A situation in which the price charged is equal to society's opportunity cost is known as
A. market failure.
B. marginal profits.
C. marginal monopoly pricing.
D. marginal cost pricing.
Answer: D
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The imposition of a tax on a good enables the government to
A) raise the price received by sellers of the goods that have been taxed. B) lower the price paid by buyers for the goods that have been taxed. C) create a more efficient economic system. D) take part of consumer and producer surplus as tax revenue when the good is purchased. E) decrease the deadweight loss in this market.
When a per-unit tax is levied on a goods market in which supply is not perfectly inelastic but such a tax nevertheless does not give rise to any deadweight loss, consumers are made no worse off by the imposition of the tax.
Answer the following statement true (T) or false (F)
Economic models do not reflect the full complexity of reality, but instead are based on:
A. Simplifications B. Tradeoffs C. Value judgments D. Predictions
The total consumer surplus for good X can be calculated in all except one of the following ways. Which is the exception?
A) the sum, for all buyers of X, of the difference between what each buyer is willing to pay for X and the amount actually paid B) the area bounded by the demand curve for X and the two axes C) the sum of the individual consumer surpluses for all buyers of X D) the area below the demand curve for X and above the price of X