supply curve shifts

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1. When a tax is imposed on the sellers of a good,

1. the demand curve shifts downward by less than the amount of the tax.
2. the demand curve shifts downward by the amount of the tax.
3. the supply curve shifts upward by less than the amount of the tax.
4. the supply curve shifts upward by the amount of the tax.

The supply curve shifts upward by less than the amount of the tax.. If the suppliers absorb some tax and do not pass on the entire tax burden to the customer, the shift will be less than the amount of tax.
2. Trade raises the economic well-being of a nation in the sense that

1. the gains of the winners exceed the losses of the losers.
2. everyone in an economy gains from trade.
3. since countries can choose what products to trade, they will pick those products that are most beneficial to society.
4. the nation joins the international community when it begins to engage in trade.

the gains of the winners exceed the losses of the losers. some losers are local industries that may be forced out of business.
3. Externalities

1. cause markets to fail to allocate resources efficiently.
2. cause equilibrium prices to be too high.
3. benefit producers at the expense of consumers.
4. cause equilibrium prices to be too low.

Cause markets to fail to allocate resources efficiently. If the price mechanism does not take into account the full social costs and social benefits.

4. Public goods are both

1. excludable and nonrival in consumption.
2. nonexcludable and rival in consumption.
3. excludable and rival in consumption.
4. nonexcludable and nonrival in consumption.

excludable and nonrival in consumption.

5. The term market failure refers to

1. a market that fails to allocate resources efficiently.
2. an unsuccessful advertising campaign which reduces demand.
3. ruthless competition among firms.
4. a firm that is forced out of business because of losses.

a market that fails to allocate resources efficiently.. Usually because the price mechanism does not take into account the full social costs and benefits.
6. Table 7-1
BUYER WILLINGNESS TO PAY
MIKE $50.00
SANDY $30.00
JONATHAN $20.00
HALEY $10.00

Refer to Table 7-1. If the table represents the willingness to pay of four buyers and the price of the product is $18, then their total consumer surplus is

1. $38.
2. $42.
3. $46. ...