a binding price floor is imposed on a market. which of the following statements is true?\na) a shortage of…

a binding price floor is imposed on a market. which of the following statements is true?\na) a shortage of the good will be created.\nb) the quantity demanded will be greater than the quantity supplied.\nc) a surplus of the good will be created.\nd) the market will remain in equilibrium but at a higher price.\n\nthe term \deadweight loss\ from a tax refers to the:\na) total amount of tax money the government collects.\nb) the loss of economic benefits from trades that dont happen because of the tax.\nc) the portion of the tax that is paid for by the producers.\nd) the cost of hiring government workers to collect the tax.\n\na firm is selling a product at a price where demand is inelastic. what will happen if the firm raises the price?\na) total revenue will decrease because the quantity sold will fall a lot.\nb) total revenue will increase because the quantity sold will fall by a smaller percentage than the price increases.\nc) total revenue will stay the same because the price and quantity changes cancel out.\nd) the demand will immediately become elastic.\n\nthe government removes a tariff (a tax on an imported good). what is the most certain result of this action?\na) the number of domestic companies producing the good will increase.\nb) the price domestic buyers pay for the good will decrease.\nc) the governments tax revenue from other sources will increase.

a binding price floor is imposed on a market. which of the following statements is true?\na) a shortage of the good will be created.\nb) the quantity demanded will be greater than the quantity supplied.\nc) a surplus of the good will be created.\nd) the market will remain in equilibrium but at a higher price.\n\nthe term \deadweight loss\ from a tax refers to the:\na) total amount of tax money the government collects.\nb) the loss of economic benefits from trades that dont happen because of the tax.\nc) the portion of the tax that is paid for by the producers.\nd) the cost of hiring government workers to collect the tax.\n\na firm is selling a product at a price where demand is inelastic. what will happen if the firm raises the price?\na) total revenue will decrease because the quantity sold will fall a lot.\nb) total revenue will increase because the quantity sold will fall by a smaller percentage than the price increases.\nc) total revenue will stay the same because the price and quantity changes cancel out.\nd) the demand will immediately become elastic.\n\nthe government removes a tariff (a tax on an imported good). what is the most certain result of this action?\na) the number of domestic companies producing the good will increase.\nb) the price domestic buyers pay for the good will decrease.\nc) the governments tax revenue from other sources will increase.

Answer

Brief Explanations:

  1. A binding price - floor is set above the equilibrium price. At this price, the quantity supplied exceeds the quantity demanded, creating a surplus.
  2. Deadweight loss from a tax is the loss of economic benefits from trades that don't happen because of the tax. It represents the inefficiency caused by the tax.
  3. When demand is inelastic, a price increase leads to a proportionately smaller decrease in quantity demanded. So, total revenue increases as the price - quantity relationship results in an overall increase in revenue.
  4. When the government removes a tariff on an imported good, the price domestic buyers pay for the good will decrease as the cost of imports is reduced without the tariff.

Answer:

  1. c) A surplus of the good will be created.
  2. b) The loss of economic benefits from trades that don't happen because of the tax.
  3. b) Total revenue will increase because the quantity sold will fall by a smaller percentage than the price increases.
  4. b) The price domestic buyers pay for the good will decrease.