Exam 6: Supply, Demand and Government Policies

A binding price floor in a competitive market will result in persistent shortages of a product.

Suppose a price ceiling is imposed on rice but this is above the equilibrium price. This will result in the quantity supplied of rice exceeding the quantity demanded.

Graph 6-9 -Refer to Graph 6-9. In which market will the majority of a tax be paid by the buyer?

A binding price ceiling allows consumers to buy all the goods they demand at a lower price.

How does elasticity affect the burden of a tax? Justify your answer using supply-demand diagrams.

A price floor is not binding if:

A binding minimum wage in a competitive labour market creates unemployment.

The initial impact of a tax on the sellers of a product is on:

If the minimum wage is below the equilibrium wage:

Some developing countries have used price ceilings to keep rice cheap to assist the poor. At the ceiling price:

A legal minimum price at which a good can be sold is a price:

Which of the following is NOT a mechanism of rationing used by landlords in cities with rent control?

A legal maximum price at which a good can be sold is a price:

A binding price ceiling in the computer market will cause:

If buyers are required to pay a $0.20 tax on each cup of coffee, the demand for coffee will shift:

The main reason policymakers use price controls is because:

Opponents of the minimum wage note that a high minimum wage creates unemployment, causes teenagers to drop out of school and prevents some unskilled workers from getting the on-the-job training that they need.

Which of the following is a correct statement about the labour market?

A price floor is a legal minimum on the price of a good or service.

If a price ceiling price is set above the equilibrium price: