Exam 4: Supply and Demand: Applications and Extensions

Suppose that the minimum wage was increased to $10 per hour. Which of the following would be most likely to result from the minimum wage increase?

A law establishing a maximum legal price for a good or service (rent controls for example) is known as

Which of the following statements is correct?

If there was an increase in the excise tax on beer, what would be the effect on the equilibrium price and quantity of beer?

The "incidence of a tax" is the term used to indicate

If a $50 subsidy is legally (statutorily) granted to the sellers of exercise equipment and as a result the price of exercise equipment to consumers falls by $30, the actual benefit of the subsidy

A subsidy on a product will generate more actual benefit for consumers (and less for producers) when

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

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

If Susan's income increases from $40,000 to $50,000 and her tax liability increases from $6,000 to $9,000, which of the following is true?

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 tax were redefined such that the entire 12.4 percent was statutorily levied on employers, economic analysis suggests that the actual burden of the tax would

Joanne states, "If raising the minimum wage to $10 an hour is good, like Senator Largess suggests, then raising it to $20 an hour would be twice as good." Is Joanne correct? Why or why not?

Exempting teenagers from the minimum wage would probably cause

Figure 4-22 Refer to Figure 4-22. The effective price sellers receive after the tax is imposed is

Ron works full time as a teacher making $50,000 while his wife Ellen stays at home taking care of their two children. Ron's income puts the family in a tax bracket with a 40 percent marginal tax rate. Ellen receives a full-time job offer as an administrative assistant making $30,000 per year, however to take the job would require the family to start paying $8,000 per year in child care expenses. If Ellen were to accept the job offer, after paying taxes and subtracting child care expenses, by how much would the family's net disposable income increase?

Figure 4-2 Given the demand and supply conditions shown in Figure 4-2, if the government imposes a price ceiling of a , indicate the quantity consumers would like to buy and the amount producers would be willing to supply.

Figure 4-24 Refer to Figure 4-24. The per-unit burden of the tax on sellers is

Which one of the following will most likely be harmed by legislation exempting teenagers from the minimum wage?

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

Use the figure below to answer the following question(s). Figure 4-4 Given the demand and supply conditions shown in Figure 4-4, what will happen as the result of imposing a price ceiling of a ?