Chapter 6 worksheet

the amount of the tax per unit is

$2.00

which of the following price floors would be binding in this market?

$6

A government-imposed price of $16 in this market could be an example of a

(ii) and (iii) only

how is the burden of a tax divided?

(iv) only

rent-control laws dictate

a maximum rent that landlords may charge tenants

which of the following statements is correct?

a price floor set at $6.50 would result in a surplus

which of the 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

Suppose buyers of fountain drinks are required to send $.50 to the government for every

all of the above

if a binding price ceiling is imposed on the baby formula market, then

all of the above are correct

rent control

all of the above are correct`

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

Suppose a price floor of $4 is imposed on this market. As a result,

buyers' total expenditure on the good decreases by $15

the price received by sellers in a market will decrease if the government

decreases a binding price ceiling in that market

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 $20 per ticket then the

demand curve will shift upward by $30 and the price paid by buyers will decrease by less than $30

if the gov removes a binding price ceiling from a market then the price paid by the buyers will

increase, and the quantity sold in the market will increase

The quantity sold in a market will increase if the government

more than one of the above is correct

which of the following is correct? price controls

often hurt those they are designed to help

A nonbinding price floor is shown in

panel (a) only

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

price floor

in 1990, congress passed a new luxury tax on items such as yachts, private airplanes, furs, jewelry, and expensive cars. The goal of the tax was to

raise revenue from the wealthy

Suppose D1 represents the demand curve for gasoline in both the short run and long run, S1 represents the supply curve for gasoline in the short run, and S2 represents the supply curve for gasoline in the long run. After the imposition of the $2

sellers bear a higher burden of the tax in the short run than in the long run

Which of the following is not correct?

the minimum wage is binding for workers with high skills and much experience

suppose a price floor of $8 is imposed on this market

the quantity of the good demanded decreases by 10 units

suppose a price ceiling of $5 is imposed on this market. As a result,

the quantity of the goof supplied decreases by 20 units

as the figure is drawn, who sends the tax payment to the government?

the sellers send the tax payment