Question 9 Not yet answered Marked out of 1.00 "ag question In case of externalities, anpropriate government policy would be Select one: O a. subsidies in both the case of external benefits and the case of external costs. O b. taxes in the case of external benefits and subsidies in the case of external costs. O c. subsidies in the case of external benefits and taxes in the case of external costs. O d. taxes in both the case of external benefits and the case of external costs. Previous page Next page a 9 un A A p=6 B 4 D Q* - 10 Q According to the graph shown, if the market is in equilibrium, economic surplus is shown by the area: Select one: O a. A+B+C O b. B. O c. c. O d. A+B. Question 6 Not yet answered Marked out of 1.00 P Flag question Assume that the producn of a good generates a negative externality. The govern ent taxes producers to discourage the negative externality. After the tax, the market equilibrium quantity will ........ and market equilibrium price will...........(hint: draw the supply- demand diagram and see the change) Select one: O a. decrease; decrease O b. increase; increase; O c. decrease; increase O d. increase; decrease Question 10 Not yet answered Marked out of 1.00 Flag question Economic surplus of a single transaction is the O a benefit minus the price (cost). O b. price charged minus cost of production O c. consumer surplus minus producer surplus O d. marginal benefit plus the marginal cost. Jestion 11 Not yet answered Marked out of 1.00 P Flag question Other things remaining the same, an increase in price of goods will Select one: O a. increases sumer surplus because consumer surplus is the difference between what the consumer is required to pay for it and what the consumer is willing to pay. O b. increase producer surplus because producer surplus is the monetary difference between what a producer is paid for a good and the producer's willing to charge price. Oc. increase consumer surplus because it results in a higher price for the quantity to be consumed. O d. decreases producer surplus because producer surplus is the difference between the producer's cost and what a producer is paid for a good. 225PM Prin - Microeconomics (ECON-2123-MWO2S) Question 12 Not yet answered Marked out 00 P Flag question Say, the price elasticity of demand is 2. Then a 2 percent decrease in the price of the good will lead to a percent increase in the quantity demanded. Select one: O a. 4 Ob. 100 OC. 1 O d. 2 *** LOT Question 13 Not yet answered Marked out of 1. Flag question Say, peanuts cost $2 per bag. Next bag of peanuts gives you the utility of 20 utils. Soda costs $1 per cup. Next soda gives you the utility of 10 utils. You have a budget of $1. Which of the following options gives you the the maximum utility per dollar? Select one: O a. a half bag of peanuts O b. either a soda or a half bag of peanuts; both give same utility per dollar. a O c. one soda O d. neither
