Exam 6: Supply, Demand, and Government Policies

Figure 6-21 ​ -Refer to Figure 6-21. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the sellers in this market?

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

Figure 6-18 ​ -Refer to Figure 6-18. If the government set a price ceiling at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

A tax on sellers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

If the supply curve is more price elastic than the demand curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Figure 6-18 ​ -Refer to Figure 6-18. If the government set a price ceiling at $8, would there be a shortage or surplus, and how large would be the shortage/surplus?

The primary effect of rent control in the short run is to reduce rents.

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

Figure 6-10 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-10. The amount of the tax per unit is

A tax on buyers increases the size of a market.

A tax on sellers increases supply.

Figure 6-16 ​ ​ -Refer to Figure 6-16. A price ceiling set at $70 would create a shortage of 40 units.

A tax on buyers shifts the demand curve and the supply curve.

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

Most labor economists believe that the supply of labor is

Figure 6-4 Graph (a) Graph (b) ​ ​ -Refer to Figure 6-4. In graph (b), there will be

Under rent control, bribery is a potential mechanism to

When a tax is placed on the sellers of smart watches, the size of the smart watch market

A tax on sellers increases the quantity of the good sold in the market.

If the demand curve is very inelastic and the supply curve is very elastic 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.