Exam 4: Supply and Demand: Applications and Extensions

Data from the effects of the substantial tax rate reductions in the 1980s

How would a decrease in lumber prices influence the home construction market?

Figure 4-21 -Refer to Figure 4-21. The per-unit burden of the tax is

If an increase in the government-imposed minimum wage pushes the price (wage) of unskilled labor above market equilibrium, which of the following will most likely occur in the unskilled labor market?

Which tax rate measures the percent of your income paid in taxes?

When a government subsidy is granted to the buyers of a product, sellers can end up capturing some of the benefit because

Use the figure below to answer the following question(s). Figure 4-8 -Refer to Figure 4-8. How much revenue does the $40-per-ton tax generate for the government?

Suppose the U.S. Government banned the sale and production of cigarettes. What are likely effects of this action on the market for cigarettes?

A tax imposed on the sellers of a good will

In 2010 the federal government reduced the Social Security tax withholding rate from 12.4 percent (6.2 percent on both the employer and employee) to 8.4 percent (4.2 percent on both the employer and employee) on the wages of all workers. If the supply of labor is relatively inelastic when compared to the elasticity of the demand for labor, the burden of this tax will

Which of the following statements regarding black markets is true?

The state of Florida is considering putting an excise tax on either good X or good Y. An economist discovers the supply of good X is more elastic than the supply of good Y, while the demand elasticities are identical. Which good should Florida tax in order to minimize the deadweight loss of the tax?

Figure 4-18 -Refer to Figure 4-18. The price of the good would continue to serve as the rationing mechanism if

In a market economy, which of the following would most likely cause a prolonged grain surplus?

Use the figure below illustrating the impact of an excise tax to answer the following question(s). Figure 4-6 -The deadweight loss of the tax illustrated in Figure 4-6 is given by the area

If a household has $40,000 in taxable income and its tax liability is $4,000, the household's average tax rate is

Approximately 50,000 luxury boats (priced $100,000 or more) are currently produced each year. Using the economic way of thinking, how much revenue would the government actually generate with a $10,000 excise tax on luxury boats?

Figure 4-17 -Refer to Figure 4-17. If the government imposes a price ceiling in this market at a price of $5.00, the result would be a

Use the figure below illustrating the impact of an excise tax to answer the following question(s). Figure 4-6 -The revenue generated by the tax illustrated in Figure 4-6 is given by the area

Suppose the U.S. government banned the sale and production of cigarettes. Which of the following would be most likely to occur?