If a nation that imports a good imposes a tariff, it will increase

a. the domestic quantity demanded.

b. the domestic quantity supplied.

c. the quantity imported from abroad.

d. the efficiency of the equilibrium.

Peanut butter has an upward-sloping supply curve and a downward-sloping demand curve. If a 10 cent per pound tax is increased to 15 cents, the government’s tax revenue a. increases by less than 50 percent and may even decline. b. increases by exactly 50 percent. c. increases by more than 50 percent. d. The answer depends on whether supply or demand is more elastic.

The country Autarka does not allow international trade. In Autarka, you can buy a wool suit for $3$ ounces of gold. Meanwhile, in neighboring countries, you can buy the same suit for $2$ ounces of gold. This suggests that

a. Autarka has a comparative advantage in producing suits and would become a suit exporter if it opened up trade.

b. Autarka has a comparative advantage in producing suits and would become a suit importer if it opened up trade.

c. Autarka does not have a comparative advantage in producing suits and would become a suit exporter if it opened up trade.

d. Autarka does not have a comparative advantage in producing suits and would become a suit importer if it opened up trade .

In the economy of Agricola, tenant farmers rent the land they use from landowners. If the supply of land is perfectly inelastic, then a tax on land would have$\underline{\phantom{\text{justtextsetekst}}}$ deadweight losses, and the burden of the tax would fall entirely on the$\underline{\phantom{\text{justtextsetekst}}}$.

a. sizable; farmers

b. sizable; landowners

c. no; farmers

d. no; landowners

The Laffer curve illustrates that, in some circumstances, the government can reduce a tax on a good and increase the

a. deadweight loss.

b. government's tax revenue.

c. equilibrium quantity.

d. price paid by consumers.

Sophie pays Sky $\$ 50$ to mow her lawn every week. When the government levies a mowing tax of $\$ 10$ on Sky, he raises his price to $\$ 60$. Sophie continues to hire him at the higher price. What is the change in producer surplus, change in consumer surplus, and deadweight loss?

a. $\$ 0, \$ 0, \$ 10$

b. $\$ 0,-\$ 10, \$ 0$

c. $+\$ 10,-\$ 10, \$ 10$

d. $+\$ 10,-\$ 10, \$ 0$

Complete the statement: A tax on a good has a deadweight loss if __________.

Producing a quantity larger than the equilibrium of supply and demand is inefficient because the marginal buyer's willingness to pay is

a. negative.

b. zero.

c. positive but less than the marginal seller's cost.

d. positive and greater than the marginal seller's cost.

An efficient allocation of resources maximizes a. consumer surplus. b. producer surplus. c. consumer surplus plus producer surplus. d. consumer surplus minus producer surplus.

Diego, Emi, and Finn are available to work as tutors for the semester. The opportunity cost of tutoring is $\$ 100$ for Diego, $\$ 200$ for Emi, and $\$ 400$ for Finn. The university is hiring tutors at a price of $\$ 300$. Producer surplus equals

a. $\$ 100$.

b. $\$ 200$.

c. $\$ 300$.

d. $\$ 400$.

Alexis, Bruno, and Camila each want an ice-cream cone. Alexis is willing to pay $\$ 12$, Bruno is willing to pay $\$ 8$, and Camila is willing to pay $\$ 4$. The market price is $\$ 6$. Consumer surplus equals

a. $\$ 6$.

b. $\$ 8$.

c. $\$ 14$.

d. $\$ 18$.

Which of the following increases quantity supplied, decreases quantity demanded, and increases the price that consumers pay?

a. the passage of a tax on a good

b. the repeal of a tax on a good

c. the imposition of a binding price floor

d. the removal of a binding price floor

A $1 per unit tax levied on consumers of a good is equivalent to a. a$1 per unit tax levied on producers of the good. b. a $1 per unit subsidy paid to producers of the good. c. a price floor that raises the good’s price by$1 per unit. d. a price ceiling that raises the good’s price by $1 per unit.

Rent control causes larger shortages in the$\underline{\phantom{\text{justtextsetekst}}}$ run because over that time horizon, supply and demand are$\underline{\phantom{\text{justtextsetekst}}}$ elastic.

a. long; more

b. long; less

c. short; more

d. short; less