Exam 6: Governments Actions in Markets

Suppose the minimum wage is $4 per hour, and 1,100 units of labour are hired. Then the government raises the minimum wage to $6 per hour, and 900 units are now hired. Choose the correct statement.

The buyer pays most of a tax if demand is relatively inelastic because

If a sales tax is imposed on food, who is likely to pay most of the tax?

Use the figure below to answer the following questions. Figure 6.2.1 -Refer to Figure 6.2.1. Suppose a $5 per hour minimum wage is in force. What is the lowest wage per hour an unemployed person would be willing to accept?

Use the figure below to answer the following questions. Figure 6.3.2 -Refer to Figure 6.3.2. The seller's share of the tax is

Use the table below to answer the following questions. Table 6.3.1 -Refer to Table 6.3.1. Suppose a sales tax of $2 a unit is imposed on the good described in the table. The sellers' share of the tax is

Good A has a perfectly inelastic demand and an upward-sloping supply curve. Good B has a perfectly inelastic supply and a downward-sloping demand curve. If the same sales tax is imposed on the sellers of both good A and good B, the

Use the figure below to answer the following questions. Figure 6.3.1 -Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed. Between 4,000 and 5,000 frisbees, supply is

Use the table below to answer the following questions. Table 6.2.1 -Table 6.2.1 gives the supply and demand schedules for teenage labour in Genoa City. Suppose a new fast food restaurant opens and increases the quantity demanded of teenage labour by 400 hours per week at each wage rate. If the teenage labour market is unregulated, there is an increase in teenage employment to

Provincial governments across Canada recently started legalizing and then heavily taxing gambling at casinos. The new taxes are lower than the cost of breaking the law was to the sellers of the previously illegal casino services. The costs of breaking the law to the buyers of these services also fell to zero. This change will likely lead to

Use the figure below to answer the following questions. Figure 6.1.1 -Refer to Figure 6.1.1. If the demand for rental housing increases and the demand curve shifts rightward from D₀ to D₁, and there is a strictly enforced rent ceiling of $150 per room,

When a sales tax is imposed on sellers, the supply curve shifts so that the vertical distance between the original supply curve and supply plus tax curve equals the

Use the table below to answer the following questions. Table 6.1.1 -Refer to Table 6.1.1, which gives the demand schedule and the supply schedule for the apartment market in Anytown, Alberta. If a rent ceiling of $600 is imposed in the apartment market, then

The burden of tax on sellers is greater the more (1) elastic is demand. (2) inelastic is demand. (3) elastic is supply. (4) inelastic is supply.

Use the table below to answer the following questions. Table 6.3.2 -Refer to Table 6.3.2. You are in the business of producing and selling hamburgers, French fries, pizza, and ice cream. The mayor of your city plans to impose a sales tax on one of these products. Based on the elasticities in the table, on which of these goods would your customers least like to be taxed?

All of the following statements about legalizing and taxing drugs are true except

An effective production quota

Use the figure below to answer the following questions. Figure 6.2.1 -Refer to Figure 6.2.1. If the minimum wage is set at $6 per hour, what is the level of unemployment in millions of hours?

An effective subsidy paid to soybean farmers ________ the market price of soybeans and ________ the farmers' marginal cost of production.

The burden of the tax on buyers is greater the more (1) elastic is demand. (2) inelastic is demand. (3) elastic is supply. (4) inelastic is supply.