Econ 201 Ch 6 Assessment

The graph below shows Scotland's price floor on beer. What is the price floor? 13 billion cans 17 billion cans $1.50 per can $1.00 per can

$1.50 per can

The graph below illustrates the consequences of housing quotas in Seattle, showing the demand and supply curves for housing. Suppliers are willing to sell the maximum quantity of houses imposed by laws if the price is at least _____. $200,000 $200 $600,000 $400,000

$200,000

The graph below illustrates the consequences of housing quotas in Seattle, showing the demand and supply curves for housing. Due to zoning laws, homeowners in Seattle can now sell their houses for _____ more than they could without the laws where prices rose from _____ without the quota to $600,000 with the quota. $400,000; $200,000 $200,000; $400,000 200,000; $200,000 $400,000; $400,000

$200,000; $400,000

The graph below illustrates the consequences of housing quotas in Seattle, showing the demand and supply curves for housing. If there is no government regulation, the supply-equals-demand equilibrium occurs when there are _____ housing units in Seattle, selling for _____ each. 700,000; $400,000 700; $400 300,000; $600,000 300,000; $200,000

700,000; $400,000

What occurs in the market when Scotland sets the price floor of beer at $1.50 per can? A shortage of 2 billion cans A surplus of 2 billion cans A shortage of 4 billion cans A surplus of 4 billion cans

A surplus of 4 billion cans

Following the shift in supply to the left after a tax, the new supply curve intersects the demand curve at: a lower price. a lower quantity demanded. a higher quantity demanded. a higher quantity supplied.

a lower quantity demanded.

A price floor is: someone who decides to charge the prevailing price and whose actions do not affect the prevailing price. a maximum price that sellers can charge. the extra cost from producing one extra unit. a minimum price that sellers can charge.

a minimum price that sellers can charge.

With a quota on sellers, the resulting price will be determined by what _____ are willing to pay for the _____. sellers; unlimited quantity available sellers; limited quantity available buyers; limited quantity available buyers; unlimited quantity available

buyers; limited quantity available

Since taxes cause prices to change, it makes sense that the price elasticities of _____ determine(s) who is best able to avoid a tax. neither demand nor supply demand demand and supply supply

demand and supply

When the government imposes a binding price floor, some sellers won't find anyone to buy their product. This may mean that some try to _____ on the black market at prices _____ the price floor. illegally sell; above illegally sell; below illegally buy; above legally sell; below

illegally sell; below

Subsidies _____ the quantities demanded and supplied, and they tend to _____ the price buyers pay and increase the price sellers receive. decrease; lower decrease; increase increase; increase increase; lower

increase; lower

Governments impose quotas to _____, which can be applied to _____. limit price and quantity sold; sellers limit the quantity sold; both buyers and sellers set a minimum or maximum quantity sold; sellers limit a minimum or maximum price; buyers and sellers

limit the quantity sold; both buyers and sellers

Quantity regulations for immigration quotas effectively: decrease the wages of workers. limit the demand for workers. limit the supply of workers. increase the supply of workers.

limit the supply of workers.

When a tax on sellers increases by $0.05s, the quantity of gas sold will be _____, and sellers will receive a _____ price after tax. higher; higher lower; lower higher; lower lower; higher

lower; lower

Trade quotas limit the _____ of certain goods that can _____ the country. number; enter price; exit number; exit price; enter

number; enter

A _____ does two things: it raises prices, and it lowers the quantity sold. price ceiling subsidy price regulation price floor

price floor

Cities and suburbs that apply zoning laws have less housing and higher house prices because the laws effectively impose a: price floor, limiting the minimum price that can be charged. price ceiling, limiting the maximum price that can be charged. quota, limiting the number of housing units that can be built. mandate, limiting the number of housing units that can be built.

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

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 rise; demanded fall; supplied fall; demanded

rise; supplied

The graph below shows a new tax on buyers of $0.30 per 20-ounce bottle of soda, the price buyers pay after the tax: rises by $0.20 (from $1.10 to $1.30). falls by $0.30 (from $1.30 to $1.00). falls by $0.10 (from $1.10 to $1.00). rises by $0.30 (from $1.00 to $1.30).

rises by $0.20 (from $1.10 to $1.30).

When the government restricts supply, the lucky _____ who are able to succeed in the market are able to _____. buyers; charge higher prices buyers; pay higher prices sellers; pay higher prices sellers; charge higher prices

sellers; charge higher prices

The government uses _____ to encourage the consumption of certain goods like education. tax incidence statutory burden economic burden subsidies

subsidies

he Department of Transportation limits: the number of hours truck drivers can work each week. irrigating median strips along streets during drought season. the number of certain goods that can enter the country. the age of truck drivers who can drive at night.

the number of hours truck drivers can work each week.

The deduction on your pay stub for the FICA (Federal Insurance Contributions Act) tax is: your half of the payment toward your retirement plan 401(k). your full payment toward your government health insurance program (Medicare). your full payment toward your Social Security account. your half of the payment toward your Social Security account.

your half of the payment toward your Social Security account.

From the graph, how many cans of beer are beer producers willing to sell when Scotland imposed the price regulation on beer? $1.50 15 billion cans 13 billion cans 17 billion cans

17 billion cans

The graph below illustrates the consequences of housing quotas in Seattle. When sellers are limited to selling only the _____ houses, buyers will compete with each other for the limited available housing, bidding up the price until it reaches _____. 300,000; $600,000 300,000; $400,000 300,000; $200,000 700,000; $400,000

300,000; $600,000

_____ requires you to buy or sell a minimum amount of a good. A price regulation A mandate A quota A quantity regulation

A mandate

The graph below shows rent control in the market for New York City apartments. Is there a shortage or surplus of apartments in the market, and how many? A shortage of 150,000 apartments A surplus of 50,000 apartments A surplus of 150,000 apartments A shortage of 100,000 apartments

A shortage of 150,000 apartments

Consider the market for movie theater tickets shown in the accompanying graph. What is the equilibrium price and quantity? A) Equilibrium price: Equilibrium quantity: Illustrate graphically what happens to the supply curve if the government imposes a $2 per ticket tax on movie theaters. B) Identify the amount consumers now pay for a ticket and the amount movie theaters get to keep. Movie goers pay $ _____ per ticket Theaters keep $ _____ per ticket C) The economic burder is shared equally since each side sees its final price change by the same amount. borne by the theaters since they have to pay the tax. borne by movie goers since the theaters will simply add the tax to the price of a ticket. Show on the graph what happens if instead the government imposes a $2 per ticket tax on movie goers. D) Identify the amount consumers now pay for a ticket and the amount movie theaters get to keep. Movie goers pay $ ____ per ticket Theaters keep $ ____ per ticket E) The economic burden is shared equally since each side sees its final price change by the same amount. borne by the movie goers since they have to pay the tax. borne by theaters since the movie goers will refuse to pay more for a ticket. F) The final incidence of the tax is _______ of the statutory incidence. The economic burden will be borne by _____.

A) Equilibrium price: $7 Equilibrium quantity: 6 thousand tickets B) Movie goers pay $ 8 per ticket Theaters keep $ 6 per ticket C) shared equally since each side sees its final price change by the same amount. D) Movie goers pay $8 per ticket Theaters keep $6 per ticket E) shared equally since each side sees its final price change by the same amount. F) independent, both sides in most cases

_____ often limit the quantity of pollutants that firms can release. Environmental regulations The Department of Transportation regulations Drought regulations Hunting season regulations

Environmental regulations

A price floor does two things: It raises prices and raises the quantity sold. It lowers prices, and it raises the quantity sold. It raises prices, and it lowers the quantity sold. It lowers prices and raises the quantity sold.

It raises prices, and it lowers the quantity sold.

Justify this statement: A change in the statutory burden doesn't affect the economic burden buyers and sellers face; in other words, it doesn't matter who is assigned to pay the tax bills. It's true because the outcome is the same. It's true because statutory burden of tax is the same as economic burden. It's false; whoever is assigned to pay higher taxes has more economic burden. It's false because statutory burden of tax determines economic burden.

It's true because the outcome is the same.

_____ increase the quantities demanded and supplied, and they tend to lower the price buyers pay and _____ the price sellers receive. Determine the impact of a subsidy on market equilibrium. Subsidies; increase Taxes; increase Subsidies; lower Taxes; lower

Subsidies; increase