Exam 6: Supply, Demand, and Government Policies

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

Which of the following causes a shortage of a good?

The burden of a luxury tax falls

A price floor is a legal minimum on the price at which a good or service can be sold.

A tax on sellers usually causes buyers to pay more the good and sellers to receive less for the good than they did before the tax was levied.

If the government removes a binding price ceiling from a market,then the price paid by buyers will

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

A price floor will be binding only if it is set

One economist has argued that rent control is "the best way to destroy a city,other than bombing." Why would an economist say this?

The term tax incidence refers to how the burden of a tax is distributed among the various people who make up the economy.

When a binding price floor is imposed on a market to benefit sellers,

The quantity sold in a market will decrease if the government

Suppose that a tax is placed on books.If the sellers pay the majority of the tax,then we know that the

The price paid by buyers in a market will increase if the government

Figure 6-12 -Refer to Figure 6-12.The price paid by buyers after the tax is imposed is

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

A tax on buyers will

When a tax is placed on the sellers of lemonade,

If the government wants to reduce smoking,it should impose a tax on

When a tax is placed on the sellers of a product,