Exam 6: Government Actions in Markets

With rent controls, which of the following is most likely to occur?

-To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. Using the above figure, the area that equals the lost consumer surplus from this tax on sports equipment is

A minimum wage set above the equilibrium wage rate has no effect.

Compared to the situation in which a good is legal, making the good illegal and imposing ________ results in less being sold.

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

The government of Healthyland imposes a tax on sellers of salt. The tax is $0.10 per pound. With no tax, the market price of salt is $0.40 per pound. The demand for salt is perfectly inelastic, and the elasticity of supply is 1.5. With the tax, the price that sellers of salt in Healthyland receive and keep is

Is the minimum wage an example of a price floor or a price ceiling? Why?

-To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. The sports equipment consumers' share of this tax would be greater than that shown in the above figure

-In the above figure, if the government imposed a minimum wage of $8 per hour in this labor market, the increase in the hourly wage for those who are able to keep their jobs is

The incidence of the tax between buyers and sellers depends only on the elasticity of demand.

A good has a downward-sloping demand curve and a perfectly elastic supply. Imposing a sales tax of $1 per unit on the sellers of the good

If a production quota is set below the equilibrium quantity, at the quota quantity, marginal benefit is ________ marginal cost and the level of production is ________.

-Suppose the government wants to discourage the use of cigarettes. If it imposes a tax on cigarettes, the equilibrium quantity falls the most when the elasticity of demand equals

Which of the following is a result of a rent ceiling set below the equilibrium rent? I. equity in the housing market II) efficient allocation of resources III) a shortage of housing units.

-A minimum wage ________.

One way to assure that poor people will have a plentiful supply of affordable housing available to them is by imposing rent ceilings.

-In the figure above, the demand curve shifts rightward from D₀ to D₁ so that D₁ is the relevant demand curve. Suppose the government imposes a rent ceiling of $300 per month. In the short run there will be

-The above figure shows the apartment market in Big City. If a government policy results in a shortage of 1,500 apartments in the Big City rental market, it is most likely that the Housing Authority has imposed

-In the above figure, the equilibrium price of a paperback book is $6 per book and the equilibrium quantity is 3 million books. The National Literature Board convinces the government to impose a price ceiling of $6 per book. At this price, the quantity of books supplied to the market will be

A rent ceiling set below the equilibrium rent will