Exam Questions Efficiency And The Role Of Government Ch.5 - Economic Analysis of Public Policy 2e Test Bank by William K. Bellinger. DOCX document preview.
Chapter 5 Multiple Choice Questions
1. In Figure 5-15 what is the government surplus with the tax in place?
a. A+B+C+D
b. B+C+D+E+F+G
c. B+C+E+F
d. E+F+G+H+I
2. In figure 5-15 what is the CHANGE in the producer surplus due to the tax?
a. E+F+G
b. E+F
c. B+C
d. B+E+H
3. What is the Government Surplus with the Subsidy in place?
a. negative A+B+C+D+E
b. negative A+H+I
c. negative B+C+D+E+H+I
d. negative B+C+D+E
e. none of the above, the government surplus is positive
4. Using the same figure, what is the net benefit with the subsidy?
a. B+C+D+E+H-I
b. A+B+C+F-I
c. H+D+E-I
d. A+B+C+D+E-I
5. What is the producer surplus with the quota?
a. D+E
b. B+C+D+E
c. B+D+E
d. B+D
6 . The deadweight loss with the quota is
a. D+C+F+E+I
b. C+D+E+F
c. C+E+F+I
d. E+I
7. In Figure 5-6 the deadweight loss is ____for the price ceiling and _____ for the price floor.
a. C+E for both
b. D+E for the price ceiling and B+C for the price floor
c. F for the price ceiling and A for the price floor
d. C for the price ceiling and C+E for the price floor
Suppose that the production of a good produces a negative externality resulting in higher marginal social costs (MSC) than marginal private costs (MPC). Suppose MPC=10+Q and MSC=10+1.5Q and Demand is P=100-Q.
8. What is the social equilibrium quantity and price?
a. Q = 45, P = 55
b. Q = 36, P = 64
c. Q = 55, P = 65
d. Q = 35, P = 45
9. What is the optimum tax rate?
a. 64-46 = 18
b. 64-55 = 9
c. 55-45 = 10
d. 77.5-55 = 22.5
10. What is the government surplus with the optimal tax in place?
- Zero
- $324
- $648
- $1,012.5
11. The school of thought that believes self-interested voters, politicians and interest groups limit government’s ability to produce effective policy is known as
a. Chicago School
b. Virginia School
c. Austrian School
d. Keynesian School
12. Rent-seeking occurs when
a. the government regulators for an industry are taken over by the businesses they are meant to regulate
b. the owner of land collects rent from her tenants
c. an organization seeks to get benefits from the government using lobbying
d. a person seeks the lowest cost apartment he can afford
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Economic Analysis of Public Policy 2e Test Bank
By William K. Bellinger