econ quiz 6

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A price floor is binding when it is set

above the equilibrium price, causing a surplus.

A price floor will be binding only if it is set

above the equilibrium price.

A price ceiling is binding when it is set

below the equilibrium price, causing a shortage.

A shortage results when a

binding price ceiling is imposed on a market.

A tax on buyers will shift the

demand curve downward by the amount of the tax.

A minimum wage that is set below a market's equilibrium wage will

have no impact on employment.

A tax imposed on the sellers of a good will raise the

price paid by buyers and lower the equilibrium quantity.

A tax on sellers will shift the

supply curve upward by the amount of the tax.

A payroll tax is a

tax on the wages that firms pay their workers.


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