Welfare Economics

According to the Laffer Curve, the y axis would represent

• Consumer Surplus
• Social Welfare
• Government Revenue
• Tax Rate

The Laffer Curve illustrates

• Continuous growth of deadweight loss
• The taxation revenue earned from the rate of a tax.
• The amount of total producer surplus
• The amount of total consumer surplus

The shaded area of the graph represents

• Consumer surplus
• Loss of consumer surplus
• Loss of producer surplus
• Deadweight loss

Which area represents total government revenue?

• A and F
• C and E
• B and D
• A+B+D+F

Which area represents total social welfare?

• A and F
• C and E
• B and D
• A+B+D+F

Which area represents consumer surplus after the tax?

• Area A only
• Area D only
• B and D
• Area A +B + C

According to this chart, it would most likely demonstrate

• The rising opportunity cost as one good is switched from production to another.
• The Laffer curve's tax revenue received as taxes are increased.
• The total deadweight loss as taxes are increased.
• The total producer surplus of a good with perfectly inelastic demand as prices increase.

If demand increases in this example, who would have the greatest increase in welfare?

• Consumer Surplus
• Producer Surplus
• The Same gain

Who has the greatest welfare in this example?

• Consumer Surplus
• Producer Surplus
• The Same gain

Which factor has the lowest effect on dead weight loss?

• inelastic demand
• elastic supply
• elastic demand
• perfect competition