Exam 6: Supply, Demand, and Government Policies

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

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

Table 6-2 -Refer to Table 6-2. A price ceiling set at $5 will

The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor proposes to collect half the tax from workers and half the tax from firms. Workers will bear

Figure 6-35 -Refer to Figure 6-35. A price floor set at $40 would create a surplus of 20 units.

A key lesson from the payroll tax is that the

Which of the following would be the least likely result of a binding price ceiling imposed on the market for rental cars?

The term tax incidence refers to

Which of the following is not a short-run effect of rent control on the housing market?

If a tax is levied on the buyers of a product, then there will be a(n)

Figure 6-8 -Refer to Figure 6-8. If the government imposes a price ceiling of $2 on this market, then there will be

Which of the following is correct? Price controls

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Figure 6-23 -Refer to Figure 6-23. The price paid by buyers after the tax is imposed is

Advocates of the minimum wage admit that it has some adverse effects, but they believe that these effects are small and that a higher minimum wage makes the poor better off.

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

FICA is an example of a payroll tax, which is a tax on the wages that firms pay their workers.

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $7.25 is

A binding price floor

A binding price ceiling