21. A leftward shift of the market demand curve, ceteris paribus, causes equilib
ID: 1132932 • Letter: 2
Question
21. A leftward shift of the market demand curve, ceteris paribus, causes equilibrium:
Price to decrease and quantity exchanged to increase.
22. Which of the following is a predictable effect of a price ceiling set below the current price?
23. In economics, a public good:
All of the above.
24. If a production of a good yields external benefits, then the:
Both (B) and (C).
25. Suppose that if your income is $50,000, your tax is $10,000, but if your income is $100,000, your tax is $10,000. Such a tax is:
Similar to our current federal income tax structure.
26. If the United States decides to convert automobile factories to tank production, as it did during World War II, but finds that some auto manufacturing facilities are not well suited to tank production, then:
The production-possibilities curve between tanks and automobiles will curve inward.
27. In a market with negative externalities, a tax on producers in that market will:
Lower the market price and increase economic efficiency.
28. Which of the following changes in the market for HDTV's can best explain an increase in the equilibrium price?
A decrease in both demand and supply.
Price to increase and quantity exchanged to decrease.Explanation / Answer
21) A leftward shift of market demand curve means a decrease in demand where at each price level the consumer demands less of each quantity. So a leftward shift in demand causes price to decrease and quantity exchange to decrease.
22) If a price ceiling is set below the current price will create a shortage in the market where the demand is in excess than supply at price ceiling. So the correct answer is none of the above.
23) In Economics, public good has the characteristic that it is non excludable meaning that it cannot be denied to consumers who have not paid.
24) If a production of the good yield external benefits , then the social demand is greater than the market demand.
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