Exam 4: Supply and Demand: Applications and Extensions

Figure 4-17 -Refer to Figure 4-17. Suppose a price ceiling of $4.50 is imposed. As a result,

Suppose that the federal government grants a 50 cent per gallon subsidy to buyers of gasoline and that the demand for gasoline is highly inelastic while the supply is highly elastic. Under these circumstances, the benefit of the subsidy

Which of the following examples illustrates a progressive income tax?

A $10 per unit government subsidy paid directly to sellers of heaters will result in

When several hurricanes hit Florida in 2004, a number of local governments imposed price controls that prevented sellers from raising their prices for badly needed products like plywood and generators. In the areas where the controls were imposed, they resulted in

How would an increase in the price of paper influence the market for college textbooks?

If Sophia's tax liability increases from $10,000 to $15,000 when her income increases from $30,000 to $40,000, her marginal tax rate is

Use the table below to choose the correct answer. The marginal tax rate on income in the $25,000 to $30,000 range is

Use the figure below illustrating the impact of an excise tax to answer the following question(s). Figure 4-6 -Refer to Figure 4-6. The amount of the excise tax I is

When a price floor is imposed above the equilibrium price of a commodity,

Which of the following generalizations about the burden of an excise tax is correct?

Figure 4-21 -Refer to Figure 4-21. The price received by sellers after the tax is imposed is

A tax on the buyers of coffee will

The Laffer Curve indicates that

Other things constant, as the price of a resource increases,

An income tax is defined as regressive if

Figure 4-22 -Refer to Figure 4-22. The price paid by buyers after the tax is imposed is

After a natural disaster, such as a hurricane, the increased demand for certain items (like lumber, electric generators, and chainsaws) causes their prices to rise. These higher prices

The large amount of violence associated with the current drug trade is mostly caused by

A law establishing a minimum legal price for a good or service (the minimum wage for example) is known as