Exam 6: Government Actions in Markets

-In the above figure, the tax incidence is

-The market for unskilled labor is illustrated in the figure above. The market is in equilibrium and then a minimum wage of $3 per hour is imposed. Employment will decrease by

The amount of a tax paid by the sellers will be larger the more ________ the demand and the more ________ the supply.

-The above figure shows the apartment market in Big City. A rent ceiling of $1100 would

-The figure above shows the market for milk in Cowland. A subsidy paid to producers of $1 per gallon of milk is introduced. If there are no external costs and no external benefits, the quantity of milk sold is

-The figure above shows the market for milk in Cowland. If a subsidy paid to producers of $1 per gallon of milk is introduced, how many gallons are sold per year?

-How a sales tax is divided between buyers and sellers is determined by

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The amount of the tax paid by the sellers would be greater than shown in the figure if

Explain the relationship between the incidence of a tax and elasticity.

How does a production quota influence farm prices and output?

Which of the following outcomes is NOT a result of a tax imposed on sellers of gasoline?

"The tax on insulin in the Philippines is anywhere between 10 and 20 percent. If you are rich and living in the Philippines, this is not a problem, but if you are poor, then insulin becomes something that you cannot afford." If the government places the tax on sellers, what is the effect on the supply and demand curves?

-In the figure above, if the minimum wage is $2 per hour, then

The buyers pay the entire sales tax levied on a good when demand is perfectly ________ or supply is perfectly ________.

-In the above figure, a price ceiling of $4 would

Suppose the local government places a sales tax on hotel rooms and that the demand for these rooms is elastic while the supply is perfectly inelastic. The tax incidence is such that the tax will be paid by

Because a subsidy raises marginal benefit, it can be used to eliminate the deadweight loss from overproduction.

Explain how a price floor set above the equilibrium market price for a good can cause a surplus of that good.

-The above table gives the demand schedule and the supply schedule for housing in Anytown, U.S.A. If a rent ceiling of $600 was imposed in the housing market, then

-The above figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. The sales tax on anti-freeze decreases the quantity of anti-freeze that automobile owners purchase by