Exam 4: Supply and Demand: Applications and Extensions

An increase in the demand for a product will cause the

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

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

Figure 4-18 Refer to Figure 4-18. In this market, which of the following price controls would be binding?

Figure 4-22 Refer to Figure 4-22. Buyers pay how much of the tax per unit?

A black market is

Figure 4-3 Figure 4-3 indicates the demand ( D ) and supply ( S ) for the rental housing market in a large city. If the government imposed a price ceiling of a , which of the following would be true?

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. Suppose a price ceiling of $4.50 is imposed. As a result,

When prices of products are set below equilibrium,

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

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

A deadweight loss results from the imposition of a tax on a good because the tax

Which of the following is the most likely outcome of minimum wage laws?

The City of Greenville needs to raise revenue. Alderman Black has proposed a $10 tax on red cars in the city, currently numbering 2,000. Mayor White, who wants more than $20,000 in revenue, proposes taxing these cars at $100 each. Councilwoman Bluestone goes even farther, suggesting a $1,000 per red car tax, arguing that her proposal will raise $2 million. If maximizing tax revenue is the only consideration, which proposal should pass? Why?

Susan works as an advertising executive for a small business making $40,000 per year and is in a tax bracket with a 30 percent marginal rate. She currently purchases a $5,000 health insurance plan outside of her employer from her net pay. Her employer offers her the option to purchase the same health insurance plan on a pretax basis through the company (in other words, the cost of the health insurance is subtracted out of her gross pay before her taxes are computed). If she decides to do so, the purchase of the $5,000 health insurance plan through her employer would now only cost her how much in terms of a reduction in her net pay?

Both price floors and price ceilings, when effective, lead to

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

A $25 government subsidy paid directly to buyers of jeans will result in

Figure 4-24 Refer to Figure 4-24. The price that buyers pay after the tax is imposed is