ECON CHAP 4-8 REVIEW

Compared to producers, consumers will lose the lesser amount of surplus from a tax if?

• Demand is more elastic than supply

• Supply & Demand are equally elastic

• Demand is perfectly inelastic

• Demand is less elastic than supply

• Supply is perfectly elastic

The elasticities of supply & demand are important in determining the distribution of tax burden because they

• measure how much consumers are willing to pay or how much firms must receive in order to produce

• reflect who actually pays the tax product

• measure how responsive producers and consumers are to a change in price

• reflect how much tax revenue is collected from the tax

• determine who is legally responsible for remitting funds to the government

All taxes create some DWL, unless

• tax is paid by sellers, not manufactureers/sellers

• tax is divided equally between consumers & producers

• tax has been approved by all consumers in a vote

• either suppply or demand is perfectly inelastic

• the goods are imported from another country

WHICH OF THE FOLLOWING IS AN EXAMPLE OF PRODUCER SURPLUS?

• the difference between what a government expects in revenue from an
  excise tax and what it actually receives if the tax decreases the sales of the
  good to zero

• the difference between the economic costs of production and the market
  price

• the markup on the sale of ice cream by sellers at the beach compared to
  local grocery stores

• the loss from the imposition of taxes on sellers

A tax on gas-powered leaf blowers would cause producers to suffer because

• consumer surplus would increase

• the number of leaf blowers sold would decrease

• revenues for leaf blowers manufacturers would decrease

• the price of leaf blowers would increase and fewer would be purchased

• the government would collect revenue from the tax

Do all buyers benefit from a binding price ceiling

• Yes. A binding price ceiling benefits all buyers because it allows them to
  obtain as much of the good desired in the legal market at a lower price

• No. A binding price ceiling benefits no buyers because sellers are unwilling
  to sell any of their products

• No. A binding price ceiling benefits only some buyers because not all are
  able to obtain the good in the legal market at the government-set price

• No. A binding price ceiling benefits only some buyers because, although
  the price is initially lower, the price in the legal market eventually increases
  to its equilibrium price

• No. A binding price ceiling benefits no buyers because they are unwilling to
  buy any of the products at a price higher than the equilibrium price

If a store sells a good at the market price, even though the government
authorities have set the maximum price that can be charged for it, the store is
selling the good in a(n)

• legal market for a market price that is higher than the government-set price

• legal market for a market price that is lower than the government-set price

• illegal market for a market price that is higher

• illegal market for a market price that is lower

• effort to eliminate a surplus of the good

Which of the following would be true in a city with rent-controlled apartments

• Homelessness is reduced

• Apartments are of higher quality

• Landlords face a greater incentive to provide housing

• It is more difficult for the landlord to find a tenant willing to rent the
  apartment

• Rents for those fortunate enough to find an apartment are lower than rents
  in nearby cities that lack rent controls

Ray shares a house with three of his friends. He is a jazz drummer and often
practices at home. One roommate enjoys listening to him practice, but the other
does not. For the roommate who does not enjoy listening to Ray play, this is an
example of ________; for the other roommates, it is an example of ________.

• a negative externality; the tragedy of the commons

• a positive externality; the free-rider problem

• the free-rider problem; the tragedy of the commons

• a negative externality; a positive externality

• the third-party problem; the tragedy of the commons

Which is an example of an excludable good

• driving on the interstate highway

• a fireworks display

• playing baseball in a public park

• attending a community college

• swimming in the ocean