Exam 6: Government Actions in Markets

Use the table below to answer the following questions. Table 6.5.1 The Market for a Prohibited Good -Refer to Table 6.5.1.If a $2-per-unit cost of breaking the law is imposed on sellers, the new price is ________ and the new equilibrium quantity is ________ units.

Suppose a minimum wage of $4 an hour is in force, resulting in unemployment of 10 million hours.Then the demand for labour increases such that supply and demand curves intersect at a wage rate of $5 per hour.What will happen to the equilibrium wage rate and employment?

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 buyers' share of the tax is

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

Which one of the following is likely to be the outcome of a rent ceiling imposed below the equilibrium rent?

The buyer pays most of a tax if supply is relatively elastic because

Suppose the government introduces a ceiling on the fees that lawyers are permitted to charge.This fee ceiling

Cigarette Taxes, Black Markets, and Crime: Lessons from New York's 50-Year Losing Battle New York City has the highest cigarette taxes in the country. During the four months following the recent tax hike, sales of taxed cigarettes in the city fell by more than 50 percent as consumers turned to the city's bustling black market. The thriving illegal market for cigarettes has diverted billions of dollars from legitimate businesses and governments to criminals. Source: Cato Institute, February 6, 2003 -The emergence of a black market ________ the elasticity of demand in the legal market for cigarettes. An increase in the tax rate can result in a decrease in the tax revenue when the elasticity of demand is ________.

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?

Use the table below to answer the following questions. Table 6.2.2 -Refer to Table 6.2.2.What is the level of unemployment in millions of hours if the minimum wage is set at $3 per hour?

Use the figure below to answer the following questions. Figure 6.3.3 -Refer to Figure 6.3.3.Suppose a tax of $1 is imposed.In which market would tax revenue be the lowest?

Suppose the Canadian Dairy Commission sets a production quota for dairy production above the equilibrium quantity.Then,

When an effective production quota is applied in the market for wheat, the quantity produced ________ and the price ________.The marginal social benefit ________ marginal social cost.

Suppose the cost of breaking the law is imposed on the sellers of an illegal good.This action will have its biggest impact on quantity if the demand for the good is

If the demand for a good is perfectly inelastic, then a tax on the good will be paid

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.In an unregulated market,

Use the figure below to answer the following questions. Figure 6.3.3 -Refer to Figure 6.3.3.Suppose a tax of $1 is imposed.In which market would the buyer pay the highest portion of the tax?

Use the figure below to answer the following questions. Figure 6.3.2 -Refer to Figure 6.3.2.The amount of the tax per unit is

Use the figure below to answer the following questions. Figure 6.2.1 -Refer to Figure 6.2.1.What is the equilibrium wage rate per hour in an unregulated market?

Use the table below to answer the following questions. Table 6.5.1 The Market for a Prohibited Good -Refer to Table 6.5.1.Which one of the following costs of breaking the law imposed on the buyers of the good would reduce the quantity to zero?