Exam 4: Supply and Demand: Applications and Extensions

Suppose that a tax is placed on a particular good. If the buyers end up bearing most of the tax burden, this indicates that the

The actual incidence (or burden) of a tax refers to

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

The General Theory of John Maynard Keynes exerted a major impact on macroeconomics during the 20^th century primarily because

Figure 4-20 -Refer to Figure 4-20. The burden of the tax on sellers is

Suppose that the federal government levies a 50 cent excise tax on gasoline and that the demand for gasoline is highly inelastic while the supply is highly elastic. Under these circumstances, the burden of the tax

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

Which of the following is the most likely result of an increase in the minimum wage?

Use the figure below to answer the following question(s). Figure 4-9 -Refer to Figure 4-9. The market for gasoline was initially in equilibrium at point b. If a $.40 excise tax was imposed,

Lowincomesville is a poor town. The mayor has decided to impose a law to cut all rental rates on apartments in half and to fix them at this level. Will this help the poor? Why or why not? Be sure to distinguish between the short run and the long run.

Figure 4-1 -Figure 4-1 illustrates the market for compact discs. If the government imposes a price floor of $25 for compact discs, which of the following will be true?

In his book The Road to Serfdom, Friedrich Hayek argued that the growth of government

The actual burden of a tax is determined primarily by

A progressive tax is defined as a tax for which the

Figure 4-23 -Refer to Figure 4-23. In which market will the majority of the tax burden fall on the buyer?

Other things constant, a decrease in the demand for hair dryers will

When government imposes price controls in a market,

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

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

An increase in the number of students graduating with a major in psychology would result in