Chapter 6 quiz
Refer to Figure 6-22. Buyers pay how much of the tax per unit?
$1.50.
Refer to Figure 6-26. The price paid by buyers after the tax is imposed is
$16.
Table 6-3The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market. Price QuantityDemanded QuantitySupplied $0 15 0 $1 13 3 $2 11 6 $3 9 9 $4 7 12 $5 5 15 $6 3 18 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 6-9. At which price would a price floor be nonbinding?
$6
Refer to Figure 6-21. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the government. Acme is left with how much money?
$8.00
Refer to Figure 6-6. Which of the following statements is correct?
A price floor set at $11 would result in a surplus.
Suppose the government has imposed a price ceiling on laptop computers. Which of the following events could transform the price ceiling from one that is not binding into one that is binding?
The number of firms selling laptop computers decreases.
A $1 per unit tax levied on consumers of a good is equivalent to
a $1 per unit tax levied on to producers of good.
Rent-control laws dictate
a maximum rent that landlords may charge tenants.
Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism?
a price ceiling set at $6
When the government imposes a binding price floor, it causes
a surplus of the good to develop.
Refer to Figure 6-32. Which of following statements is true based upon the conditions in the market?
a surplus will develop when a price floor is imposed at a price of $12.
A price floor will be binding only if it is set
above the equilibrium price.
When a tax is imposed in a market, it will
affect the behavior of both buyers and sellers.
Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30. The effect of this price ceiling would be
binding and cause a shortage of 50 units.
Refer to Figure 6-5. If the solid horizontal line on the graph represents a price floor, then the price floor is
binding and creates a surplus of 60 units of the good.
A binding minimum wage tends to
cause a labor surplus. cause unemployment. have the greatest impact in the market for teenage labor.
If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then a) the supply curve for mopeds shifts downward by $200. b) sellers of mopeds receive $200 less per moped than they were receiving before the tax. c) buyers of mopeds are unaffected by the tax. d) None of the above is correct.
d) none of the above
A tax on the buyers of sofas
decreases the size of the sofa market.
In a market with a binding price ceiling, an increase in the ceiling will ___ the quantity supplied, ____ the quantity demanded, and reduce the _____.
increase, decrease, shortage
The tax burden will fall most heavily on buyers of the good when the demand curve
is relatively steep, and the supply curve is relatively flat.
Minimum wage laws
may encourage some teenagers to drop out and take jobs.
Refer to Figure 6-5. Suppose the market is initially in equilibrium. Then the government imposes a price control, as represented by the solid horizontal line on the graph. If the price control is a price floor, then the price control
means that some firms will not be able to sell all that they want
Refer to Figure 6-33. Based upon the diagram,
more of the incidence of the tax is on sellers, since supply is more inelastic than demand.
Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?
slow replacement of old rental cars with newer ones
A $0.10 tax levied on the sellers of chocolate bars will cause the
supply curve for chocolate bars to shift up by $0.10.
When a good is taxed, the burden of the tax falls mainly on consumers if
supply is elastic, and demand is inelastic.
Which of the following would increase quantity supplied, decrease quantity demanded, and increase the price that consumers pay?
the imposition of a binding price floor
Which of the following would increase quantity supplied, increase quantity demanded, and decrease the price that consumers pay?
the repeal of a tax levied on producers
An outcome that can result from either a price ceiling or a price floor is
undesirable rationing mechanisms.