Midterm study Econ

Net exports equal

Y - (C + I + G)

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

and quantity both increase

Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

between $5 and $7

The Earned Income Tax Credit is an example of a

wage subsidy

A farmer sells five pounds of pecans to a Smith's Fresh Pecans for $10. Smith's Fresh Pecans resells three pounds for $4.50 per pound. The remaining pecans are shelled and canned and sold for a total of $8.00 Taking these transactions into account, how much is added to GDP?

$21.50

Refer to Table 6-3. Following the imposition of a price floor $2 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting market price is

$3

Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

$3.00

Refer to Figure 6-26. The effective price received by sellers after the tax is imposed is

$8

If a binding price floor is imposed on the video game market, then

All of the above are correct (the quantity of video games demanded will decrease, the quantity of video games supplied will increase, a surplus of video games will develop)

If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

Both the equilibrium price and quantity would decrease

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

Price will rise, and the effect on quantity is ambiguous

For a particular good, a 3 percent increase in price causes a 10 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?

There are many close substitutes for this good.

Minimum-wage laws dictate

a minimum wage that firms may pay workers

Refer to Table 4-12. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament and the country club sets the ticket price at $30, then there will be

a surplus of 300 tickets

Refer to Table 6-2. A price ceiling set at $5 will

be binding and will result in a shortage of 250 units

Suppose the demand for macaroni is inelastic, the supply of macaroni is elastic, the demand for cigarettes is inelastic, and the supply of cigarettes is elastic. If a tax were levied on the sellers of both of these commodities, we would expect that the burden of

both taxes would fall more heavily on the buyers than on the sellers

Price ceilings and price floors that are binding

cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price

Which of the following is an example of depreciation?

computers becoming obsolete

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely

decreased

When a tax is imposed on the buyers of a good, the demand curve shifts

downward by the amount of the tax

Holding all other forces constant, if increasing the price of a good leads to a decrease in total revenue, then the demand for the good must be

elastic

Congress intended that

half the FICA tax be paid by workers, and half be paid by firms.

Refer to Figure 6-13. If the government imposes a price ceiling of $6 on this market, then there will be

no shortage

A perfectly inelastic demand implies that buyers

purchase the same amount as before when the price rises or falls

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

shortage to exist and the market price of roses to increase

Which government entity computes U.S. GDP every three months?

the Department of Commerce