Ch 6

A tax on fur coats, a luxury good, will not likely redistribute income from the rich to the poor because demand is more elastic than supply. True False

True

https://cxp-cdn.cengage.info/protected/prod/assets/35/2/35277c6f-b98a-4a40-bb8b-b3a6d184604f.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2f35%2f2%2f35277c6f-b98a-4a40-bb8b-b3a6d184604f.png*~hmac=5faf53408fa841a4cc7a470b18a4308cf87de170a02bbb07db81ab2f720da119 Refer to the Figure. The effective price that sellers receive after the tax is imposed is a.$11. b.$14. c.the same price that they received before the tax was imposed. d.$18.

a.$11.

https://cxp-cdn.cengage.info/protected/prod/assets/35/2/35277c6f-b98a-4a40-bb8b-b3a6d184604f.png?__gda__=st=1618816761~exp=1619421561~acl=%2fprotected%2fprod%2fassets%2f35%2f2%2f35277c6f-b98a-4a40-bb8b-b3a6d184604f.png*~hmac=34a7fd17c490f325ab9e6418d2e4c8daac9edc7ea25239011c2e8633cd64b6f0 Refer to the Figure. The per-unit burden of the tax on sellers is a.$3. b.$4. c.$7. d.$6.

a.$3.

https://cxp-cdn.cengage.info/protected/prod/assets/c4/e/c4ef94b1-8393-4775-b511-3db536a368bf.png?__gda__=st=1618816761~exp=1619421561~acl=%2fprotected%2fprod%2fassets%2fc4%2fe%2fc4ef94b1-8393-4775-b511-3db536a368bf.png*~hmac=d1171c2335ea66f144c39287463ce654827ca0241339249fce45f325e913667e Refer to the Figure. Which of the following price ceilings would be binding in this market? a.$6 b.$8 c.It is not possible to create a binding price ceiling in this market. d.$10

a.$6

Suppose that a $3.00 tax per pack is imposed on cigarettes, for which the demand is relatively inelastic and the supply is relatively elastic. Which of the following best describes the relative tax incidence? a.The price buyers pay increases by more than $1.50 and the price sellers receive decreases by less than $1.50. b.The price buyers pay increases by less than $1.50 and the price sellers receive decreases by more than $1.50. c.The price buyers pay increases by $1.50 and the price sellers receive decreases by $1.50. d.The price buyers pay increases $3 and the price sellers receive does not change.

a.The price buyers pay increases by more than $1.50 and the price sellers receive decreases by less than $1.50.

A policy to help the poor that would not reduce the quantity of housing supplied is a.a subsidy from the government to offset a portion of a poor family's rent. b.a price ceiling on the rental amounts that landlords can charge. c.an increase in mortgage interest rates for multi-family homes. d.new property taxes on real estate owned by landlords.

a.a subsidy from the government to offset a portion of a poor family's rent.

https://cxp-cdn.cengage.info/protected/prod/assets/7f/b/7fbc5fcb-e942-458b-9c89-a7525bc2a1da.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2f7f%2fb%2f7fbc5fcb-e942-458b-9c89-a7525bc2a1da.png*~hmac=eafec13e77b42986b1ba0f05e97260e2fb8610a58660044480ed853f3ee17065 Refer to the Table. A price floor set at $4 will a.be binding and will result in a surplus of 6 units. b.be binding and will result in a surplus of 9 units. c.not be binding. d.be binding and will result in a surplus of 12 units.

a.be binding and will result in a surplus of 6 units.

If the market price of 60-inch flat-screen TVs is $1,200 and the government imposes a price control setting the price at $1,000, this price control could be a a.binding price ceiling or a nonbinding price floor. b.nonbinding price ceiling or a binding price floor. c.binding price ceiling or a binding price floor. d.nonbinding price ceiling or a nonbinding price floor.

a.binding price ceiling or a nonbinding price floor.

https://cxp-cdn.cengage.info/protected/prod/assets/7b/1/7b134d9a-4260-4904-a71f-2d77ba21c876.png?__gda__=st=1618816761~exp=1619421561~acl=%2fprotected%2fprod%2fassets%2f7b%2f1%2f7b134d9a-4260-4904-a71f-2d77ba21c876.png*~hmac=4262a6ea3d6a8a114b6948ee21d6216f58dd48cbb9b70b0c415459a55c7876b8 Refer to the Figure. A government-imposed price of $12 in this market is an example of a a.binding price ceiling that creates a shortage. b.non-binding price ceiling that creates a shortage. c.non-binding price floor that creates a surplus. d.binding price floor that creates a surplus.

a.binding price ceiling that creates a shortage.

A $15.00 tax levied on the sellers of car batteries will a.cause the supply curve for car batteries to shift to the left by $15.00. b.cause the supply curve for car batteries to shift to the right by $15.00. c.not cause any shift in the demand or supply curves for car batteries because car batteries are a necessity. d.cause the demand curve for car batteries to shift to the left by $15.00.

a.cause the supply curve for car batteries to shift to the left by $15.00.

Before OPEC raised the price of crude oil in the 1970s, the price a.ceilingon gasoline was not binding, but it became binding and caused a shortage when the supply of gasoline decreased. b.ceiling on gasoline was binding, but it became nonbinding and caused a shortage when the supply of gasoline decreased. c.floor on gasoline was not binding, but it became binding and caused a surplus when the supply of gasoline decreased. d.floor on gasoline was binding, but it became nonbinding and resulted in equilibrium when the supply of gasoline decreased.

a.ceilingon gasoline was not binding, but it became binding and caused a shortage when the supply of gasoline decreased.

A binding price ceiling a.forces the price lower than the market price. b.sets the price equal to the market price. c.forces the price higher than the market price. d.restricts the price such that sellers are price makers and buyers are price takers.

a.forces the price lower than the market price.

Suppose that the demand for toilet paper is highly inelastic, and the supply of toilet paper is highly elastic. A tax of $0.10 per roll levied on toilet paper will decrease the effective price received by sellers of toilet paper by a.less than $0.05. b.$0.05. c.$0.10. d.between $0.05 and $0.10.

a.less than $0.05.

https://cxp-cdn.cengage.info/protected/prod/assets/c4/e/c4ef94b1-8393-4775-b511-3db536a368bf.png?__gda__=st=1618816761~exp=1619421561~acl=%2fprotected%2fprod%2fassets%2fc4%2fe%2fc4ef94b1-8393-4775-b511-3db536a368bf.png*~hmac=d1171c2335ea66f144c39287463ce654827ca0241339249fce45f325e913667e Refer to the Figure. If the government imposes a price ceiling of $10 on this market, then there will be a.no shortage. b.a shortage of 10 units. c.a shortage of 40 units. d.a shortage of 20 units.

a.no shortage.

If the government removes a $4 tax on buyers of restaurant meals and imposes the same $4 tax on sellers of restaurant meals, then the price paid by buyers will a.not change, and the price received by sellers will not change. b.not change, and the price received by sellers will decrease. c.decrease, and the price received by sellers will decrease. d.decrease, and the price received by sellers will not change.

a.not change, and the price received by sellers will not change.

If the market price of T-shirts is $10 and the government imposes a price ceiling at $12, the market will a.reach the equilibrium and the price ceiling is not binding. b.have a shortage of T-shirts and the price ceiling is binding. c.have a surplus of T-shirts and the price ceiling is binding. d.reach the equilibrium and the price ceiling is binding.

a.reach the equilibrium and the price ceiling is not binding.

When OPEC raised the price of crude oil in the 1970s, it caused a a.shortage of gasoline as the nonbinding price ceiling became binding. b.surplus of gasoline as the nonbinding price ceiling became binding. c.surplus of gasoline as the nonbinding price floor became binding. d.shortage of gasoline as the nonbinding price floor became binding.

a.shortage of gasoline as the nonbinding price ceiling became binding.

Most labor economists believe workers, rather than firms, bear most of the burden of the payroll tax because the a.supply of labor is less elastic than the demand for labor. b.supply of labor is more elastic than the demand for labor. c.government mandated that workers pay a greater share of the payroll tax. d.supply and demand for labor are equally elastic.

a.supply of labor is less elastic than the demand for labor.

Although lawmakers legislated a fifty-fifty division of the payment of the FICA tax, a.the burden of the tax is dictated by the relative elasticities of supply and demand rather than the legislated tax incidence. b.the burden of the tax is dictated by the magnitude of the tax rather than the legislated tax incidence. c.only the president can dictate the relative burdens of a tax. d.firms actually bear a much greater burden of the tax than workers do.

a.the burden of the tax is dictated by the relative elasticities of supply and demand rather than the legislated tax incidence.

If the government removes a binding price ceiling in the market for gasoline, then a.the price of gasoline will increase, and the quantity of gasoline sold will increase. b.the price of gasoline will decrease, and the quantity of gasoline sold will increase. c.the buyers will pay more, the sellers will receive less and the quantity will decrease. d.there will be no change in the price and quantity of gasoline.

a.the price of gasoline will increase, and the quantity of gasoline sold will increase.

https://cxp-cdn.cengage.info/protected/prod/assets/60/3/6032550a-6f06-4308-9ff1-55fcccffab05.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2f60%2f3%2f6032550a-6f06-4308-9ff1-55fcccffab05.png*~hmac=6fb2b1e67d0bd93a10defc1df1f53154de46404fc16fdd04be9fdd217b389d51 Refer to the Figure. XYZ, Inc. is a seller of the good. XYZ sells a unit of the good to a buyer and then pays the tax on that unit to the government. XYZ is left with how much money? a.$1.00 b.$2.00 c.$5.00 d.$3.00

b.$2.00

https://cxp-cdn.cengage.info/protected/prod/assets/60/3/6032550a-6f06-4308-9ff1-55fcccffab05.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2f60%2f3%2f6032550a-6f06-4308-9ff1-55fcccffab05.png*~hmac=6fb2b1e67d0bd93a10defc1df1f53154de46404fc16fdd04be9fdd217b389d51 Refer to the Figure. In the after-tax equilibrium, how much revenue does the government collect from the tax on this good? a.$160 b.$240 c.$400 d.$360

b.$240

https://cxp-cdn.cengage.info/protected/prod/assets/35/2/35277c6f-b98a-4a40-bb8b-b3a6d184604f.png?__gda__=st=1618816761~exp=1619421561~acl=%2fprotected%2fprod%2fassets%2f35%2f2%2f35277c6f-b98a-4a40-bb8b-b3a6d184604f.png*~hmac=34a7fd17c490f325ab9e6418d2e4c8daac9edc7ea25239011c2e8633cd64b6f0 Refer to the Figure. The per-unit burden of the tax on buyers is a.$3. b.$4. c.$7. d.$6.

b.$4.

After a tax is imposed on the market for bottled water, the price buyers pay is $2.50 per bottle and the price sellers receive is $1.75. If the equilibrium price was $2.00 before the tax was imposed on the market, what can you conclude about the relative elasticities of demand and supply? a.Demand is more elastic than supply. b.Supply is more elastic than demand. c.The elasticities of demand and supply are equal. d.We need to know whether the tax is collected from the buyers or sellers to conclude anything about the relative elasticities of demand and supply.

b.Supply is more elastic than demand.

A government-mandated minimum price that is set above the market equilibrium price is a a.nonbinding price floor that results in an equilibrium quantity. b.binding price floor that results in a surplus. c.nonbinding price ceiling that results in an equilibrium quantity. d.binding price ceiling that results in a shortage.

b.binding price floor that results in a surplus.

A tax on the sellers of chocolate a.increases the amount of chocolate that will be bought and sold. b.decreases the amount of chocolate that will be bought and sold. c.may increase, decrease, or have no effect on the amount of chocolate that will be bought and sold. d.has no effect on the amount of chocolate that will be bought and sold.

b.decreases the amount of chocolate that will be bought and sold.

When a tax is placed on the buyers of hockey skates, the size of the hockey skate market a.and the price paid by buyers both decrease. b.decreases, but the price paid by buyers increases. c.and the price paid by buyers both increase. d.increases, but the price paid by buyers decreases.

b.decreases, but the price paid by buyers increases.

A payroll tax has the effect of a.increasing the wages paid by firms and received by workers. b.increasing the wages paid by firms and decreasing the wages received by workers. c.decreasing the wages paid by firms and increasing the wages received by workers. d.decreasing the wages paid by firms and received by workers.

b.increasing the wages paid by firms and decreasing the wages received by workers.

Suppose that in a particular market, the supply curve is relatively inelastic and the demand curve is relatively elastic. If a tax is imposed in this market, then the a.buyers will bear a greater burden of the tax than the sellers. b.sellers will bear a greater burden of the tax than the buyers. c.size of the market will increase. d.size of the market will not change.

b.sellers will bear a greater burden of the tax than the buyers.

When policymakers impose a luxury tax on buyers of a good, a.they are successful in redistributing income from the rich to the poor. b.they are not successful in redistributing income from the rich to the poor. c.the burden of the tax falls more heavily on the buyers of the good than on the sellers. d.the supply curve shifts to the left.

b.they are not successful in redistributing income from the rich to the poor.

https://cxp-cdn.cengage.info/protected/prod/assets/60/3/6032550a-6f06-4308-9ff1-55fcccffab05.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2f60%2f3%2f6032550a-6f06-4308-9ff1-55fcccffab05.png*~hmac=6fb2b1e67d0bd93a10defc1df1f53154de46404fc16fdd04be9fdd217b389d51 Refer to the Figure. How is the burden of the tax shared between buyers and sellers? Buyers bear a.one-third of the burden, and sellers bear two-thirds of the burden. b.two-thirds of the burden, and sellers bear one-third of the burden. c.all of the burden, and sellers bear none of the burden. d.one-half of the burden, and sellers bear one-half of the burden.

b.two-thirds of the burden, and sellers bear one-third of the burden.

After a tax is imposed on the buyers of bottled water, the price buyers pay is $2.50 per bottle and the price sellers receive is $1.75. If the equilibrium price was $2.00 before the tax was imposed on the market, how much is the tax per unit? a.$0.25 b.$0.50 c.$0.75 d.$1.00

c.$0.75

https://cxp-cdn.cengage.info/protected/prod/assets/c4/e/c4ef94b1-8393-4775-b511-3db536a368bf.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2fc4%2fe%2fc4ef94b1-8393-4775-b511-3db536a368bf.png*~hmac=00c89abdd1b40f56a87e1073efb9bb58db4f5cbe7aa5646569f4f494b406294b Refer to the Figure. Which of the following price floors would be binding in this market? a.It is not possible to create a binding price floor in this market. b.$6 c.$10 d.$8

c.$10

https://cxp-cdn.cengage.info/protected/prod/assets/35/2/35277c6f-b98a-4a40-bb8b-b3a6d184604f.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2f35%2f2%2f35277c6f-b98a-4a40-bb8b-b3a6d184604f.png*~hmac=5faf53408fa841a4cc7a470b18a4308cf87de170a02bbb07db81ab2f720da119 Refer to the Figure. The amount of the tax per unit is a.$3. b.$4. c.$7. d.$6.

c.$7.

https://cxp-cdn.cengage.info/protected/prod/assets/7f/b/7fbc5fcb-e942-458b-9c89-a7525bc2a1da.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2f7f%2fb%2f7fbc5fcb-e942-458b-9c89-a7525bc2a1da.png*~hmac=eafec13e77b42986b1ba0f05e97260e2fb8610a58660044480ed853f3ee17065 Refer to the Table. Suppose the government imposes a price floor of $5 on this market. What will be the size of the surplus in this market? a.0 units b.3 units c.12 units d.6 units

c.12 units

https://cxp-cdn.cengage.info/protected/prod/assets/c4/e/c4ef94b1-8393-4775-b511-3db536a368bf.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2fc4%2fe%2fc4ef94b1-8393-4775-b511-3db536a368bf.png*~hmac=00c89abdd1b40f56a87e1073efb9bb58db4f5cbe7aa5646569f4f494b406294b Refer to the Figure. Which of the following statements is correct? a.A price ceiling set at $10 would be binding, but a price ceiling set at $6 would not be binding. b.A price floor set at $6 would be binding, but a price floor set at $8 would not be binding. c.A price floor set at $9 would result in a surplus. d.A price ceiling set at $9 would result in a surplus.

c.A price floor set at $9 would result in a surplus.

Suppose sellers of gasoline are required to send $0.50 to the government for every gallon of gasoline they sell. Further, suppose this tax causes the price paid by buyers of gasoline to rise by $0.40 per gallon. Which of the following statements is correct? a.The effective price received by sellers is $0.40 per gallon less than it was before the tax. b.Ten percent of the burden of the tax falls on sellers. c.Demand is relatively inelastic compared to supply of gasoline. d.This tax causes the demand curve for gasoline to shift downward by $0.50 at each quantity of gasoline.

c.Demand is relatively inelastic compared to supply of gasoline.

Suppose the government has imposed a price ceiling on textbooks. Which of the following events could transform the price ceiling from one that is not binding into one that is binding? a.Textbook authors agree to lower salaries. b.The price of paper, an input into textbook production, decreases. c.The number of students buying textbooks increases. d.The price of electronic books, a substitute for textbooks, decreases.

c.The number of students buying textbooks increases.

https://cxp-cdn.cengage.info/protected/prod/assets/c4/e/c4ef94b1-8393-4775-b511-3db536a368bf.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2fc4%2fe%2fc4ef94b1-8393-4775-b511-3db536a368bf.png*~hmac=00c89abdd1b40f56a87e1073efb9bb58db4f5cbe7aa5646569f4f494b406294b Refer to the Figure. In which of the following cases would the market price serve as a rationing mechanism? a.a price ceiling set at $4 b.a price ceiling set at $6 c.a price floor set at $6 d.a price floor set at $10

c.a price floor set at $6

A binding minimum wage a.alters both the demand for and supply of labor. b.affects only the demand for labor; it does not affect the supply of labor. c.alters both the quantity demanded of labor and the quantity supplied of labor. d.affects only the supply of labor; it does not affect the demand for labor.

c.alters both the quantity demanded of labor and the quantity supplied of labor.

https://cxp-cdn.cengage.info/protected/prod/assets/49/5/495b12fd-6666-4c8c-b9f4-3e572c482ccf.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2f49%2f5%2f495b12fd-6666-4c8c-b9f4-3e572c482ccf.png*~hmac=9cad08fb8b7c8f593fe9edbc7beaa252df3ff445bc3ff2315895fdfa15ff5a07 Refer to the Figure. A price ceiling set at $4 causes quantity a.supplied to exceed quantity demanded by 20 units. b.supplied to exceed quantity demanded by 30 units. c.demanded to exceed quantity supplied by 20 units. d.demanded to exceed quantity supplied by 30 unit

c.demanded to exceed quantity supplied by 20 units.

If the equilibrium wage exceeds the minimum wage, then a.the actual quantity demanded of labor will be less than the equilibrium quantity. b.the actual quantity supplied of labor will exceed the equilibrium quantity. c.there will be no unemployment. d.the minimum wage will be binding.

c.there will be no unemployment.

Refer to the Figure. The price that buyers pay after the tax is imposed is a.$11. b.$14. c.the same price that they paid before the tax was imposed. d.$18.

d.$18.

https://cxp-cdn.cengage.info/protected/prod/assets/60/3/6032550a-6f06-4308-9ff1-55fcccffab05.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2f60%2f3%2f6032550a-6f06-4308-9ff1-55fcccffab05.png*~hmac=6fb2b1e67d0bd93a10defc1df1f53154de46404fc16fdd04be9fdd217b389d51 Refer to the Figure. What is the amount of the tax per unit? a.$1 b.$2 c.$5 d.$3

d.$3

https://cxp-cdn.cengage.info/protected/prod/assets/7f/b/7fbc5fcb-e942-458b-9c89-a7525bc2a1da.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2f7f%2fb%2f7fbc5fcb-e942-458b-9c89-a7525bc2a1da.png*~hmac=eafec13e77b42986b1ba0f05e97260e2fb8610a58660044480ed853f3ee17065 Refer to the Table. Suppose the government imposes a price ceiling of $2 on this market. What will be the size of the shortage in this market? a.0 units b.3 units c.12 units d.6 units

d.6 units

Suppose the government has imposed a price floor on cheese. Which of the following events could transform the price floor from one that is binding to one that is not binding? a.Consumption of cheese is found to cause cancer. b.New technology makes the production of cheese cheaper. c.The price of crackers, a complement to cheese, increases. d.A bovine disease affects half of the cow population resulting in a higher price for milk.

d.A bovine disease affects half of the cow population resulting in a higher price for milk.

Which of the following is not a likely statement regarding the imposition of a binding price floor on the market for cigarettes? a.Policymakers wish to reduce the quantity demanded of cigarettes due to the health hazards from smoking them. b.Policymakers are not satisfied with the market price of cigarettes due to health hazards from smoking them. c.Sellers of cigarettes have pressured policymakers into imposing the price floor. d.Buyers of cigarettes have pressured policymakers into imposing the price floor.

d.Buyers of cigarettes have pressured policymakers into imposing the price floor.

When a binding price floor is imposed, which of the following statements is true? a.The quantity demanded exceeds the quantity supplied, resulting in a shortage. b.The quantity demanded exceeds the quantity supplied, resulting in a surplus. c.The quantity supplied exceeds the quantity demanded, resulting in a shortage. d.The quantity supplied exceeds the quantity demanded, resulting in a surplus.

d.The quantity supplied exceeds the quantity demanded, resulting in a surplus.

https://cxp-cdn.cengage.info/protected/prod/assets/c4/e/c4ef94b1-8393-4775-b511-3db536a368bf.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2fc4%2fe%2fc4ef94b1-8393-4775-b511-3db536a368bf.png*~hmac=00c89abdd1b40f56a87e1073efb9bb58db4f5cbe7aa5646569f4f494b406294b Refer to the Figure. If the government imposes a price ceiling of $6 on this market, then there will be a.no shortage. b.a shortage of 10 units. c.a shortage of 40 units. d.a shortage of 20 units.

d.a shortage of 20 units.

Suppose the government wants to encourage Americans to eat healthier, so it imposes binding price ceilings on the markets for fresh vegetables. As a result, a.the demand for fresh vegetables will increase. b.the supply of fresh vegetables will decrease. c.a surplus of fresh vegetables will develop. d.a shortage of fresh vegetables will develop.

d.a shortage of fresh vegetables will develop.

If a binding price floor is imposed on the market for carrots, then a.the demand for carrots will decrease. b.the supply of carrots will increase. c.a shortage of carrots will develop. d.a surplus of carrots will develop.

d.a surplus of carrots will develop.

A government-mandated maximum price that is set below the market equilibrium price is a a.nonbinding price floor that results in an equilibrium quantity. b.binding price floor that results in a surplus. c.nonbinding price ceiling that results in an equilibrium quantity. d.binding price ceiling that results in a shortage.

d.binding price ceiling that results in a shortage.

https://cxp-cdn.cengage.info/protected/prod/assets/7b/1/7b134d9a-4260-4904-a71f-2d77ba21c876.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2f7b%2f1%2f7b134d9a-4260-4904-a71f-2d77ba21c876.png*~hmac=6f2d355761cd41438950f94258baa8beab254498a389b43bcb57de14220ae82e Refer to the Figure. A government-imposed price of $24 in this market is an example of a a.binding price ceiling that creates a shortage. b.non-binding price ceiling that creates a shortage. c.non-binding price floor that creates a surplus. d.binding price floor that creates a surplus.

d.binding price floor that creates a surplus.

Rent control is an example of a price a.floor; in cities with rent control prices are used to ration housing. b.floor; in cities with rent control mechanisms other than price are used to ration housing. c.ceiling; in cities with rent control prices are used to ration housing. d.ceiling; in cities with rent control mechanisms other than price are used to ration housing.

d.ceiling; in cities with rent control mechanisms other than price are used to ration housing.

Rent control is a.likely to cause a large shortage of housing in the short run, but a small shortage in the long run. b.likely to cause a small shortage of housing in both the short run and the long run. c.considered to be an efficient way to help the poor raise their standard of living. d.considered to be an inefficient way to help the poor raise their standard of living.

d.considered to be an inefficient way to help the poor raise their standard of living.

If the market price of burgers is $8 and the government sets a legal minimum at $9, the government has imposed a price a.ceiling that is not binding. b.ceiling that is binding. c.floor that is not binding. d.floor that is binding.

d.floor that is binding.

If the government levies a $10 tax per designer handbag, then the price paid by buyers of designer handbags would a.increase by more than $10. b.increase by exactly $10. c.decrease by an indeterminate amount. d.increase by less than $10.

d.increase by less than $10.

The Earned Income Tax Credit is a a.policy to eliminate a price floor on basic goods needed by all households. b.policy to institute a price ceiling on basic goods needed by all households. c.tax credit given to high income families to incentivize hard work. d.method of raising living standards of the working poor without creating unemployment.

d.method of raising living standards of the working poor without creating unemployment.

https://cxp-cdn.cengage.info/protected/prod/assets/49/5/495b12fd-6666-4c8c-b9f4-3e572c482ccf.png?__gda__=st=1618816873~exp=1619421673~acl=%2fprotected%2fprod%2fassets%2f49%2f5%2f495b12fd-6666-4c8c-b9f4-3e572c482ccf.png*~hmac=9cad08fb8b7c8f593fe9edbc7beaa252df3ff445bc3ff2315895fdfa15ff5a07 Refer to the Figure. A price ceiling at $4.00 causes a a.surplus of 20 units. b.surplus of 30 units. c.shortage of 10 units. d.shortage of 20 units.

d.shortage of 20 units.

Which of the following is correct? Price controls often help a.all of those they are designed to help. b.none of those they are designed to help. c.people other than those they are designed to help. d.some of those they are designed to help.

d.some of those they are designed to help.

Consider the market for electricity. Buyers a.and sellers would lobby for a price ceiling. b.and sellers would lobby for a price floor. c.would lobby for a price floor, whereas sellers would lobby for a price ceiling. d.would lobby for a price ceiling, whereas sellers would lobby for a price floor.

d.would lobby for a price ceiling, whereas sellers would lobby for a price floor.