Exam 6: Supply, Demand, and Government Policies

Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14. The effective price that sellers receive after the tax is imposed is

Most labor economists believe that the supply of labor is much more elastic than the demand.

Regardless of whether a tax is levied on sellers or buyers, taxes discourage market activity.

If a price floor is not binding, then

Figure 6-6 -Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism?

Figure 6-8 -Refer to Figure 6-8. If the government imposes a price ceiling of $2 on this market, then there will be

If a tax is imposed on the buyers of a product, then the tax burden will fall entirely on the buyers.

Table 6-2 Price Quantity Denanded Quantity Sugplied \ 10 250 0 \ 5 200 75 \ 10 150 150 \ 15 100 225 \ 20 50 300 \ 25 0 375 -Refer to Table 6-2. A price ceiling set at $15 will

Advocates of the minimum wage

A tax on buyers decreases the quantity of the good sold in the market.

The presence of a price control in a market for a good or service usually is an indication that

Figure 6-9 -Refer to Figure 6-9. A price floor set at

A binding minimum wage may not help all workers, but it does not hurt any workers.

Which of the following is not a result of rent control?

If a tax is imposed on a market with inelastic supply and elastic demand, then

Rent-control laws dictate a minimum rent that landlords may charge tenants.

Figure 6-27 -Refer to Figure 6-27. If the government places a $2 tax in the market, the buyer bears $1 of the tax burden.

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Which of the following was not a result of the luxury tax imposed by Congress in 1990?

If a price floor is not binding, then it will have no effect on the market.