1. A production subsidy on gasoline would:

cause the price of gas to fall (for consumers) and the amount consumed to rise

cause the price of gas to fall (for consumers) and also the amount consumed to fall

cause the price of gas to rise (for consumers) and the amount consumed to rise

cause the price of gas to rise (for consumers) and the amount consumed to fall

2 - The total amount spend by consumers on a good is seen graphically as Price x Quantity. A government-imposed price floor above the market price of milk would most likely increase consumers' total expenditures on milk when:

demand is elastic

supply is inelastic

demand falls

demand is inelastic

supply is unit elastic

3 - The short-run price elasticity of demand for gasoline is 0.2, this means that a

Group of answer choices

20 percent decrease in price causes a 1 percent increase in quantity demanded

0.2 percent decrease in price causes a 1 percent increase in quantity demanded

5 percent decrease in price causes a 1 percent increase in quantity demanded

0.2 percent decrease in price causes a 0.2 percent increase in quantity demanded

100 percent decrease in price causes a 200 percent increase in quantity demanded

4 - The earned income tax credit is an example of

a price ceiling

a policy designed to increase efficiency with no negative incentive effects.

a wage subsidy.

a price floor

free market allocation