Exam 6: Supply, Demand, and Government Policies

Figure 6-29 Suppose the government imposes a $2 on this market. -Refer to Figure 6-29. Suppose D1 represents the demand curve for gasoline in both the short run and long run, S1 represents the supply curve for gasoline in the short run, and S2 represents the supply curve for gasoline in the long run. After the imposition of the $2, the price paid by buyers will be

Suppose sellers of liquor are required to send $5.00 to the government for every bottle of liquor they sell. Further, suppose this tax causes the price paid by buyers of liquor to rise by $3.00 per bottle. Which of the following statements is correct?

If a price ceiling is a binding constraint on a market, then

To say that a price ceiling is binding is to say that the price ceiling

Minimum-wage laws dictate

The minimum wage was instituted to ensure workers

A binding price ceiling causes a shortage in the market.

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor,

Figure 6-5 -Refer to Figure 6-5. If the solid horizontal line on the graph represents a price floor, then the price floor is

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

A tax on buyers will shift the

Figure 6-4 -Refer to Figure 6-4. A government-imposed price floor of $12 in this market results in

When a binding price floor is imposed on a market,

Figure 6-25 -Refer to Figure 6-25. How much tax revenue does this tax generate for the government?

When the government imposes a binding price ceiling on a competitive market, a surplus of the good arises, and sellers must ration the scarce goods among the large number of potential buyers.

Workers determine the supply of labor, and firms determine the demand for labor.

The U.S. Congress first instituted a minimum wage in

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

The tax incidence

Which of the following was not a result of the luxury tax imposed by Congress in 1990?