Exam 6: Supply, Demand, and Government Policies

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, the

If a price floor is not binding, then

The minimum wage is an example of a

Which of the following is not correct?

The goal of the minimum wage is to ensure workers a minimally adequate standard of living.

Table 6-6 -Refer to Table 6-6. If the government set a price floor at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?

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

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

Suppose the government imposes a 25-cent tax on the buyers of incandescent light bulbs. Which of the following is not correct? The tax would

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the sellers in this market?

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

A binding price floor causes quantity supplied to be less than quantity demanded.

Which of the following is correct?

Whether a tax is levied on sellers or buyers, buyers and sellers usually share the burden of taxes.

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

A binding minimum wage creates unemployment.

Figure 6-22 -Refer to Figure 6-22. As the figure is drawn, who sends the tax payment to the government?

A surplus results when a

Scenario 6-2 Suppose demand for a product is given by the equation and supply for the product is given by the equation -Refer to Scenario 6-2. Suppose the government sets a price floor at $13 for this product. Is this price floor binding, and what will be the size of the shortage/surplus in this market?

A binding minimum wage raises the incomes of some workers, but it lowers the incomes of workers who cannot find jobs.