Exam 6: Government Actions in Markets

How does a production quota influence farm prices and output?

-The above figure shows the apartment rental market in Bigtown. If there is a shortage of 200,000 apartments in the Bigtown rental market, it might be because the Bigtown Housing Authority has imposed a rent

-The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $800, there is

-The above figure shows the market for neckties after the government has imposed a tax. How much government revenue is generated by the tax?

-In the above figure, what is the total tax revenue collected by the government?

A minimum wage ________.

-In the above figure, without a minimum wage, the equilibrium quantity of labor employed ________ million hours, and the equilibrium wage rate is ________ per hour.

A production quota set below the equilibrium quantity creates

If a production quota is set below the equilibrium quantity, at the quota quantity, marginal benefit is ________ marginal cost and the level of production is ________.

The Social Security tax is a tax that Congress imposes equally on both employers and employees. Does this mean that the burden of this tax is shared equally between firms and workers? Explain.

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. Using the figure, how much tax revenue does the government raise?

-You are in the business of producing and selling hamburgers, french fries, pizza, and ice cream. The mayor plans to impose a tax on one of these products. Based on the elasticities in the above table, on which of these goods would your customers least like to be taxed?

If penalties are imposed on the sellers of illegal goods or services, then the equilibrium price ________ and the equilibrium quantity ________.

Is the minimum wage an example of a price floor or a price ceiling? Why?

A minimum wage set above the equilibrium wage I. increases the supply of labor. II) increases the quantity of labor supplied. III) decreases the demand for labor.

-In the figure above, if a tax of $2 per widget is imposed on sellers, then the after-tax amount per widget received by the seller will be

In the 1980s, one of the most common sights in the socialist countries, such as the former Soviet Union and North Korea, were long lines for bread, sugar, and other necessities. These countries had price ceilings on these necessities. Some of the socialist nations, such as the former Soviet Union, have moved to a market economy by lifting the price ceilings, while others, such as North Korea, have retained their price ceilings. What prediction do you make about the presence (or absence) of long lines today in the former Soviet Union and North Korea? Explain your answer.

-In the table above, what is the equilibrium wage rate in an unregulated market?

-The figure above shows the housing market in the city of Appleville. A rent ceiling of $650 per month is imposed. With the rent ceiling, the quantity of housing rented in Appleville is

-In the above figure, what is the amount of the tax per compact disc?