Econ 202 Ch 6 Q&A

A price ceiling is binding when it is set

below the equilibrium price, causing a shortage

A shortage results when a

binding price ceiling is imposed on a market

A surplus results when a

binding price floor is imposed on a market

A binding minimum wage tends to

cause a labor surplus, cause unemployment and have the greatest impact in the market for teenage labor

A tax on buyers will shift the

demand curve downward by the amount of the tax

A minimum wage that is set below a market's equilibrium wage will

have no impact on employment

A tax burden falls more heavily on the side of the market that

is more inelastic

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

price paid by buyers and lower the equilibrium quantity

A tax on sellers will shift the

supply curve upward by the amount of the tax

A minimum wage that is set above a market's equilibrium wage will result in an excess

supply of labor, that is, unemployment