Exam 6: Supply, Demand, and Government Policies

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Table 6-4 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 $3 above the equilibrium price in this market. -Refer to Table 6-4. Following the imposition of a price floor $3 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 shortage is

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

When a tax is placed on the buyers of cell phones, the size of the cell phone market

In the short run, rent control causes the quantity supplied

If a tax is levied on the sellers of a product, then there will be a(n)

Figure 6-8 -Refer to Figure 6-8. If the government imposes a price floor of $5 on this market, then there will be

Policymakers use taxes

The Earned Income Tax Credit is an example of a

Figure 6-7 -Refer to Figure 6-7. Suppose a price ceiling of $5 is imposed on this market. As a result,

When a free market for a good reaches equilibrium, anyone who is willing and able to pay the market price can buy the good.

Scenario 6-1 Suppose that demand in the market for good X is given by the equation and that supply in the market for good X is given by the equation -Refer to Scenario 6-1. If the government set a price ceiling at $12, would there be a shortage or surplus, and how large would be the shortage/surplus?

Figure 6-20 -Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

If a tax is imposed on a market with inelastic supply and elastic demand, then

When a tax of $1.00 per gallon is imposed on sellers of gasoline, the supply curve for gasoline shifts upward, but by less than $1.00.

Which of the following observations would be consistent with the imposition of a binding price floor on a market? After the price floor becomes effective,

Economists blame the long lines at gasoline stations in the U.S. in the 1970s on

Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?

Regardless of whether a tax is levied on sellers or buyers, taxes encourage market activity.