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Exam 6: Supply, Demand, and Government Policies

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Question 241

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Renters of rent-controlled apartments will likely benefit from both lower rents and higher quality of apartments.

A) True
B) False

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Question 242

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Figure 6-20 -Refer to Figure 6-20. In the after-tax equilibrium, government collects

A) $1,440 in tax revenue; of this amount, $960 represents a burden on buyers and $480 represents a burden on sellers.
B) $1,440 in tax revenue; of this amount, $720 represents a burden on buyers and $720 represents a burden on sellers.
C) $1,680 in tax revenue; of this amount, $1,260 represents a burden on buyers and $420 represents a burden on sellers.
D) $1,680 in tax revenue; of this amount, $840 represents a burden on buyers and $840 represents a burden on sellers.

E) B) and C)
F) B) and D)

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Question 243

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Figure 6-24 Suppose the government imposes a $2 on this market. -Refer to Figure 6-24. The buyers and sellers will bear an eaqual share of the tax burden if the demand is

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

Buyers of a good bear the larger share of the tax burden when the (i) Supply is more elastic than the demand for the product.(ii) Demand in more elastic than the supply for the product.(iii) Tax is placed on the sellers of the product.(iv) Tax is placed on the buyers of the product.

Using the graph shown, answer the following questions. a. What was the equilibrium price in this market before the tax? b. What is the amount of the tax? c. How much of the tax will the buyers pay? d. How much of the tax will the sellers pay? e. How much will the buyer pay for the product after the tax is imposed? f. How much will the seller receive after the tax is imposed? g. As a result of the tax, what has happened to the level of market activity? a.What was the equilibrium price in this market before the tax? b.What is the amount of the tax? c.How much of the tax will the buyers pay? d.How much of the tax will the sellers pay? e.How much will the buyer pay for the product after the tax is imposed?

Under rent control, tenants can expect

Which of the following would be the least likely result of a binding price ceiling imposed on the market for rental cars?

A tax on the sellers of cameras encourages

Using the graph shown, answer the following questions.a. What was the equilibrium price in this market before the tax? b. What is the amount of the tax? c. How much of the tax will the buyers pay? d. How much of the tax will the sellers pay? e. How much will the buyer pay for the product after the tax is imposed? f. How much will the seller receive after the tax is imposed? g. As a result of the tax, what has happened to the level of market activity? a.What was the equilibrium price in this market before the tax? b.What is the amount of the tax? c.How much of the tax will the buyers pay? d.How much of the tax will the sellers pay? e.How much will the buyer pay for the product after the tax is imposed?

Figure 6-25 -Refer to Figure 6-25. In which market will the majority of the tax burden fall on buyers?

Figure 6-17 -Refer to Figure 6-17. How is the burden of the tax shared between buyers and sellers? Buyers bear

A price floor set below the equilibrium price causes a surplus in the market.

Most of the burden of a luxury tax falls on the middle class workers who produce luxury goods rather than on the rich who buy them.

Figure 6-23 -Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

If a price ceiling is a binding constraint on a market, then

Figure 6-25 -Refer to Figure 6-25. In which market will the majority of the tax burden fall on sellers?

Figure 6-15 -Refer to Figure 6-15. Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Prices are inefficient rationing devices.

Suppose sellers of liquor are required to send $1.00 to the government for every bottle of liquor they sell. Further, suppose this tax causes the price paid by buyers of liquor to rise by $0.80 per bottle. Which of the following statements is correct?