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Exam 6: Supply, Demand, and Government Policies

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Question 231

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Figure 6-11 -Refer to Figure 6-11. If the government imposes a price ceiling at $6, it would be

A) binding if market demand is Demand A or Demand B.
B) non-binding if market demand is Demand A or Demand B.
C) binding if market demand is Demand A and non-binding if market demand is Demand B.
D) non-binding if market demand is Demand A and binding if market demand is Demand B.

E) A) and C)
F) B) and C)

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Question 232

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If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour, then a shortage of labor will exist.

A) True
B) False

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Question 233

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Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the seller receives $4.

Figure 6-21 -Refer to Figure 6-21. The price that buyers pay after the tax is imposed is

If a tax is levied on the sellers of flour, then

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

The quantity sold in a market will decrease if the government

Figure 6-21 -Refer to Figure 6-21. In the after-tax equilibrium, how much revenue does the government collect from the tax on this good?

Figure 6-31 -Refer to Figure 6-31. If the government set a price ceiling at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

The following table shows the demand and supply schedules in a particular market. If the government sets a price floor $2 above the equilibrium price, how many units will be sold in this market?

Figure 6-22 -Refer to Figure 6-22. Suppose the same supply and demand curves apply, and a tax of the same amount per unit as shown here is imposed. Now, however, the buyers of the good, rather than the sellers, are required to pay the tax to the government. After the buyers pay the tax, relative to the case depicted in the figure, the burden on buyers will be

Figure 6-21 -Refer to Figure 6-21. What is the amount of the tax per unit?

Table 6-3 The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market. -Refer to Table 6-3. How many units of the good are sold after the imposition of the price floor?

Which of the following is correct? Price controls

Suppose the government imposes a $40 tax on the buyers of refrigerators. The tax would

When a price floor is binding, is the price floor set above or below the market equilibrium price?

Figure 6-3 Panel a) Panel b) -Refer to Figure 6-3. In panel a) , there will be

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Table 6-6 -Refer to Table 6-6. If the government set a price ceiling at $2, would there be a shortage or surplus, and how large would be the shortage/surplus?

The term tax incidence refers to how the burden of a tax is distributed among the various people who make up the economy.