Which of the Following Will Cause an Increase in Producer

question 173

Multiple Choice

Which of the following will cause an increase in producer surplus?

• A)The imposition of a binding price ceiling in the market
• B)Buyers expect the price of the good to be lower next month
• C)The price of a substitute increases
• D)Income increases and buyers consider the good to be inferior

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Definitions:

Medicare Tax

A federal tax paid by employees and employers to fund the Medicare program, which provides health insurance for individuals who are 65 years of age and over, or who meet other specific criteria.

Payroll Taxes

Taxes imposed on employers and employees based on the wages and salaries of employees, used to finance social security and Medicare programs.

State Unemployment Contributions

Taxes paid by employers to state government funds for unemployment compensation programs.

Percentage Method

A way of calculating withholding taxes on an employee's pay by using percentages defined by tax tables based on the employee's earnings and filing status.