Exam 7: Government Actions in Markets

Price (dollars per slice of pizza) Quantity supplied Quantity demanded (slices of pizza per week) (slices of pizza per week) 1 10 50 2 20 40 3 30 30 4 40 20 5 50 10 -The demand and supply schedules for pizza are in the table above. A price ceiling of $2 per slice results in

Giving in to the demand of protestors, suppose the French government reduces the tax on gasoline by 15 percent. Neither the demand for gasoline nor the supply of gasoline is perfectly elastic or inelastic. As a result of the tax cut, the price for a gallon of gasoline paid by buyers

Suppose the current equilibrium wage rate for housekeepers is $8.60 per hour. An increase in the minimum wage to $7.50 per hour leads to

Price (dollars per slice of pizza) Quantity supplied Quantity demanded (slices of pizza per week) (slices of pizza per week) 1 10 50 2 20 40 3 30 30 4 40 20 5 50 10 -The demand and supply schedules for pizza are in the table above. A price ceiling of $4 per slice results in

When a tax is imposed on a good or service, the

The surplus for workers from a job is equal to the

-The above figure shows a labor market with a minimum wage of $8 an hour. The deadweight loss equals the

With a rent ceiling set below the equilibrium rent, i. all renters are able to rent apartments at a lower rent. Ii. there is a shortage of apartments. Iii. the quantity of apartments supplied does not change because buildings cannot be moved.

-The above figure shows the market for biologists. The government decides to set a minimum wage for biologists of $18 per hour. After this minimum wage is in effect, the firms' surplus equals ________.

-In the figure above, if the minimum wage is $8 per hour, then

Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic. So, imposing a tax on the good results in a ________ in the price received and kept by sellers and a ________ in the price paid by buyers.

Who are minimum wages designed to help? Do they succeed? What is their effect on society?

-The graph shows the market for ski chalets in Aspen. If a rent ceiling is set at $1,900 a week, then the maximum amount charged in the black market is ________ a week.

Tax incidence refers to

In a housing market with a rent ceiling below the equilibrium rent, apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling. Why does this difference exist?

A price ceiling

7.5 Chapter Figures The figure above shows the market for MP3 players, where S is the supply curve and D is the demand curve before any tax. The government imposes a $10 per unit tax on buyers of MP3 players. -After the tax is imposed, the price received by the seller is ________ per MP3 player.

-The figure above shows the market for a life-saving drug. Suppose the government imposes a $150 tax per dose on the drug. Show and describe the impact on the market. Who pays this tax?

Labor unions ________ increases in the minimum wage because an increase in the minimum wage ________ the demand for union labor.

If the demand curve for a good is horizontal, a tax is levied on this product is