Exam 6: Supply, Demand, and Government Policies

Table 6-4 The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $3 above the equilibrium price in this market. -Refer to Table 6-4. How many units of the good are sold after the imposition of the price floor?

An alternative to rent-control laws that would not reduce the quantity of housing supplied is

Regardless of whether a tax is levied on sellers or buyers, taxes discourage market activity.

Figure 6-29 Suppose the government imposes a $2 on this market. -Refer to Figure 6-29. Suppose D1 represents the demand curve for paperback novels, D2 represents the demand curve for gasoline, and S1 represents the supply curve for paperback novels and gasoline. After the imposition of the $2 on paperback novels and on gasoline, the

Opponents of the minimum wage point out that the minimum wage

The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

A tax imposed on the sellers of a good will lower the

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

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

A price floor set below the equilibrium price causes a surplus in the market.

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

When a binding price ceiling is imposed on a market,

Figure 6-8 -Refer to Figure 6-8. When a certain price control is imposed on this market, the resulting quantity of the good that is actually bought and sold is such that buyers are willing and able to pay a maximum of P1 dollars per unit for that quantity and sellers are willing and able to accept a minimum of P2 dollars per unit for that quantity. If P1 - P2 = $3, then the price control is

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

To say that a price floor is binding is to say that the price floor

In "Venezuela Versus the Market," the price control placed on coffee

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

Figure 6-25 -Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that

Table 6-6 -Refer to Table 6-6. If the government set a price ceiling at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?