Microeconomics: Test II

Pigovian taxes are not always effective because:

According to the graph shown, if the market goes from equilibrium to having its price set at $10:

The graph shown portrays a subsidy to buyers. With the subsidy, sellers sell _______ units, and the post-subsidy price received for each one is _______.

Most goods are:

The graph shown demonstrates a tax on sellers. After the tax has been imposed, the sellers produce _______ units, and the post-tax price received for each one sold is _______.

External costs:

f a price ceiling is set at $8 in the market in the graph shown:

The concept of surplus can show:

The free-rider problem exists when a good is

When the free rider problem is present in a market, the good:

Latoya and Maggie are roommates. Maggie likes to play music in their dorm room every evening. Tonight, Latoya needs to study for her economics exam and would prefer that Maggie not play music. Latoya values silence at $50. Maggie values her music at $20. Assume the roommates can bargain with zero transactions costs. If the dorm rules are such that Maggie is allowed to play music whenever she likes, which of the following is true?

Because a price ceiling causes:

Social disapproval carries a higher cost when you:

Total surplus can be increased by:

A lump-sum tax:

In general, the _______ complicated and _______ efficient the design of a tax system is, the more equitable its incidence

If the punishment associated with breaking a government ban is not severe enough, it may:

A tax that is levied in such a way that low-income taxpayers pay a greater proportion of their income than high-income taxpayers is called a:

FICA, the tax that supports U.S. Medicare and Social Security programs, is generally:

Suppose Bob earns $20,000 per year and pays $2,000 in taxes, while Cindy earns $40,000 per year and pays $4,000 in taxes. In this scenario, Bob's tax rate is _______ and Cindy's tax rate is _______.

We say a market is "missing" when:

If a Pigovian tax is levied on producers, the supply curve will shift straight _______ and the equilibrium quantity will _______.

The graph shown demonstrates a tax on buyers. Before the tax was imposed, buyers purchased _______ units and paid _______ for each one.

Instead of trying to balance the budget every year, it is easier for a government to:

If the intended aim of the price floor set at $23, as shown in the graph, was a net increase in the well-being of producers, then positive analysis would have us consider whether:

Fish in the ocean would be considered:

Local governments, rather than private citizens, are typically the providers of large fireworks displays. This is because fireworks displays:

I. suffer from the free rider problem.
II. are non-excludable.
III. are rival in consumption.

A market failure is most likely to occur when:

Tradable allowances and taxes both:

A tax imposed on a good can:

Assume the market depicted in the graph is in equilibrium at demand (D) and supply (S1). If the supply curve shifts to S2, and a new equilibrium is reached, which of the following is true?

The graph shown displays a market with an externality.

This is a _______ externality, and the optimal quantity is _______ units.

When a perfectly competitive, well-functioning market is in equilibrium:

If price is set at $11 in the market shown in the graph, consumer surplus will consist of areas:

Which action could cause the price ceiling shown in the graph to become non-binding?

The federal debt is _______ and the federal deficit is _______.

Assume the market depicted in the graph is in equilibrium. If the market price is set to $7, which of the following statements is true?

Which of the following is not a public good that the government can make excludable?

The free rider problem arises when a good is _______ and the tragedy of the commons arises when a good is ________________.

Taxes are generally classified into three categories:

When a positive externality is present in a market, the imposition of a government subsidy will:

Assume there are three bakeries, each willing to sell one dozen cupcakes in a given time period. The Sweet Treat can offer a dozen cupcakes for a minimum of $6. The Cake Corner can offer a dozen cupcakes for a minimum of $9. Pastry Place can offer a dozen cupcakes for a minimum of $13.

If the market price of one dozen cupcakes increased from $8 to $12

A tax on which of the following goods is specifically designed to reduce consumption of that good?

According to the graph shown, if the market goes from equilibrium to having its price set at $10 consumer surplus will:

When fishing at a pond, catching and keeping one fish means that this fish is no longer available for another person to catch. This is an example of:

When a subsidy is imposed on a market with a positive externality, efficiency:

When a positive externality exists in a market, the distribution of surplus received from a subsidy depends on:

Tradable allowances and quotas both:

Why might a government impose a minimum wage?