28 If governments goal is to alter peoples behavior through taxation then taxing

28.If government's goal is to alter people's behavior through taxation, then taxing goods with relativelyelastic demand and supply would be most effective.

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Page 121Reason -29.A price ceiling is in essence an implicit tax on producers and an implicit subsidy to consumers.

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30.Unlike excise taxes, price ceilings create no deadweight loss.

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MICRO ECONOMICSFINALReason - A price ceiling is a government-imposed maximum price set below the equilibrium price.When a price ceiling is set below the equilibrium, it creates a shortage because the quantitydemanded exceeds the quantity supplied at that artificially low price. This shortage leads toinefficient allocation of resources and can result in deadweight loss.Deadweight loss refers to the loss of economic efficiency that occurs when the quantity traded isbelow the equilibrium quantity. In the case of a price ceiling, deadweight loss arises due to themissed gains from trade that could have occurred at the equilibrium price and quantity. Additionally,price ceilings can lead to reduced incentives for producers to supply goods, resulting in furtherdistortions and inefficiencies in the market.Therefore, price ceilings can indeed create deadweight loss by causing inefficient resource allocationand limiting market transactions.