Micro Economics MCQ (GK Set-1) with Answers

Micro Economics MCQ (GK Set-1) with Answers

176) Which of the following statements about the incidence of a specific tax is false?

The incidence which falls on consumers plus the incidence which falls on producers equals the amount of the tax

The incidence falls more heavily on producers than consumers if the demand curve is flatter than the supply curve

The incidence falls more heavily on consumers than producers if the supply curve is flatter than the demand curve

The incidence always falls wholly on consumers

Answer is:

The incidence always falls wholly on consumers

177) Under which of the following circumstances would the incidence of a specific tax fall wholly on consumers?

Answer is:

Supply is perfectly elastic

178) Suppose the CAP has imposed a tariff on the import of a certain foodstuff from outside the EU, and suppose that EU consumers always pay a price equal to the rest of the world price plus the tariff. Which of the following events would not lead to a higher p

Answer is:

A rise in the supply of the foodstuff by EU producers

179) Suppose the CAP reduces the tariff on imports of a certain foodstuff from outside the EU. Which of the following statements is false?

Answer is:

The incomes of EU farmers would increase

180) Suppose the government introduces a prohibition on the supply or purchase of some substance. Assuming that some suppliers and some users ignore the law, which of the following could not occur?

Answer is:

There would be no price because the market would disappear underground

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