True or False:
1. Other things being equal, the more elastic the demand curve or the more elastic the supply curve, the smaller the deadweight loss of a tax.
2. If either the supply or demand curve becomes more inelastic, a given tax will reduce the quantity exchanged by a greater amount.
3. Those goods that are heavily taxed often have a relatively inelastic demand curve in the short run, so the burden falls mainly on the buyer, and the deadweight loss to society is smaller than if the demand curve were more elastic.
4. Consumers never benefit from a binding price ceiling.
5. Any possible gains to consumers are more than offset by losses to producers when a binding price ceiling is in place.
6. With an agricultural price-support program where the government buys up the surplus, a net benefit is realized because the benefits to producers are greater than the cost to consumers.
7. The deadweight loss is greater in an agricultural price-support program than in a deficiency payment plan.