Past Quiz Questions - ECON

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,
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Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,
a smaller quantity of the good is bought and sold.
If the government removes a binding price floor from a market, then the price paid by buyers will
decrease, and the quantity sold in the market will increase
If the government removes a binding price floor from a market, then the price received by sellers will
decrease, and the quantity sold in the market will increase.
If the government levies a $1,000 tax per boat on sellers of boats, then the price paid by buyers of boats would
increase by less than $1,000.
The price paid by buyers in a market will decrease if the government
decreases a tax on the good sold in that market.
The price received by sellers in a market will increase if the government decreases a
tax on the good sold in that market.
The deadweight loss from a tax of $5 per unit will be smallest in a market with
inelastic supply and inelastic demand.
The deadweight loss from a $3 tax will be largest in a market with
elastic supply and elastic demand.
The Laffer curve relates
the tax rate to tax revenue raised by the tax.
The difference between social cost and private cost is a measure of the
cost of an externality.
When a market is characterized by an externality, the governmentcan correct the market failure in the case of both positive and negative externalities by inducing market participants to internalize the externality.Corrective taxes differ from most taxes in that corrective taxesenhance economic efficiency.Suppose that flower gardens create a positive externality equal to $1 per plant. What is the relationship between the equilibrium quantity and the socially optimal quantity of plants grown?The equilibrium quantity is less than the socially optimal quantity.Suppose that electricity producers create a negative externality equal to $5 per unit. Further suppose that the government gives a $5 per-unit subsidy to producers. What is the relationship between the equilibrium quantity and the socially optimal quantity of electricity to be produced?The equilibrium quantity is greater than the socially optimal quantity.When an externality is present, the market equilibrium isinefficient, and the equilibrium does not maximize the total benefit to society as a whole.All remedies for externalities share the goal ofmoving the allocation of resources toward the socially optimal equilibrium.A negative externality will cause a private market to producemore than is socially desirable.A positive externality will cause a market to produceless than is socially desirable