Intervention Prior Learning Check

Ceteris paribus, indirect taxes lead to

• a surplus, or

• a rightward shift of the supply curve

• a leftward shift of the supply curve

• a shortage, or excess demand

ceteris paribus, price ceilings lead to

• a surplus, or excess supply

• a rightward shift of the s

• a leftward shift of the supply curve

• a shortage, or excess demand

Which of the following statements is true

• The imposition of an indirect tax results in a disequilibrium price and quantity

• The imposition of an indirect tax results in a lower price for consumers and higher price for producers

• the imposition of an indirect tax results in a higher equilibrium price and lower equilibrium quantity

• the imposition of an indirect tax results in a loss of government revenue

The objective to increase firms' revenues such as farmers, may be achieved by

• subsidies and price ceilings

• subsidies and price floors

• indirect taxes and price floors

• indirect taxes and price ceilings

Indirect taxes may be imposed to

• make housing more affordable for poor people

• support the wages of low-skilled workers

• decrease consumption of harmful goods

• increase consumption of goods desirable for society

Price ceilings may be imposed to

• make housing more affordable for poor people

• support the wages of low-skilled workers

• decrease consumption of harmful goods

• increase consumption of goods desirable for society

Subsidies may be imposed to

• make housing more affordable for poor people

• support the wages of low-skilled workers

• decrease consumption of harmful goods

• increase consumption of goods desirable for society

Price floors may be imposed to

• make housing more affordable for poor people

• support the wages of low-skilled workers

• decrease consumption of harmful goods

• increase consumption of goods desirable for society

Identify which of the following statements is false

• Subsidies lead to lower prices for consumers and higher prices for producers

• Subsidies lead to a burden for the government budget and taxpayers

• Subsidies lead to larger quantities produced and consumed

• Subsidies lead to higher costs of production and lower revenues for firms

Price floors are a ________, and result in a _______ of the product that is produced.

• minimum price / surplus

• minimum price / shortage

• maximum price / surplus

• maximum price /shortage