If the demand curve reflects consumers' full willingness to pay, and the supply curve reflects all costs of production, then which of the following is true?
A. The benefit surpluses shared between consumers and producers will be maximized.
B. The benefit surpluses received by consumers and producers will be equal.
C. There will be no consumer or producer surplus.
D. Consumer surplus will be maximized, and producer surplus will be minimized.
Answer: A
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Which of the following statements is FALSE?
A) If there is an increase in the demand for a product, consumers want to buy more of the product at each and every possible price. B) A decrease in demand shifts the demand curve leftward toward the origin, while a decrease in quantity demanded involves a movement upward along a particular demand curve. C) If the price of a good rises, quantity demanded of the good decreases and the demand curve shifts toward the origin as long as supply is static. D) A change in the demand for a product is caused by factors other than changes in the product's price.
The benefits-received principle of taxation is:
A. The basis for the gasoline tax B. Easy to apply because benefits received are conveniently measurable C. Applied in income-redistribution programs D. The principle behind the income tax system