econ quiz 6
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A price floor is binding when it is set
above the equilibrium price, causing a surplus.
A price floor will be binding only if it is set
above the equilibrium price.
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 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 imposed on the sellers 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 payroll tax is a
tax on the wages that firms pay their workers.