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