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Economics Study Set 8

Business

Quiz 7 :

Taxation and Government Intervention

Quiz 7 :

Taxation and Government Intervention

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Unlike excise taxes, price ceilings create no deadweight loss.
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True False
Answer:

Answer:

False

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Total producer surplus is measured as the area:
Free
Multiple Choice
Answer:

Answer:

D

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If the demand for Insulin is highly inelastic, the burden of a tax on Insulin will be borne almost entirely by sellers.
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True False
Answer:

Answer:

False

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Refer to the graph shown. In equilibrium, consumer surplus is equal to: img
Multiple Choice
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Refer to the graph shown. In equilibrium, total surplus is equal to: img
Multiple Choice
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If a tax is legally required to be paid by sellers, sellers typically bear the full burden of the tax.
True False
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Refer to the graph shown. In equilibrium, producer surplus is equal to: img
Multiple Choice
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The distance between the supply curve and the price the producer receives for a product for a given quantity supplied is referred to as:
Multiple Choice
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The total cost of taxation to consumers and producers generally exceeds the amount of tax revenue collected by government.
True False
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If the government's goal is to alter people's behavior through taxation, taxing goods with relatively elastic demand and supply would be most effective.
True False
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When the market is in equilibrium, total surplus is maximized.
True False
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Total consumer surplus is measured as the area:
Multiple Choice
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The military draft can be seen as an implicit tax on potential recruits and a subsidy to those who demand defense services.
True False
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An excise tax on alcohol causes the supply of alcohol to decrease and the price of alcohol to decrease.
True False
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A price ceiling is, in essence, an implicit tax on producers and an implicit subsidy to consumers.
True False
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The distance between the demand curve and the price the consumer has to pay for a product (given quantity demanded)is referred to as:
Multiple Choice
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Price ceilings create shortages, but taxes do not.
True False
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The more inelastic the demand for agricultural output, the stronger the incentive for farmers to engage in rent-seeking activities.
True False
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Refer to the graph shown. The market represented here is in equilibrium when the price is: img
Multiple Choice
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If the minimum that the Smith family would be willing to sell their house for is $185,000, but they in fact sell it for $210,000, they will receive:
Multiple Choice
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