
If the seller has the statutory burden, then
a)the after-tax price to the buyer (PB) equals the original price plus the tax.
b) the after-tax price to the seller (PS) equals the original price minus the tax.
c) the demand curve is shifted to show the imposition of the tax.
d) the supply curve is shifted to show the imposition of the tax.
If the supply curve is more elastic than the demand curve, then
a) the actual burden will be higher for the buyer than for the seller.
b)the statutory burden will be higher for the seller than for the buyer.
c)the actual burden will be higher for the seller than for the buyer.
d)the statutory burden will be higher for the buyer than for the seller.
A tax on a good _________________ the price that sellers effectively receive, _________________ the price that buyers effectively pay, and _________________ the quantity exchanged.
a) lowers; lowers; raises
b) raises; lowers; raises
c) raises; raises; lowers
d) lowers; raises; lowers
The greater the elasticity of supply, the ______ is the decrease in the equilibrium quantity, the ______ is the tax revenue, and the ______ is the deadweight loss.
a)greater; smaller; greater
b)smaller; greater; smaller
c) smaller; smaller; greater
d) greater; greater; smaller
A subsidy is inefficient because it causes units with a ______ to be produced and ______ deadweight loss.
:a) marginal cost greater than marginal benefit; creates
b) marginal cost less than marginal benefit; creates
c) marginal cost greater than marginal benefit; eliminates
d) marginal cost less than marginal benefit; eliminates
