Exam 6: Supply, Demand, and Government Policies

Figure 6-31 -Refer to Figure 6-31. If the government set a price floor at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

Which of the following is not correct?

Figure 6-26 -Refer to Figure 6-26. The effective price received by sellers after the tax is imposed is

The tax burden will fall most heavily on sellers of the good when the demand curve

Figure 6-9 -Refer to Figure 6-9. At which price would a price floor be binding?

In a particular market, market demand is given by the equation and market supply is given by the equation Suppose a per-unit tax is imposed that reduces the number of units bought and sold in the market to 25 units. What is the size of the tax, and who bears the greater burden of the tax, buyers or sellers?

Figure 6-14 -Refer to Figure 6-14. If the horizontal line on the graph represents a price ceiling, then the price ceiling is

Price floors are typically imposed to benefit buyers.

Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The per-unit burden of the tax on sellers is

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell. Further, suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle. Which of the following statements is correct?

A binding price floor causes a shortage in the market.

Using the graph shown, answer the following questions. a. What was the equilibrium price in this market before the tax? b. What is the amount of the tax? c. How much of the tax will the buyers pay? d. How much of the tax will the sellers pay? e. How much will the buyer pay for the product after the tax is imposed? f. How much will the seller receive after the tax is imposed? g. As a result of the tax, what has happened to the level of market activity?

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

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?

Which of the following is not a function of prices in a market system?

A price ceiling set below the equilibrium price is nonbinding.

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

Figure 6-6 -Refer to Figure 6-6. Which of the following statements is correct?

Figure 6-8 -Refer to Figure 6-8. If the government imposes a price floor of $5 on this market, then there will be

A binding minimum wage