7. Methods of government intervention in markets

What is GST?

• gold and silver trading

• geocaching and survival training

• goods and services tax

• growth and spending tracking

Imposition of an indirect tax might result in:

• a decrease in price of the product

• an increase in unemployment on that market

• a loss of tax revenue for the government

• the amount of products sold remaining unchanged

When is the tax burden higher for consumers than for producers?

• PED = PES

• PED > PES

• YED > PES

• PED < PES

What is the opportunity cost of subsidies?

• the money used to finance the subsidies could be used in a different way

• the cost of increasing the educational opportunities for kids

• the risk of producers misusing the money they received from subsidies

• inability of producers from developing countries to compete with subsidized domestic producers

• subsidization doesn't motivate firms to become more efficient

What is the definition of a subsidy?

• a sum of money or percentage of price the government gives to the domestic supplier

• 1. an amount of money paid by the government to the producer per unit of output

• 1. an amount of money paid by the producer to the government per unit of output

• 1. a situation where the government sets the maximum price preventing the producers to rising it above this "ceiling"

What effect will setting a maximum price set above the equilibrium level have in the market of rented accomodation?

• Rents will remain unchanged

• Rents will increase

• Rents will decrease

Which intervention has the risk of causing a shortage?

• Subsidies paid to some producers

• Specific indirect taxes

• Maximum price controls

• Taxes on companies' profits

When a minimum wage is set above the equilibrium level...

• unemployment increases

• unemployment decreases

• search activity increases

• search activity decreases

A maximum price is set ... the equilibrium level.

How can the government maintain a maximum price?

• Indirect taxes

• Subsidies

• Direct provision

• Release of the stocks

• Protectionism measures