Question

A ________ consumer surplus is measured by subtracting price from the willingness to pay for a...

A ________ consumer surplus is measured by subtracting price from the willingness to pay for a good. The market consumer surplus is measured by an area under the ________ curve and above the price up to the relevant quantity.

a. Market: Supply

b. Individual: Demand

c. Market: Demand

d. Individual: Supply

With a price ceiling, there is a transfer of surplus from producers to _________ and there may be a potential ______ market due to shortage in the market.

a. Government: Black

b. Consumers: Black

c. Consumers: Gray

d. Government: Gray

Tax ________ is the relative tax burden borne by buyers and sellers and whoever has lower elasticity will bear ______ burden of a tax.

a. Incidence: More

b. Revenue: Less

c. Incidence: Less

d. Revenue: More

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Answer #1

A individual consumer surplus is measured by subtracting price from the willingness to pay for a good. The market consumer surplus is measured by an area under the demand curve and above the price up to the relevant quantity.

The correct option is therefore

b. Individual: Demand.

With a price ceiling, there is a transfer of surplus from producers to consumer and there may be a potential black market due to shortage in the market.

The correct option is therefore

b. Consumers: black.

Tax incidence is the relative tax burden borne by buyers and sellers and whoever has lower elasticity will bear greater burden of a tax.

The correct option is therefore

a. Incidence: more.

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