Q1. Assuming equal expected penalties to buyers and sellers in the market for an illegal good, which of the following most accurately describes respective equilibrium price and quantity relative to the market for a legal good?

A)   Higher; lower.

B)   Same; lower.

C)   Same; higher.

Q2. Which of the following is the most likely effect of a subsidy in the market for corn?

A)   Marginal costs will be less than marginal benefit.

B)   The supply curve for corn will shift downward.

C)   The equilibrium quantity of corn will decrease.

Q3. Which of the following is the most likely effect of a quota on wheat?

A)   The supply curve will shift downward.

B)   Marginal costs will be greater than marginal benefit.

C)   Nothing if the quota is set above the equilibrium quantity.

Q4. Which of the following is the most likely effect of fines and penalties that are only imposed on the seller in a market for illegal goods?

A)   The price will rise and the quantity supplied will remain the same.

B)   The price will remain the same but the quantity supplied will decline.

C)   The price will rise and the quantity supplied will decline.

答案和详解如下：

Q1. Assuming equal expected penalties to buyers and sellers in the market for an illegal good, which of the following most accurately describes respective equilibrium price and quantity relative to the market for a legal good?

A)   Higher; lower.

B)   Same; lower.

C)   Same; higher.

Correct answer is B)

With an equal penalty to buyers and sellers, the vertical shift in both the supply and demand curve offset each other, and the price for the illegal good remains the same. The equilibrium quantity, however, is less than that for the legal good.

Q2. Which of the following is the most likely effect of a subsidy in the market for corn?

A)   Marginal costs will be less than marginal benefit.

B)   The supply curve for corn will shift downward.

C)   The equilibrium quantity of corn will decrease.

Correct answer is B)

A subsidy causes a shift in the supply curve downward by the amount of the subsidy. The equilibrium quantity will increase and the price paid by buyers will decrease. Marginal cost will exceed marginal benefit and a deadweight loss will result from overproduction.

Q3. Which of the following is the most likely effect of a quota on wheat?

A)   The supply curve will shift downward.

B)   Marginal costs will be greater than marginal benefit.

C)   Nothing if the quota is set above the equilibrium quantity.

Correct answer is C)         

A quota does not cause the supply curve to shift. The equilibrium quantity will decrease to the quota amount. Marginal cost will be less than marginal benefit, leading to a deadweight loss from underproduction.

Q4. Which of the following is the most likely effect of fines and penalties that are only imposed on the seller in a market for illegal goods?

A)   The price will rise and the quantity supplied will remain the same.

B)   The price will remain the same but the quantity supplied will decline.

C)   The price will rise and the quantity supplied will decline.

Correct answer is C)         

If the penalty for trading in illegal goods is on sellers rather than on buyers, the supply curve will shift up and the market price will rise above the initial market price. The equilibrium quantity traded will decline.

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B

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