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IB Economics - Government Intervention Flashcards | StudBud
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IB Economics - Government Intervention
IB Economics - Government Intervention
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A revision #chapter 4 #IB economics #Government Intervention
Flashcards
16 cards
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Questions
16
Answers
1
Indirect taxes are fully paid by the consumer to the government
False
True
2
What is Tax Incidence?
The Burden of a tax
Share of tax depending on the elasticity
The distribution of a tax
The revenue of the govt.
3
Calculate the total subsidy the govt. grants
80
40
360
96
4
After a tax per unit of output, the consumer surplus will
Any two
Decrease
Increase
Be unchanged
5
Calculate the change in consumer and producer surplus from pre tax to post tax
196
100
75
121
6
Why do governments impose indirect(Excise) taxes?
It can be used to redistribute income
They are a source of revenue for the govt.
all of the above
Method to improve allocation of resources
7
Consequences of price floors
Shortages
Efficient firms
Govt. has to dispose surpluses
None
8
What are the market outcomes of a subsidy?
There is overallocation of resources to production of good
Equilibrium Q produced and consumed increases
Equilibrium P increases; the price paid by the consumers
any two
9
Who enjoys minimum wage?
All workers
Some workers
Firms (employers)
Consumers
10
Why govts. grant subsidies?
Any two
Used to make certain goods affordable to low income consumer
It can be used to increase revenues of the govt.
Can be used to increase imports
11
Price floor is set for
both
supporting income of farmers
protecting low wage workers
12
"Low unemployment" was taught to you by?
Parth Jain
Hitesh Surti
Anbu Packiaraj
Shezin Siganporia
13
The more inelastic a demand/supply schedule,more of the tax burden will fall on the other side
True
False
14
In the shaded region, what is the distribution of the incidence of tax levied
Any two of the above
P* to Pp is paid by the producer
Pc to P* is paid by the producer
Pc to P* is paid by the consumer
15
What are the market outcomes of a price ceiling?
Higher Q demanded than at equilibrium
lower Q demanded than at equilibrium
Higher Q supplied than at equilibrium
It creates excess demand
16
All consumers gain due to a price ceiling
True
False
Only producers gain
