What happens to the total surplus in a market when the government imposes a tax?
a. Total surplus increases by the amount of the tax.
b. Total surplus increases but by less than the amount of the tax.
c. Total surplus decreases.
d. Total surplus is unaffected by the tax.
c
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The above figure shows the demand and supply curves for housing. What would be the effects of a rent ceiling equal to $500 per month?
A) a surplus equal to 3,000 apartments B) a shortage equal to 3,000 apartments C) a shortage equal to 250 apartments D) nothing because the rent ceiling has no effect on the equilibrium price and quantity
The market basket cost $300 in 2015, while it cost $250 in the base year. Therefore, the price index for 2015 is
A) 83. B) 120. C) 80. D) cannot be calculated because the inflation rate is not given.
The measure of the relationship between a change in income and the consequent relative change in quantity demanded at a given price is the: a. cross elasticity of supply
b. elasticity of supply. c. cross elasticity of demand. d. income elasticity of demand.
As Bubba's Bubble Gum Company adds workers while using the same amount of machinery, some workers may be underutilized because they have little work to do while waiting in line to use the machinery. When this occurs, Bubba's Bubble Gum Company encounters
a. economies of scale. b. diseconomies of scale. c. increasing marginal product. d. diminishing marginal product.