What happens when a tax is imposed on a good?
Correct answer D. An increase in the price buyers pay, a decrease in the price sellers receive, and a decrease in the quantity sold
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Economics MCQs
Page 7 of Economics multiple-choice questions with answers. Tap an option to check yourself.
Page 7 of 131
- Miscellaneous Economics 737
- Basic of Economics 430
- Markets, Efficiency And The Public Interest 167
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- Market 87
- Macroeconomic Issues and Analysis 75
- Money, Interest Rates And Output 73
- Introduction To Economics 70
- Population And Development 62
- Profit Maximizing Under Perfect Competition And Monopoly 56
- Income Inequality 52
- Non-Tariff Trade Barriers 48
- Aggregate Supply, Unemployment And Inflation 45
- Natural Resources and the Environment Toward Sustainable Development 44
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- Regional Trading Arrangements 29
- Characteristics and Institutions of Developing Countries 24
- Oligopoly 23
- Consumer Theory vs. Real Consumers 20
- Applied Microeconomics 20
- Alternative Theories Of The Firm 20
- Public Goods 20
- Balance of Payments, Aid and Foreign Investment 19
- Prices, Wages & Taxes 19
- Comparative GDP 19
- Budget Deficits And The Trade Balance 18
- Macroeconomic Policy Tools 18
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- Application of Economics 16
- Production Factors 16
- Monopoly & Competition 15
- Capital Formation, Investment Choice, Information Technology, And Technical Progress 15
- Monetary, Fiscal And Incomes Policy, And Inflation 15
- Average And Total Cost 14
- Poverty, Malnutrition, And Income Inequality 12
- Monetary Union 10
When does the burden of a tax fall more heavily on sellers?
Correct answer A. When demand is elastic and supply is inelastic
When does the burden of a tax fall more heavily on buyers?
Correct answer D. When demand is inelastic and supply is elastic
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For which product would the burden of a tax probably fall more heavily on sellers?
Correct answer B. Entertainment
What does a binding price ceiling create?
Correct answer B. A shortage
What does a price floor do?
Correct answer A. It sets a legal minimum on the price at which a good can be sold
Which side of a market is more likely to lobby the government for a price floor?
Correct answer A. The sellers
Which of the following is an example of a price floor?
Correct answer B. The minimum wage
After a rise in the minimum wage, which worker is most likely to find it harder to get a job?
Correct answer C. A teenage worker with few qualifications
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In the supply and demand model, how does a tax collected from sellers shift the curves?
Correct answer C. The supply curve shifts upward by the size of the tax per unit
What happens when a tax is collected from the buyers in a market?
Correct answer A. The tax burden on buyers and sellers is the same as with an equivalent tax collected from the sellers
If a tax is imposed on a good that consumers regard as a necessity, how is the burden likely to be shared?
Correct answer B. It falls more heavily on buyers
Which statement about the burden of a tax is correct?
Correct answer C. The distribution of the burden of a tax is determined by the relative elasticities of supply and demand, not by legislation
The Human Development Report 2003 calculates a human poverty index from which deprivations: I. probability at birth of not surviving to 40, II. adult illiteracy rate, III. negative economic growth, IV. lack of a decent standard of living?
Correct answer B. I, II and IV only
What term describes income below the level needed to secure the bare essentials of food, clothing and shelter?
Correct answer A. Absolute poverty
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What do indices of income distribution measure?
Correct answer A. Relative poverty
What does a Gini index value of 1 represent?
Correct answer D. Maximum inequality
In 2003, the UN Development Programme estimated that 1 percent per capita consumption growth in LDCs, with inequality unchanged, would cut the poverty rate by about how many percent a year?
Correct answer D. 2
What does the Lorenz curve show?
Correct answer B. Income concentration relative to a 45-degree line
How does Sala-i-Martin interpolate income distribution?
Correct answer D. Simulation