Market equilibrium and policy 2

A tax imposed to buyers

Shifts the demand curve down, because a portion of the price of the food pays the tax a

Supplies have an incentive quantity supplied when there is a____ in a competitive market

Shortage

When a shortage is eliminated the market:

Returns to equilibrium where the quantity supplied equals the quantity demanded

The quantity traded times the tax equals the tax

Revenue

An excise tax is a tax on

A good or service that depends on the units sold

When a tax is imposed on a market

Both producers and consumers are affected no matter who pays the tax

Rent control is an example of a price _______

Ceiling

A price floor will

Change the incentives that both buyers and sellers face.

The tax on a good or service that depends on the units sold, not the price of the food or service is called the _____ tax

Excise

Taxes paid by demanders help fund

Government services

A shortage persists when

Price is not allowed to adjust upward

Taxes are generally imposed to:

Raise revenue to fund government activities and discourage people from consuming a particular good or service

When there is a shortage in the market consumers tend to:

Reduce the quantity consumed

The quantity traded times the tax equals

The tax revenues from a tax

When both demand and supply change

We can always determine with confidence how price of quantity will change, but not both