MICROECONOMICs (CHP.6)

If the government levies a $500 tax per car on buyers of cars, then the price paid by buyers of cars would

A. increase by less than $500.

If the government removes a tax on buyers of a good and imposes the same tax on sellers of the good, then the price paid by buyers will

A. not change and the price received by sellers will not change.

A tax imposed on the buyers of a good will

A. raise the price paid by buyers and lower the equilibrium quantity.

If a price floor is not binding, then

A. the equilibrium price is above the price floor.

When a tax is imposed on the sellers of a good, the supply curve shifts

A. upward by the amount of the tax.

A price floor will be binding only if it is set

B. above the equilibrium price.

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

D. None of the above is correct.

When a tax is placed on the buyers of lemonade,

D. the burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal.

If a price ceiling is not binding, then

D. there will be no effect on the market price or quantity sold.

Suppose buyers of liquor are required to send $1.00 to the government for every bottle of liquor they buy. Further, suppose this tax causes the effective price received by sellers of liquor to fall by $0.80 per bottle. Which of the following statements is correct?

This tax causes the demand curve for liquor to shift downward by $1.00 at each quantity of liquor. The price paid by buyers is $0.20 per bottle more than it was before the tax. Eighty percent of the burden of the tax falls on sellers.

A legal maximum on the price at which a good can be sold is called a price

ceiling

A legal minimum on the price at which a good can be sold is called a price

B. floor.

Over time, housing shortages caused by rent control

B. increase, because the demand for and supply of housing are more elastic in the long run.

The imposition of a binding price floor on a market causes quantity demanded to be

B. less than quantity supplied.

In the housing market, rent control causes

B. quantity supplied to fall and quantity demanded to rise.

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then

B. the demand curve will shift upward by $20, and the effective price received by sellers will increase by less than $20.

If the minimum wage exceeds the equilibrium wage, then

B. the quantity supplied of labor will exceed the quantity demanded.

If a tax is levied on the buyers of a product, then the demand curve

B. will shift down.

If a binding price ceiling is imposed on the computer market, then

C. a shortage of computers will develop.

Which of the following causes the price paid by buyers to be different than the price received by sellers?

C. a tax on the good

A price ceiling will be binding only if it is set

C. below the equilibrium price.

When a binding price ceiling is imposed on a market to benefit buyers,

C. some buyers benefit and some buyers are harmed.

An example of a price floor is

C. the minimum wage.

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,

C. the quantity demanded of physicals increases and the quantity supplied of physicals decreases.

When a tax is placed on the sellers of cell phones,

C. the size of the cell phone market decreases, but the price paid by buyers increases.