Which of the following would increase quantity supplied, decrease quantity demanded, and increase the price that consumers pay? ( )
A. the imposition of a binding price floor.
B. the removal of a binding price floor.
C. the passage of a tax levied on producers .
D. the repeal of a tax levied on producers .
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If the government places a $100 tax on luxury cars, which of the following is true ( )
A. the price paid by consumers will rise by more than $100 as a luxury car likely has an elastic demand
B. the price paid by consumers will rise by more than less than $500 as a luxury car likely has an elastic demand
C. the price paid by consumers will rise by exactly $100 as as a luxury car likely has an perfectly elastic demand
D. the price paid by consumers will rise by exactly $100 as as a luxury car likely has an perfectly inelasticsupply
Jen values her time at $60 an hour. She spends 2 hours giving Colleen a massage. Colleen was willing to pay as much at $300 for the massage, but they negotiate a price of $200. In this transaction, ( )
A. consumer surplus is $20 larger than producer surplus.
B. consumer surplus is $40 larger than producer surplus.
C. producer surplus is $20 larger than consumer surplus.
D. producer surplus is $40 larger than consumer surplus.
Governments may intervene in a market economy in order to ( )
A. protect property rights.
B. correct a market failure due to externalities.
C. achieve a more equal distribution of income.
D. All of the above.
You win $100 in a basketball pool. You have a choice between spending the money now and putting it away for a year in a bank account that pays 10 percent interest. The opportunity cost of spending the $100 now is ( )
A. to spend $100 one year from now
B. to spend $105 one year from now
C. to spend $115 one year from now
D. to spend $95 one year from now.
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