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WorksheetsGovernment Intervention
Total questions: 10
Worksheet time: 18mins
Which graph represents an ad valorem tax?
If demand is relatively elastic, which economic pillar faces the highest burden?
Consumers
Governments
Financial Institutions
Producers
What does price ceiling create?
Excess Demand
Consumer Surplus
Excess Supply
Producer Surplus
What is government intervention?
taxes and subsidies
is any action carried out by the government or public entity that affects the market economy
when employees of the government decide to take action after contemplation whilst creating economic models to predict market economy
a consequence of an industrial or commercial activity which affects other parties in turn being reflected in market prices
Corporate tax is an indirect tax
True
False
It does not exist; it's a subsidy
How do subsidies create a net loss of total welfare?
A negative externality is created
It creates a burden on the government
The total cost to tax payers exceeds the total increase in social surplus
It creates a burden on the consumers
On what type of goods should a price ceiling be imposed?
Normal
Inferior
Luxury
Necessity
What area represents government spending on subsidy?
B+C+E+F
A+B+D+G+F
B+F+D
A+G+B+F
Which two of the following represent explanations of the rise in government spending which are based on ‘macroeconomic analysis’?
‘Displacement Theory’ which suggests that public spending is ratcheted upwards over time by social upheavals – as in the case of economic depressions or wars
The state providing ‘public goods’ and ‘merit goods’ free at the point of use, which private markets are unable to do
Rise in a country’s real National Income, when public services are ‘normal’ products with high income elasticities of demand
Change in the composition of the various public sector ‘markets’ leading to greater public spending (e.g. ageing population incurring greater expenditure on healthcare)
Increased privatisation reducing the role of the public sector
Should the rich be taxed in extremity relative to the so-called poor?
Yes
No
I don't care
kg / purple^2
