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- 1. Multiple Choice
Which regions show the total consumer expenditure after the subsidy is implemented?
D+J+K+L
C +I + D +J
B + E + F +C + I +H + G +D + J + K + L
B + E + F +C + I +H +G
- 2. Multiple Choice
Which regions show the total amount of money spent by the government to fund the subsidy?
D + J + K + L
C + I + D + J
B + E + F + C + I + H + G + D + J + K + L
B + E + F + C + I + H + G
- 3. Multiple Choice
The demand and supply schedules for grain are shown in the image. The government fixes the minimum price (price floor) at $18 per tonne. How much will this cost taxpayers, IF the government buys the entire economic surplus?
$72,000
$108,000
$144,000
$180,000
- 4. Multiple Choice
Which sections represent the incidence of tax paid by customers?
A + B + C +E
D +F + G
B +C
D
- 5. Multiple Choice
Which sections represent the government’s tax revenues?
B + C +D + H +I
B+C+D
D +F + G
E+F
- 6. Multiple Choice
Which of the following is not an effect of a price ceiling being imposed?
Improvement in allocative efficiency
Reduced market supply
Creation of unofficial markets
Shortages
- 7. Multiple Choice
What is the reason why price ceilings are often imposed on essential goods and services, such as food products and rents on public housing?
To make these goods and services affordable to low-income earners
To reduce the consumption level of these goods and services
To create informal markets for these products
To create producer surplus for suppliers of these goods and services
- 8. Multiple Choice
Which of the following market responses is most rational to expect?
Excess supply leads to reduced prices
Excess demand leads to reduced prices
Excess supply leads to increased prices
Consumer and producer surplus are equal at market equilibrium
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