Exam 6: Government Actions in Markets

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

-In the above figure, CBL is the cost of breaking the law. If it is illegal to buy, but not illegal to sell, then the price per unit will be

-To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. Referring to the above figure, how much tax per unit has the government imposed?

One of the best defenses we have against malaria these days comes from a fern-like weed called wormwood. Fluctuating supply and demand have pushed the plant's price from $155 per kilo one year, to over $1000 the next. There is a push to set a price ceiling for the plant. Which of the following would NOT occur if there was a price ceiling set below the equilibrium price on wormwood?

-In the above figure, what is the total tax revenue collected by the government?

-In the above figure, if the minimum wage is set at $8 per hour, the level of unemployment is ________ hours per week is

The federal government pays airlines to service small cities in the United States through a subsidy program called Essential Air Service which was established in 1978 when the airline industry was deregulated. Most subsidies can't exceed $200 per passenger. What is NOT an effect of this subsidy?

________ is an illegal activity between buyers and sellers sometimes used to evade a price ceiling.

If penalties are imposed only on buyers (but not on sellers) of marijuana, the equilibrium price of marijuana ________, and the equilibrium quantity of marijuana sold ________.

A sales tax on sellers a good leads to a loss of consumer surplus, but a price ceiling or a price floor on that same product will not.

The Volumetric Ethanol Excise Tax Credit (VEETC) is a tax credit for registered ethanol-gasoline blenders. Qualified blenders receive $0.51 for each gallon of pure ethanol they blend into gasoline. VEETC is an example of a

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The government would raise more tax revenue from this excise tax if

-The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $400, how many apartment units are rented?

What is the difference between a rent ceiling set below the equilibrium rent and a rent ceiling set above the equilibrium rent?

Suppose a $1 tax is placed on a good. The more elastic the supply of the good, the

-The figure shows the market for books before and after a sales tax is introduced. Each week, the tax creates a deadweight loss of ________, decreases consumer surplus by ________ , and decreases producer surplus by ________.

-The figure shows the market for books before and after a sales tax is introduced. The tax on books is ________ a book, buyers pay ________ of tax per book, and the government's tax revenue is ________ a week.

-Which of the following is a likely outcome of rent ceilings?

-The price ceiling depicted in the above figure results in

Can the incidence of a sales tax ever be so that buyers pay all of the tax or so that sellers pay all of the tax?