Thomas Edison State ECO 112 Quiz 2

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Question 1 Producer surplus is the area

Question 2 Taxes cause deadweight losses because they

Question 3 Within a country, the domestic price of a product will equal the world price if

Question 4 When a beekeeper places his hives of bees in an orchard so that the bees can gather nectar to produce honey, the bees pollinate the orchard, which increases the yield of fruit. This benefits

Question 5 Private solutions may not be possible due to the costs of negotiating and enforcing these solutions. Such costs are called

Question 6 Total surplus in a market is equal to

Question 7 One result of a tax, regardless of whether the tax is placed on the buyers or the sellers, is that the

Question 8 The demand for milk is more elastic than the demand for water. Suppose the government levies an equivalent tax on milk and water. The deadweight loss would be larger in the market for

Question 9 The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become

Question 10 The U.S. government protects fish, a common resource, by

Question 11 With a lump-sum tax,

Question 12 A tariff is a tax placed on

Question 13 Suppose that everyone prefers to live in a society without poverty. Further suppose that some private charities are successful in reducing poverty. People who do not contribute to the charities

Question 14 The government's health plan for the elderly is called

Question 15 It does not matter whether a tax is levied on the buyers or the sellers of a good because

Question 16 In order to determine tax incidence, one must

Question 17 In the absence of externalities the "invisible hand" leads a market to maximize

Question 18 Other things equal, if the price of a good falls, the consumer surplus

Question 19 Which of the following illustrates the concept of a negative externality?

Question 20 If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,

Question 21 A transfer payment is a government payment

Question 22 Dog owners do not bear the full cost of the noise their barking dogs create and, therefore, tend to take too few precautions to prevent their dogs from barking. Local governments address this problem by

Question 23 Goods that are both excludable and rival in consumption would be considered

Question 24 When negative externalities are present in a market

Question 25 Which of the following would NOT be true concerning a seller's cost?

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