Lesson test: Equilibrium, surplus and taxes

3.[3p]
Why is total surplus maximised at the competitive quantity?

Below it there are units worth more than they cost, and above it units that cost more than they are worth

Correct

Because consumer surplus and producer surplus are equal there

The answer is: Below it there are units worth more than they cost, and above it units that cost more than they are worth

Because profit is zero there in the long run

The answer is: Below it there are units worth more than they cost, and above it units that cost more than they are worth

Because the price equals average total cost

The answer is: Below it there are units worth more than they cost, and above it units that cost more than they are worth

5.[2p]
Which side of the market bears more of a per-unit tax?

The more inelastic side, since it has fewer alternatives to escape into

Correct

The side the tax is legally levied on

The answer is: The more inelastic side, since it has fewer alternatives to escape into

The more elastic side, since it responds more

The answer is: The more inelastic side, since it has fewer alternatives to escape into

The two sides always split it evenly

The answer is: The more inelastic side, since it has fewer alternatives to escape into

6.[2p]
Doubling a per-unit tax roughly quadruples its deadweight loss.

True

Correct

False

The answer is: True

7.[3p]
With demand $Q_{d} = 120 - 2 p$ and supply $Q_{s} = 3 p - 30$ , a £20 tax cuts the quantity from 60 to 36. What is the deadweight loss in pounds?

CorrectNot quite: 240

8.[3p]
Which qualifications limit what the efficiency result claims?

Select all that apply

A pound of surplus counts the same whoever receives it, so distribution is invisible

Correct

Willingness to pay is bounded by ability to pay

Correct

The argument assumes all costs and benefits fall on the trading parties

Correct

Producer surplus is the same thing as profit

The answer is: A pound of surplus counts the same whoever receives it, so distribution is invisible, Willingness to pay is bounded by ability to pay, The argument assumes all costs and benefits fall on the trading parties

9.[3p]
What did Diamond, McQuade and Qian find about San Francisco rent control?

Covered tenants gained and stayed, while landlords cut the affected rental supply by about 15 per cent

Correct

Rent control had no measurable effect on either tenants or supply

The answer is: Covered tenants gained and stayed, while landlords cut the affected rental supply by about 15 per cent

Rents fell across the whole city with no offsetting response

The answer is: Covered tenants gained and stayed, while landlords cut the affected rental supply by about 15 per cent

Landlords absorbed the loss without changing the housing stock

The answer is: Covered tenants gained and stayed, while landlords cut the affected rental supply by about 15 per cent

Sign in

Equilibrium, surplus and taxes

1.[2p]
A market has $Q_{d} = 120 - 2 p$ and $Q_{s} = 3 p - 30$ . What is the equilibrium price in pounds?

2.[3p]
For that market, what is consumer surplus at equilibrium, in pounds?

3.[3p]
Why is total surplus maximised at the competitive quantity?

4.[3p]
A £10 per unit tax is imposed on that market. What price do buyers pay, in pounds?

5.[2p]
Which side of the market bears more of a per-unit tax?

6.[2p]
Doubling a per-unit tax roughly quadruples its deadweight loss.

7.[3p]
With demand $Q_{d} = 120 - 2 p$ and supply $Q_{s} = 3 p - 30$ , a £20 tax cuts the quantity from 60 to 36. What is the deadweight loss in pounds?

8.[3p]
Which qualifications limit what the efficiency result claims?

9.[3p]
What did Diamond, McQuade and Qian find about San Francisco rent control?

1.[2p] A market has Qd=120−2p and Qs=3p−30. What is the equilibrium price in pounds?

2.[3p] For that market, what is consumer surplus at equilibrium, in pounds?

3.[3p] Why is total surplus maximised at the competitive quantity?

4.[3p] A £10 per unit tax is imposed on that market. What price do buyers pay, in pounds?

5.[2p] Which side of the market bears more of a per-unit tax?

6.[2p] Doubling a per-unit tax roughly quadruples its deadweight loss.

7.[3p] With demand Qd=120−2p and supply Qs=3p−30, a £20 tax cuts the quantity from 60 to 36. What is the deadweight loss in pounds?

8.[3p] Which qualifications limit what the efficiency result claims?

9.[3p] What did Diamond, McQuade and Qian find about San Francisco rent control?

1.[2p]
A market has $Q_{d} = 120 - 2 p$ and $Q_{s} = 3 p - 30$ . What is the equilibrium price in pounds?

2.[3p]
For that market, what is consumer surplus at equilibrium, in pounds?

3.[3p]
Why is total surplus maximised at the competitive quantity?

4.[3p]
A £10 per unit tax is imposed on that market. What price do buyers pay, in pounds?

5.[2p]
Which side of the market bears more of a per-unit tax?

6.[2p]
Doubling a per-unit tax roughly quadruples its deadweight loss.

7.[3p]
With demand $Q_{d} = 120 - 2 p$ and supply $Q_{s} = 3 p - 30$ , a £20 tax cuts the quantity from 60 to 36. What is the deadweight loss in pounds?

8.[3p]
Which qualifications limit what the efficiency result claims?

9.[3p]
What did Diamond, McQuade and Qian find about San Francisco rent control?