Taxes cause deadweight losses because they（）
A. lead to losses in surplus for consumers and for producers that, when taken together, exceed tax revenue collected by the government
B. distort incentives to both buyers and sellers
C. prevent buyers and sellers from realizing some of the gains from trade
D. All of the answers are correct
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Normative statements are（）
A. descriptive
B. claims about how the world should be
C. claims about how the world is
D. made by economists speaking as scientists
Suppose that the equilibrium price in the market for widgets is $5. If a law increased the minimum legal price for widgets to $6（）
A. the resulting increase in consumer surplus would be larger than any possible loss of producer surplus
B. the resulting increase in consumer surplus would be smaller than any possible loss of producer surplus
C. any possible increase in producer surplus would be larger than the loss of consumer surplus
D. any possible increase in producer surplus would be smaller than the loss of consumer surplus
If a market is allowed to adjust freely to its equilibrium price and quantity, then an increase in demand will（）
A. increase producer surplus
B. reduce producer surplus
C. not affect producer surplus
D. Any answer is possible
The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the（）
A. amount of the other good that must be given up
B. market price of the additional amount produced
C. amount of resources that must be devoted to its production
D. number of dollars that must be spent to produce it
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