econ

The equilibrium price in the market before the tax is imposed is

area of triangle

A minimum wage that is set above a market's equilibrium wage will result in an excess

only those workers who become unemployed.

The minimum wage, if it is binding, lowers the incomes of

only those workers who become unemployed.

Refer to Figure 6-10. A price floor set at

$16 will be binding and will result in a surplus of 10 units.

Refer to Figure 6-18. The price that buyers pay after the tax is imposed is

24$

The vertical distance between points A and B represents the tax in the market. The per-unit burden of the tax on sellers is

6 $

Refer to Figure 6-18. The per-unit burden of the tax on sellers is

6$

figure 6-22 How much tax revenue does this tax generate for the government?

60

Refer to Figure 6-13. Which of the following statements is correct?

A price floor set at $6.50 would result in a surplus.

Refer to Figure 6-28. Suppose a tax of $4 per unit is imposed on this market. Which of the following is correct?

Buyers will bear more of the burden of the tax than sellers.

Suppose the government has imposed a price floor on cellular phones. Which of the following events could transform the price floor from one that is binding to one that is not binding?

Traditional land line phones become more expensive.

Which of the following is correct? Workers determine the supply of labor, and firms determine the demand for labor. Workers determine the demand for labor, and firms determine the supply of labor. The labor market is a single market for all different types of workers. The price of the product produced by labor adjusts to balance the supply of labor and the demand for labor.

Workers determine the supply of labor, and firms determine the demand for labor.

Which of the following is not a short-run effect of rent control on the housing market?

a large shortage

Suppose a price ceiling of $2 is imposed on this market. As a result,

buyers' total expenditure on the good falls by $15.

Price ceilings and price floors that are binding

cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price.

To say that a price ceiling is binding is to say that the price ceiling

causes quantity demanded to exceed quantity supplied.

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

decrease the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.

If the government removes a binding price floor from a market, then the price received by sellers will

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

Suppose that a tax is placed on books. If the buyers pay the majority of the tax, then we know that the

demand is more inelastic than the supply.

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

demand is steeper than supply

In which market will the tax burden be most equally divided between buyers and sellers?

equal slopes of supply and demand

If the government levies a $1,000 tax per boat on sellers of boats, then the price paid by buyers of boats would

increase by less than $1,000.

A tax burden falls more heavily on the side of the market that

is more inelastic.

The tax burden will fall most heavily on sellers of the good when the demand curve

is relatively flat, and the supply curve is relatively steep.

Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elastic. A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

less than $0.50.

When a tax is placed on the sellers of a product, buyers end up paying

more, and sellers receive less than they did before the tax.

Assume the demand for cigarettes is relatively inelastic, and the supply of cigarettes is relatively elastic. When cigarettes are taxed, we would expect

most of the burden of the tax to fall on buyers of cigarettes, regardless of whether buyers or sellers of cigarettes are required to pay the tax to the government.

If the government imposes a price ceiling of $8 on this market, then there will be

no shortage. because price is equilibrium price

Refer to Figure 6-11. If the government imposes a price ceiling at $6, it would be

non-binding if market demand is Demand A and binding if market demand is Demand B.

Which of the following price floors would be binding in this market?

price above the equilibrium price in supply curve

When a binding price ceiling is imposed on a market,

price no longer serves as a rationing device.

When a binding price floor is imposed on a market,

price no longer serves as a rationing device. the quantity supplied at the price floor exceeds the quantity that would have been supplied without the price floor. only some sellers benefit.

In response to a shortage caused by the imposition of a binding price ceiling on a market..

price will no longer be the mechanism that rations scarce resources. long lines of buyers may develop. sellers could ration the good or service according to their own personal biases.

The imposition of a binding price ceiling on a market causes

quantity demanded to be greater than quantity supplied.

If a tax is imposed on a market with inelastic supply and elastic demand, then

sellers will bear most of the burden of the tax.

If a price ceiling is not binding, then

the equilibrium price is below the price ceiling.

Refer to Figure 6-7. Suppose a price floor of $8 is imposed on this market. As a result,

the quantity of the good demanded decreases by 10 units.

When a tax is placed on the buyers of tennis racquets,

the size of the tennis racquet market decreases, but the price paid by buyers increases.

Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

with shortages and waiting lists, they have no incentive to maintain and improve their property.

The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market. Following the imposition of a price floor $2 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting shortage is

0 units

Refer to Figure 6-22. The amount of the tax per unit is

$2.00.

figure 628 Suppose a tax of $6 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?

$4

A nonbinding price ceiling (i) causes a surplus. (ii) causes a shortage. (iii) is set at a price above the equilibrium price. (iv) is set at a price below the equilibrium price.

(iii) is set at a price above the equilibrium price.

Refer to Figure 6-22. Sellers pay how much of the tax per unit?

.50