In the diagram below a legal price floor of $7 would result in: $9 8 7 Equilibrium price and quantity Price per pound D N 0 5 10 15 20 25 30 35 40 45 Quantity (millions of pounds of coffee per month) O A surplus of 10 units O A surplus of 5 units No surplus or shortage O A surplus of 30 unitsIf a government imposes a legal price ceiling below the equilibrium price in a market, then: O Rationing will be unnecessary The quantity demanded will exceed the quantity supplied O The quantity supplied will exceed the quantity demanded O The market will create surpluses of the goodIn the following graph of a market, a legal price ceiling of $3.50 will result in: $4.50 4.00 S 3.50 3.00 2.50 Price per dozen bagels 2.00 1.50 1.00 D 0.50 0.00 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Quantity (thousands of dozens per month) O No shortage or surplus O A surplus of 8 units O A shortage of 8 units O A black market price greater than $3.50In a market setting, government-set price floors and price ceilings: O Always result in shortages of products in markets where they are used O Interrupts the rationing function of price O Has no impact on the rationing function of price O Always result in surpluses of products in markets where they are usedThe incidence of taxation refers to: O) Whether or not the benefits-received principle applies O Whether taxes are progressive or regressive O Who in society actually pays the tax O The structure of basic income tax ratesSuppose the government grants a subsidy to the producers for every car produced. The change in the amount sold will be greater when: O the price elasticity of demand is inelastic. O there is a greater number of close substitutes available to the consumer O the amount of the subsidy is smaller O the price elasticity of demand for cars is greaterConsider a subsidy of $6.00 per unit is granted to the producers of a product with a perfectly inelastic demand, the effect will be to: O Lower the price of the product to consumers by $6.00 per unit O Raise the price received by producers by $6.00 O Raise the price received by producers by more than $6.00 per unit O Lower the revenue received by producers by $6.00 per unitRefer to the graph. Assume the government imposes a $20 tax on this product, what is the area that represents the total amount of tax revenue going to the government? D S 25 K 15 g 5 Q Q2 Q1 OK +J+F+G OK +F OJ+G OK+ JRefer to the graph. As a result of the tax of $20, what is the total loss of consumer and producer surplus? S 25 K 15 g 5 Q Q2 Q1 OK + J OK + J +F+G OJ+G OK +FRefer to the graph. As a result of the tax of $20, what is the total deadweight loss to society? S 25 K 15 g 5 Q Q2 Q1 OK+J OK +F OK +J +F+G OF+G