Question 1

Other things equal, for a given tax, if the demand curve is more elastic,

Accepted Answer

A) ​the greater the tax revenue raised and the greater the deadweight cost of the tax. 
B) ​the greater the tax revenue raised and the smaller the deadweight cost of the tax. 
C) ​the less the tax revenue raised and the greater the deadweight cost of the tax. 
D) ​the less the tax revenue raised and the smaller the deadweight cost of the tax. 
A) ​the greater the tax revenue raised and the greater the deadweight cost of the tax. 
B) ​the greater the tax revenue raised and the smaller the deadweight cost of the tax. 
C) ​the less the tax revenue raised and the greater the deadweight cost of the tax. 
D) ​the less the tax revenue raised and the smaller the deadweight cost of the tax.

Question 2

A tax in an industry would result in:

Accepted Answer

A) ​a decrease in consumer surplus. 
B) ​a decrease in producer surplus 
C) ​a decrease in the gains from trade. 
D) ​all of the above. 
A) ​a decrease in consumer surplus. 
B) ​a decrease in producer surplus 
C) ​a decrease in the gains from trade. 
D) ​all of the above.

Question 3

​Exhibit 7-7  
-Refer to Exhibit 7-7. When the price is P2, the consumer surplus is equal to area:

Accepted Answer

A) ​A + B + C 
B) ​A 
C) ​A + B 
D) ​C 
A) ​A + B + C 
B) ​A 
C) ​A + B 
D) ​C

Question 4

​Exhibit 7-13  
-Refer to Exhibit 7-13. After the implementation of the deficiency payment program, the total welfare is the area:

Accepted Answer

A) ​a + b + c + d 
B) ​c + d + b + e 
C) ​f 
D) ​a + b + c + d   f 
A) ​a + b + c + d 
B) ​c + d + b + e 
C) ​f 
D) ​a + b + c + d   f

Question 5

Consumer surplus equals the quantity supplied minus the quantity demandeD.​

Accepted Answer

A) True 
 B)False

Question 6

The maximum price a buyer is willing to pay for a good is called:​

Accepted Answer

A) ​cost. 
B) ​willingness to pay. 
C) ​equity. 
D) ​efficiency. 
A) ​cost. 
B) ​willingness to pay. 
C) ​equity. 
D) ​efficiency.

Question 7

Other things being equal, the more elastic demand is:

Accepted Answer

A) ​the lower the deadweight loss is resulting from the imposition of a particular tax on a product. 
B) ​the greater the deadweight loss is resulting from the imposition of a particular tax on a product. 
C) ​the greater the fraction is of the burden of the tax borne by consumers. 
D) ​the greater the tax revenue collected by the government is. 
A) ​the lower the deadweight loss is resulting from the imposition of a particular tax on a product. 
B) ​the greater the deadweight loss is resulting from the imposition of a particular tax on a product. 
C) ​the greater the fraction is of the burden of the tax borne by consumers. 
D) ​the greater the tax revenue collected by the government is.

Question 8

​Exhibit 7-6  
-Refer to Exhibit 7-6. If the market price equals P2, consumer surplus can be identified in the diagram as area:

Accepted Answer

A) ​A + B + E. 
B) ​B + E. 
C) ​A. 
D) ​C + D + F. 
A) ​A + B + E. 
B) ​B + E. 
C) ​A. 
D) ​C + D + F.

Other things equal, for a given tax, if the demand curve is more elastic,

A tax in an industry would result in:

Exhibit 7-7 -Refer to Exhibit 7-7. When the price is P₂, the consumer surplus is equal to area:

Exhibit 7-13 -Refer to Exhibit 7-13. After the implementation of the deficiency payment program, the total welfare is the area:

Consumer surplus equals the quantity supplied minus the quantity demandeD.

The maximum price a buyer is willing to pay for a good is called:

Other things being equal, the more elastic demand is:

Exhibit 7-6 -Refer to Exhibit 7-6. If the market price equals P₂, consumer surplus can be identified in the diagram as area:

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Exam 7: Market Efficiency and Welfare

Other things equal, for a given tax, if the demand curve is more elastic,

A tax in an industry would result in:

​Exhibit 7-7 -Refer to Exhibit 7-7. When the price is P2, the consumer surplus is equal to area:

​Exhibit 7-13 -Refer to Exhibit 7-13. After the implementation of the deficiency payment program, the total welfare is the area:

Consumer surplus equals the quantity supplied minus the quantity demandeD.​

The maximum price a buyer is willing to pay for a good is called:​

Other things being equal, the more elastic demand is:

​Exhibit 7-6 -Refer to Exhibit 7-6. If the market price equals P2, consumer surplus can be identified in the diagram as area:

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Exhibit 7-7 -Refer to Exhibit 7-7. When the price is P₂, the consumer surplus is equal to area:

Exhibit 7-13 -Refer to Exhibit 7-13. After the implementation of the deficiency payment program, the total welfare is the area:

Consumer surplus equals the quantity supplied minus the quantity demandeD.

The maximum price a buyer is willing to pay for a good is called:

Exhibit 7-6 -Refer to Exhibit 7-6. If the market price equals P₂, consumer surplus can be identified in the diagram as area: