Business > EXAM > Principles of Microeconomics Final Exam | 68 Questions with 100% Correct Answers (All)

Principles of Microeconomics Final Exam | 68 Questions with 100% Correct Answers

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When a tax is imposed on the buyers of a good, the demand curve shifts - ✔✔downward by the amount of the tax Efficiency is attained when - ✔✔total surplus is maximized. The size of the dead... weight loss generated from a tax is affected by the - ✔✔elasticities of both supply and demand. The maximum price that a buyer will pay for a good is called the - ✔✔willingness to pay. When a tax is placed on a product, the price paid by buyers _________, and the price received by sellers __________. - ✔✔rises; falls Consumer surplus is equal to the - ✔✔Value to buyers - Amount paid by buyers. The decrease in total surplus that results from a market distortion, such as a tax, is called a - ✔✔deadweight loss. Laissez-faire is a French expression which literally means - ✔✔allow them to do. The Laffer curve relates - ✔✔the tax rate to tax revenue The "invisible hand" is - ✔✔a concept developed by Adam Smith to describe the virtues of free markets. If the size of a tax increases, tax revenue - ✔✔may increase, decrease, or remain the same A country has a comparative advantage in a product if the world price is - ✔✔higher than that country's domestic price without trade. Trade enhances the economic well-being of a nation in the sense that trade results in a(n) - ✔✔increase in total surplus Several arguments for restricting trade have been advanced. Those arguments do not include - ✔✔the no-deadweight-loss argument What is the fundamental basis for trade among nations? [Show More]

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