micro economics test 1 of 2

minimum wage laws dictate the

lowest price employers may pay for labor

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

price payed by buyers and lowers the equilibrium quantity

a tax imposed on the sellers of a good will

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

When OPEC raised the price of crude oil in the 1970s, it caused the what?

supply of gasoline to decrease

which of following statement causes a shortage of a good

a binding price ceiling

which of the of following statement causes a surplus of a good

a binding price floor

a tax imposed on the sellers of a good will lower the

effective price receive by seller and lowers equilibrium quantity

a pay roll tax is a

tax on the wages that firms pay their workers

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell. Further, suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle. Which of the following statements is correct?

the effective price received by sellers is .40 per bottle less than it was before the tax

a tax incidence

the manner in which the burden of a tax is shared among participants in a market

a key lesson from the payroll tax is that the

true burden of a tax cannot be legislated