FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Taxation and Government Intervention

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 21

Essay

Review LaterAdd Note

Review Later

Demonstrate graphically and explain verbally how the problem of price controls differs in the short-run and the long run.

Correct Answer

verified

The diagram: The explanation:
The initi...

View Answer

Show Answer

Question 22

Essay

Review LaterAdd Note

Review Later

Define rent-seeking activities and give an example. Use agricultural price supports to demonstrate that the value of rent seeking is linked to elasticity.

Correct Answer

verified

Rent-seeking activities are activities d...

View Answer

Show Answer

Question 23

Essay

Review LaterAdd Note

Use the diagram below to compute the dollar value of the consumer and producer surplus.

Demonstrate graphically and explain verbally the cost to society of a tax of t per carton imposed on the sellers of cigarettes.

There are far more consumers of agricultural commodities than there are producers; but agricultural producers have consistently been able to get Congress to vote them subsidies at taxpayer expense and supply restrictions at the consumer's expense. How can the success of the agricultural lobby be explained by "the general rule of political economy"?

Demonstrate graphically and explain verbally how the size of a shortage created by a price ceiling is related to the elasticity of the supply and demand curves.

Define consumer surplus and producer surplus. Explain why the equilibrium price and quantity maximizes the sum of producer plus consumer surplus (the total surplus).

The United States currently imposes a tariff on imported sugar. How does the burden imposed on suppliers and consumers by this tariff relate to the relative elasticities for sugar? Explain. NOTE: Be sure to include supply and demand diagrams as part of your explanation and vary the elasticity of demand, keeping elasticity of supply constant.

Define consumer surplus and producer surplus.

Demonstrate graphically and explain verbally how the incentive to restrict supply (and rent-seeking activities) by suppliers is stronger the less elastic the demand.

Use the diagram below to compute the dollar value of the consumer and producer surplus.

How are price ceilings similar to taxes on producers? How are price floors similar to taxes on consumers? How are both price ceilings and price floors different from taxes?