Questions and Answers
What is the primary purpose of rent control policies?
To make tenants better off
Which of the following best describes consumer surplus?
The difference between the highest price a consumer is willing to pay and the actual price they pay
Which of the following is an example of a positive externality?
The benefits to society from a well-educated population
How do subsidies affect market efficiency?
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Which of the following is the MOST effective government policy for addressing a negative externality?
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Which of the following is a key characteristic of a competitive market?
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What term is used to describe the total net benefit to consumers and firms in economics?
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In a competitive equilibrium, when does economic efficiency occur?
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What happens to consumer surplus when a market is not in equilibrium?
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Which concept results in the maximization of economic surplus in a market?
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What does the supply curve describe in relation to the market for chai tea?
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What happens to consumer surplus when the price of chai tea increases from $2.00 to $2.20?
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What does producer surplus measure?
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Which area on the graph represents producer surplus?
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What does economic efficiency in a market refer to?
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What is the relationship between consumer surplus and producer surplus?
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Which of the following is true about a competitive market?
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What is the primary purpose of corrective taxes or subsidies in a market?
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