Pop Up Quiz 3

The amount of the tax per unit is

$14

What is the amount of the tax per unit?

$4

Which of the following statements is not correct?

A government-imposed price of $25 would be a binding price ceiling if market demand is either Demand Aor Demand B.

Suppose sellers of cologne are required to send $1.50 to the government for every bottle of cologne they sell.Further, suppose this tax causes the price paid by buyers of cologne to rise by $0.90 per bottle. Which of the following statements is correct?

The effective price received by sellers is $0.60 per bottle less than it was before the tax.

Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

between 60 units and 100 units

If the government removes a binding price floor from a market, then the price paid by buyers will

decrease, and the quantity sold in the market will increase.

Suppose the government imposes a 50-cent tax on the sellers of packets of chewing gum. The tax would

discourage market activity

In which market will the majority of the tax burden fall on buyers?

graph (b) only (more of an inelastic demand)

The price ceiling shown in graph (a)

is not binding

Minimum-wage laws dictate

only a minimum wage that firms may pay workers

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, the

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