ch.6 micro

A tax on buyers causes which of the following?(i) a leftward shift of the demand curve(ii) a decrease in quantity sold(iii) an increase in the price buyers pay

(i), (ii), and (iii)

A tax on sellers causes which of the following?(i) a leftward shift of the supply curve(ii) a decrease in quantity sold(iii) an increase in the price buyers pay

(i),(ii),(iii)

After Scotland imposes the price floor on beer, there is a surplus of _____ billion cans of beer per year. Beer producers are willing to supply _____ billion cans of beers, while beer consumers only want to buy _____ billion cans of beer.

4; 17; 13

_____ requires you to buy or sell a minimum amount of a good.

A mandate

_____ is the burden of being assigned by the government to send a tax payment.

A statutory burden

_____ in weather emergencies might encourage consumers at the front of the queue to overbuy at normal prices.

Price ceilings

_____ sets a minimum or maximum quantity that can be sold.

Quantity regulation

_____ is a price regulation to set an upper limit on the amount that landlords can charge in monthly rent; this price is the _____ in the rental market

Rent control; price ceiling

_____ describes the division of the economic burden of a tax between consumers and producers.

Tax incidence

When a regulation is binding, which of the following is NOT true?

With a quota on buyers, the government limits the price and quantity people can buy

Which of the following is an example of a quantity quota?

a city enforces zoning laws that restrict the number of housing units

A subsidy is a:

a government payment designed to encourage particular purchases or productive activities.

A binding price ceiling is:

a price ceiling that prevents the market from reaching the market equilibrium price.

(Figure: Market for Sustainable Furniture) The graph depicts the market for furniture made from sustainable, man-made forests. The government wants to encourage buyers to buy such furniture and imposes a price ceiling of $250. What occurs as a result of the price ceiling?

a shortage of 400,000 pieces of furniture

If the government guarantees sugar farmers a price of $1 per pound when the market equilibrium price is actually $0.50 per pound, which of the following will occur?

a shortage of sugar will occur, increasing inefficiency

A binding price floor is:

always above the equilibrium price.

Suppose that the city of Rentville sets a price ceiling of $800 a month on all apartments, although the market equilibrium rent is $1,000. Which of the following is least likely to occur?

an increase in the quantity of existing apartments in Rentville

The economic burden of a tax is the:

burden created by the change in after-tax prices faced by buyers and sellers

An economic burden is the burden created by the change in after-tax prices faced by _____ as a result of the tax.

buyers and sellers

Government policy can shape the most personal of decisions, such as whether to get married and how many kids to have, by:

changing their costs and benefits.

In 2016, Amazon began charging a 5.75% sales tax on products it sells in the District of Columbia. Holding all else constant, the effect of this tax would be to _____ in the District of Columbia.

decrease Amazon sales

Tax incidence depends on the price elasticity of:

demand and supply.

A subsidy for buyers of a product shifts the

demand curve to the right.

Buyers bear a smaller incidence of the tax when:

demand is more elastic than supply

Suppose the government sets the maximum price for a normal doctor's visit at $20, but the current market price is $40. As a result of this government action, doctors will see:

fewer patients

The statutory burden of a tax is the

government-designated burden of a tax payment.

Quantity regulations for _____ effectively limit the supply of workers.

immigration quotas

What should the government do in order to reduce the effects of a shortage caused by a price ceiling?

it would raise the price ceiling

When the price elasticity of supply is _____ relative to the price elasticity of demand, then _____ bear a smaller share of the economic burden.

large; sellers

Governments impose quotas to _____, which can be applied to _____.

limit the quantity sold; both buyers and sellers

Price ceilings _____ prices and cause _____.

lower; shortages

Quotas set a limit on the:

maximum quantity of a good that can be sold

A quantity regulation is a:

minimum or maximum quantity that can be sold

A binding price ceiling can lead to all of the following EXCEPT:

more quantity supplied.

If a new tax on sellers of $500 per automobile is introduced, equilibrium occurs at the point where the _____ curve meets the _____ curve.

new supply; demand

When a government introduces a new tax on sellers, equilibrium occurs at the point where the _____ curve meets the _____ curve.

new supply; demand

Those who argue to allow price gouging point out that anti-gouging laws are a form of a _____

price ceiling

which of the following are price ceilings

price controls on prescription drugs and rent control

A _____ does two things: it raises prices, and it lowers the quantity sold.

price floor

When _____ is set below the equilibrium price, it doesn't have any effect.

price floor

Cities and suburbs that apply zoning laws have less housing and higher house prices because the laws effectively impose a:

quota, limiting the number of housing units that can be built.

In 2017, eBay started charging a 20% value-added tax on fees charged to small businesses in the United Kingdom. Holding all else constant, this would _____ in the United Kingdom.

raise the prices that eBay sellers charge their customers

Governments typically set minimum wages in order to _____ the wages received by the lowest-wage workers. The fact that the quantity _____ declines is an undesirable side effect.

raise; demanded

Critics of anti-gouging laws argue that allowing prices to _____ will lead to an increase in the quantity _____, even during a natural disaster.

rise; supplied

price ceilings create ____ if they are set____ equilibrium price

shortages; below

A tax on sellers shifts the:

supply curve to the left

Quotas set by the government limit taxis in many cities. A quota that restricts _____ leads to higher prices and a _____ quantity sold.

supply; lower

A binding price floor in a market is removed. Which of the following is likely to occur as a result?

the market price will fall

A price ceiling is:

the maximum price that a seller can charge in a market.

If the market equilibrium wage for entry-level fast-food workers is $10 an hour, while the minimum wage is $8, what impact does the minimum wage have in this industry?

the minimum wage has no effect in the market