Exam 6: Government Actions in Markets

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?

The ________ principle is the proposition that people should pay taxes equal to the benefits they receive from the services provided by government. The ________ principle is the proposition that people should pay taxes according to how easily they can bear the burden of the tax.

An effective production quota

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.

Use the table below to answer the following questions. Table 6.4.1 -Refer to Table 6.4.1.The table shows the demand and supply schedules for rice.The market for rice is in equilibrium.With a subsidy of $0.30 a box, the price of a box of rice is ________, the marginal cost of producing rice is ________ a box, and the quantity of rice produced is ________ boxes.

Suppose the demand for gasoline is inelastic, but not perfectly inelastic, and the supply is elastic, but not perfectly elastic.A tax on gasoline is paid

Which one of the following statements about illegal goods is true?

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 price received by sellers (net of the cost of breaking the law)would be

Use the table below to answer the following questions. Table 6.4.1 -Refer to Table 6.4.1.The table shows the demand and supply schedules for rice.With a production quota of 2,000 boxes a week, the price of a box of rice is ________, the marginal cost of producing rice is ________ a box, and the quantity of rice produced is ________ boxes a week.

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 $7 per hour?