Econ Quiz 5
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Burden of tax on sellers
Distance between the two demand curves.
The price that buyers pay after the tax is imposed is
Where D after tax equilibrium lines up with D
A minimum wage that is set above a market's equilibrium wage will result in
an excess supply of labor, that is, unemployment.
A price ceiling will be binding only if it is set
below the equilibrium price.
an excess supply of labor, that is, unemployment.
not change and the price received by sellers will not change.
Suppose that in a particular market, the demand curve is highly elastic and the supply curve is highly inelastic. If a tax is imposed in this market, then
the sellers will bear a greater burden of the tax than the buyers.