Econ 2303 - Chapter 6
A price ceiling is
A legal maximum on the price at which a good can be sold
Price ceiling
A legal maximum on the price at which a good can be sold
Rent control
Serves as an example of a price ceiling.
A government imposed price of $12 in this market is an example of a
binding price floor that creates a surplus.
Under rent control, bribery is a potential mechanism to
bring the total price of an apartment (including the bribe) closer to the equilibrium price.
If a tax is levied on sellers of a product, then the demand curve will
not shift
The imposition of a binding price ceiling on a market causes
quantity demanded to be greater than quantity supplied.
The term tax incidence refers to
the distribution of the tax burden between buyers and sellers
Tax incidence
the manner in which the burden of a tax is shared among participants in a market
If a price ceiling is not binding, then
there will be no effect on the market price or quantity sold.
Price floor
A legal minimum on the price at which a good can be sold
Suppose the government wants to encourage Americans to exercise more, comma so it imposes a binding price ceiling on the market for inhome treadmills. As a result,
A shortage of treadmills will develop.
Suppose the detax is placed on books. If the buyers pay the majority of the tax, then we know that the
Demand is more inelastic than the supply.
A $1.39 tax levied on the buyers of elderberry juice will shift the demand card
Download by exactly $1.39.
If the government wants to reduce the burning of fossil fuels, it should impose a tax on
Either buyers or sellers of gasoline.
If the government Levy's is $700 tax per motorcycle on sellers of motorcycles, then the price paid by buyers of motorcycles would
Increase by less than $700.
The price ceiling
Makes it necessary for sellers to ration the good using a mechanism other than price.
When attacks is placed on the sellers of a product, buyers pay
More, and sellers received less than they did before the tax.
The presence of a price control in a market for a good or service usually is an indication that
Policy holders believe that the price that prevailed in the market in the absence of praise controls was unfair to buyers or sellers.
Suppose the equilibrium price of a stick of deodorant is $4, $4, and the government imposes a price floor of $5 per stick. As a result of the price floor, the
Quantity demanded of deodorant's decreases, and the quantity of deodorant that firms want to supply increases.
The federal government uses the revenue from the FICA (federal insurance contribution act) tax to pay for
Social security and medicare.
In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that
The US government maintained a price ceiling on gasoline.
Suppose sellers of Cologne are required to send a $50 to the government for every bottle of Cologne they sell. Further, it further, suppose this tax causes the price paid by buyers of Cologne to rise by 90 cents per bottle. Which of the following statements is correct?
The effective price received by sellers is 60 cents per bottle less than it was before the tax
Suppose buyers, rather than sellers, were required to pay this tax (in the same amount per unit as shown in the graph). Relative to the tax on sellers, the tax on buyers would result in
The same amount of tax revenue for the government.
Aren't income tax credit karma a government program that supplements the income of low wage workers, is an example of a
Wage subsidy.
Which of the following statements is not correct?
When the price is $6, there is a surplus of 8 units.
Under rent control, landlords can cease to be responsive to tenants concerns about the quality of the housing because
With shortages and waiting lists, they have no incentive to maintain and improve their property.