Exam 6: Supply, Demand, and Government Policies

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.

When a binding price floor is imposed on a market,

Table 6-3 The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market. -Refer to Table 6-3. Following the imposition of a price floor $2 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting market price is

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. If the government imposes a price ceiling of $6 on this market, then there will be

Does a binding price ceiling result in a shortage or a surplus in the market?

Figure 6-15 -Refer to Figure 6-15. Suppose a price ceiling of $2 is imposed on this market. As a result,

If a tax is levied on the sellers of a product, then the demand curve will

Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $3 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?

Figure 6-29 Suppose the government imposes a $2 on this market. -Refer to Figure 6-29. The buyers and sellers will bear an equal share of the tax burden if the demand is

A tax imposed on the buyers of a good will lower the

​Figure 6-33 The diagram shows the effect of a tax as measured by the distance between J and K. -Refer to Figure 6-33. Based upon the diagram,​

An outcome that can result from either a price ceiling or a price floor is

Figure 6-31 -Refer to Figure 6-31. If the government set a price floor at $17, would there be a shortage or surplus, and how large would be the shortage/surplus?

Table 6-2 -Refer to Table 6-2. A price ceiling set at $5 results in

If a tax is imposed on the buyers of a product, then the tax burden will fall entirely on the buyers.

Buyers and sellers rarely share the burden of a tax equally.

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. A binding price floor is shown in

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell. Further, suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle. Which of the following statements is correct?

The Earned Income Tax Credit is an example of a

Table 6-6 -Refer to Table 6-6. If the government set a price floor at $2, would there be a shortage or surplus, and how large would be the shortage/surplus?