Question 1
A binding maximum price causes:
A.
No change B.
Higher producer surplus only C.
Excess supply D.
Excess demand
Question 2
Subsidies are used to:
A.
Eliminate taxes B.
Stop trade C.
Encourage consumption/production D.
Reduce all output
Question 3
What is meant by subsidy?
A.
Percentage of price per unit. B.
Fixed monetary amount per unit. C.
Legal price floor above equilibrium. D.
Financial gift to firms not repaid.
Question 4
What is meant by specific tax?
A.
Fixed monetary amount per unit. B.
Tradable rights to pollute to a set level. C.
Legal price ceiling below equilibrium. D.
Helps consumers make informed choices.
Question 5
What is meant by ad valorem tax?
A.
Government supplies goods such as public goods. B.
Legal price floor above equilibrium. C.
Percentage of price per unit. D.
Financial gift to firms not repaid.
Question 6
What is meant by regulation?
A.
Fixed monetary amount per unit. B.
Laws firms and consumers must follow. C.
Legal price floor above equilibrium. D.
Percentage of price per unit.
Question 7
What is meant by externality?
A.
Government supplies goods such as public goods. B.
Third-party effect justifying intervention. C.
Laws firms and consumers must follow. D.
Percentage of price per unit.
Question 8
What is meant by maximum price?
A.
Financial gift to firms not repaid. B.
Legal price ceiling below equilibrium. C.
Helps consumers make informed choices. D.
Laws firms and consumers must follow.
Question 9
What is meant by provision of information?
A.
Third-party effect justifying intervention. B.
Government supplies goods such as public goods. C.
Helps consumers make informed choices. D.
Legal price floor above equilibrium.
Question 10
What is meant by state provision?
A.
Government supplies goods such as public goods. B.
Percentage of price per unit. C.
Laws firms and consumers must follow. D.
Helps consumers make informed choices.
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