Chapter 6 Econ

¡Supera tus tareas y exámenes ahora con Quizwiz!

The government has imposed a price ceiling on sliced sandwich bread. What event could transform the price ceiling from one that is binding to one that is not binding?

A decrease in the price of unsliced bread, which people consider a substitute for sliced bread

The federal government uses the revenue from the FICA (Federal Insurance Contribution Act) tax to pay for

Social Security and Medicare

Suppose the government has imposed a price floor on cellular phones. Which of the following events could transform the price floor from one that is binding to one that is not binding?

Traditional land line phones become more expensive

You receive a paycheck from your employer, and your pay stub indicates that $400 was deducted to pay the FICA (Social Security/Medicare) tax. Given this information what is a true statement?

Your employer is required by law to pay $400 to match the $400 deducted from your check

A binding minimum wage

alters both the quantity demanded and quantity supplied of labor.

Suppose that in a particular market, the supply curve is highly elastic and the demand curve is highly inelastic. If a tax is imposed in this market, then the

buyers will bear a greater burden of the tax than the sellers

A $5 tax levied on the buyers of pants will cause the

demand curve for pants to shift down by $5

A tax burden

falls more heavily on the side of the market that is less elastic

If the government removes a binding price ceiling from a market, then the price received by sellers will

increase, and the quantity sold in the market will increase

The quantity sold in a market will increase if the government

increases a binding price ceiling in that market, decreases a tax on the good sold in that market, decreases a binding price floor in that market.

A nonbinding price ceiling

is set at a price above the equilibrium price

Minimum-wage laws dictate the

lowest price employers may pay for labor

One disadvantage of government subsidies over price controls is that subsidies

make higher taxes necessary

The minimum wage, if it is binding, raises the incomes of

only those workers whose jobs would pay less than the minimum wage if it didn't exist

The long-run effects of rent controls are a good illustration of the principle that

people respond to incentives

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

price

A tax imposed on the sellers of a good will raise the

price paid by buyers and lower the equilibrium quantity

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor,

quantity supplied increases, quantity demanded decreases, and there is a surplus

A tax imposed on buyers of a good will

raise the price buyers pay and lower the effective price sellers receive

A tax imposed on the sellers of a good will

raise the price buyers pay and lower the effective price sellers receive

Rent control policies tend to cause

relatively smaller shortages in the short run than in the long run because supply and demand tends to be more inelastic in the short run than in the long run

If the minimum wage exceeds the equilibrium wage, then

the quantity supplied of labor will exceed the quantity demanded

If a tax is levied on the sellers of a product, then there will be a(n)

upward shift of the supply curve


Conjuntos de estudio relacionados

CH 17, 20 (Newborn Nutrition/Intro to Pediatric Nursing)

View Set

Earth's History - Relative Dating

View Set

Chapter 6 Health Missed Questions

View Set