Exam 6: Supply, Demand, and Government Policies

If a good or service is sold in a competitive market free of government regulation,then the price of the good or service adjusts to balance supply and demand.

Figure 6-17 -Refer to Figure 6-17.A price floor set at $40 would result in a surplus of 20 units.

If the government levies a $500 tax per car on sellers of cars,then the price received by sellers of cars would

Which of the following is correct?

If a price ceiling is not binding,then

The price received by sellers in a market will decrease if the government

If a binding price floor is imposed on the video game market,then

Whether a tax is levied on sellers or buyers,buyers and sellers usually share the burden of taxes.

The tax burden falls more heavily on the side of the market that is more inelastic.

When a free market for a good reaches equilibrium,anyone who is willing and able to sell at the market price can sell the good.

In 1990,Congress passed a new luxury tax on items such as yachts,private airplanes,furs,jewelry,and expensive cars.The goal of the tax was to

Using a supply and demand diagram,show a labor market with a binding minimum wage.Use the diagram to show those who are helped by the minimum wage and those who are hurt by the minimum wage.

Figure 6-10 -Refer to Figure 6-10.The price paid by buyers after the tax is imposed is

Figure 6-10 -Refer to Figure 6-10.The effective price received by sellers after the tax is imposed is

A price ceiling set above the equilibrium price is not binding.

A binding minimum wage raises the incomes of those workers who have jobs,but it lowers the incomes of workers who cannot find jobs.

Suppose the government has imposed a price floor on cellular phones.Which of the following events could transform the price floor from one that is binding to one that is not binding?

Figure 6-2 Panel (a)Panel (b) -Refer to Figure 6-2.In panel (b),there will be

Figure 6-14 -Refer to Figure 6-14.Suppose a tax of $2 per unit is imposed on this market.How much will buyers pay per unit after the tax is imposed?

Congress intended that