Exam 6: Supply, Demand, and Government Policies

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

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

Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elastic. A tax of $1 per frame levied on picture frames will increase the price paid by buyers of picture frames by

Rent controls only affect the demand side of the rental market. ​

A price ceiling is always a binding price control, whereas a price floor may be either binding or not binding.

The Federal Insurance Contribution Act (FICA) tax is an example of a(n)

Table 6-5 -Refer to Table 6-5. Suppose the government imposes a price floor of $3 on this market. What will be the size of the surplus (or shortage) in this market?

Most labor economists believe that the supply of labor is

Figure 6-10 -Refer to Figure 6-10. A price floor set at

A tax on sellers shifts the supply curve to the left.

Workers with high skills and much experience are not typically affected by the minimum wage.

The goal of rent control is to

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

If the demand curve is more price elastic than the supply curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Figure 6-23 -Refer to Figure 6-23. The price paid by buyers after the tax is imposed is

Figure 6-25 -Refer to Figure 6-25. The equilibrium price in the market before the tax is imposed is

Figure 6-32 -Refer to Figure 6-32. If the government set a price floor at $55, would there be a shortage or surplus, and how large would be the shortage/surplus?

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

If the government levies a $0.25 tax per MP3 music file downloaded on buyers of MP3 music files, then the price received by sellers of MP3 music files would

Figure 6-28 -Refer to Figure 6-28. Suppose a tax of $6 per unit is imposed on this market. What will be the new equilibrium quantity in this market?