Exam 6: Supply, Demand, and Government Policies

If the demand curve is very elastic and the supply curve is very inelastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

The quantity sold in a market will decrease if the government decreases a

Which of the following is not correct?

Suppose the government imposes a $40 tax on the buyers of refrigerators. The tax would

Table 6-1 -Refer to Table 6-1. Which of the following price ceilings would be binding in this market?

​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,

When a price ceiling is binding, is the price ceiling set above or below the market equilibrium price?

To be binding, a price ceiling must be set above the equilibrium price.

The incidence of a tax falls more heavily on

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

One common example of a price ceiling is rent control.

At the equilibrium price, the quantity that buyers want to buy exactly equals the quantity that sellers want to sell.

A price floor set above the equilibrium price causes a surplus in the market.

Figure 6-15 -Refer to Figure 6-15. For a price ceiling to be binding in this market, it would have to be set at

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. How many units of the good are sold after the imposition of the price floor?

Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

Figure 6-8 -Refer to Figure 6-8. The price of the good would continue to serve as the rationing mechanism if

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Suppose that the demand for digital cameras is elastic, and the supply of digital cameras is inelastic. A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

Figure 6-17 This figure shows the market demand and market supply curves for good Y -Refer to Figure 6-17. A government-imposed price of $24 in this market is an example of a