Exam 6: Supply Demand and Government Policies: Part A

Figure 6-32 -Refer to Figure 6-32.If the government set a price floor at $55,would there be a shortage or surplus,and how large would be the shortage/surplus?

If the demand curve is more price elastic than the supply curve,will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Figure 6-32 -Refer to Figure 6-32.If the government set a price floor at $70,would there be a shortage or surplus,and how large would be the shortage/surplus?

If the supply curve is more price elastic than the demand curve in a particular market,will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Scenario 6-2 Suppose demand for a product is given by the equation and supply for the product is given by the equation -Refer to Scenario 6-2.What are the equilibrium price and equilibrium quantity in the market for this product?

Figure 6-33 -Refer to Figure 6-33.Suppose a $3 per-unit tax is imposed on the sellers of this good.How much is the burden of this tax on the buyers in this market?