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WorksheetsPrice Controls and Taxes
Total questions: 16
Worksheet time: 8mins
Government interventions will result in welfare loss. Another term for welfare loss is (a) .
If a maximum price is not effective,
the equilibrium price is above the ceiling.
the equilibrium price is below the ceiling.
it has no legal enforcement mechanism.
people must voluntarily agree to abide by it.
An effective maximum price causes
a shortage, which cannot be eliminated automatically through market adjustment.
a surplus, which cannot be eliminated automatically through market adjustment.
a shortage, which is temporary, since market adjustment will cause price to rise.
a surplus, which is temporary, since market adjustment will cause price to rise.
Which of the following is the most likely explanation for the imposition of a minimum price in the market for corn?
Sellers of corn, recognizing that the price floor is good for them, have pressured policy makers into enacting the price floor.
Buyers of corn, recognizing that the price floor is good for them, have pressured policy makers into enacting the price floor.
Buyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policy makers into enacting the price floor.
Policy makers have studied the effects of the price floor carefully and recognize that the price floor is advantageous for society as a whole.
A price floor keeps the price of a good from falling too low.
True
False
If a price floor is set (a) the equilibrium price, the price floor will have no effect on the market.
In order for a minimum price to be effective, it must be set _____________ the equilibrium price, while a maximum price must be set _____________ the equilibrium price in order to be effective.
above; below
above; above
below; above
below; below
If a price ceiling was placed at 320, where would price end up?
280
300
320
340
If a price floor was set at 320, what quantity would be purchased?
20
40
60
80
An effective maximum price will benefit
all consumers.
some consumers at the expense of other consumers.
all producers.
some producers at the expense of other producers.
Which of the followings is not one of the criterias for a good tax defined by Adam Smith?
equitable
transparent
convenient
scarce
A tax system indicates in which income below $5,000 is not taxed, income from $5,001 to $10,000 will be taxed $10% and income above $10,000 will taxed 20%. If someone earns an income of $8,000, his/her marginal rate of tax will be (a) %.
A tax system indicates in which first $5,000 income is taxed 10%, next $5,000 will be taxed $15% and up to $10000. Any amount earned over t $10,000 will taxed 20%. If someone earns an income of $10,005, his/her average rate of tax will be (a) %. (1 decimal place)
Which one of the following statements is incorrect?
Proportional taxes indicate as income rises, the proportion of income paid in tax remains the same.
Progressive taxes indicate as income rises, the proportion of income paid in tax increases.
Regressive taxes indicate as income rises, the proportion of income paid in tax falls.
For progressive taxes, marginal rate of tax is lower than average rate of tax.
A removal of indirect taxes will lead to
a fall in equilibrium price and a rise in equilibrium quantity.
a fall in equilibrium price and a fall in equilibrium quantity.
a rise in equilibrium price and a rise in equilibrium quantity.
a rise in equilibrium price and a fall in equilibrium quantity.
What is the name of your Economics lecturer?
Loh Wan Qing
Lo Wan Qing
Loe Wan Qing
Loh Wan Qin
