Exam 4: Supply and Demand: Applications and Extensions

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

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

Which of the following statements about rent control is accurate?

Figure 4-20 Refer to Figure 4-20. The amount of the tax per unit is

The Laffer curve illustrates the principle that

Kathy works full time during the day as an economist and faces a 60 percent marginal tax rate. If Kathy were to get an offer to work a second job in the evenings doing consulting work for a local business for $10,000 per year, how much of this additional income would she be able to keep as net pay after taxes?

Compared to legal markets, black markets have

Use the figure below to answer the following question(s). Figure 4-7 Refer to Figure 4-7. The supply curve S ₁ and the demand curve D indicate initial conditions in the market for gasoline. A $.60-per-gallon excise tax on gasoline is levied, which shifts the supply curve from S ₁ to S ₂. Which of the following states the actual burden of the tax?

If the government wants to raise tax revenue and shift most of the tax burden to the sellers it would impose a tax on a good with a

Figure 4-20 Refer to Figure 4-20. Suppose the same S and D curves apply, and a tax of the same amount per unit as shown here is imposed. Now, however, the sellers of the good, rather than the buyers, are required to pay the tax to the government. Now, relative to the case depicted in the figure,

Taxes create deadweight losses because they

The Laffer curve illustrates the concept that

If a $300 subsidy is legally (statutorily) granted to the buyers of computers and as a result the selling price of computers rises by $200, the actual benefit of the subsidy

An increase in the demand for a product will cause output to

When a price ceiling prevents a higher market price from rationing a good,

Use the table below to choose the correct answer. For the income range illustrated, the tax shown here is

The term "deadweight loss" or "excess burden" is used to describe the

If Neleh's income increases from $60,000 to $80,000 and her tax liability increases from $12,000 to $16,000, which of the following is true?

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

An excise tax levied on a product will impose a smaller relative burden on consumers (and a larger relative burden on sellers) when