Exam 4: Supply and Demand: Applications and Extensions

The more elastic the supply of a product, the more likely it is that the burden of a tax will

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

Government programs such as Medicare substantially subsidize health care purchases by some consumers in the U.S. economy. Who benefits from these subsidies? How do they affect the price of health care? If you are not a recipient of this program, are you made better or worse off by the subsidy? Explain.

Economists have argued that rent control is "the best way to destroy a city, other than bombing." Why would economists say this?

Use the figure below to answer the following question(s). Figure 4-11 Refer to Figure 4-11. On the Laffer curve shown, tax revenue could be increased by

When a supply and demand model is used to analyze the market for labor,

Figure 4-25 Refer to Figure 4-25. The benefit to the government is

When a price floor is imposed above the equilibrium price of a commodity,

The Laffer curve illustrates the relationship between

Which of the following generalizations about the benefit of a subsidy is correct?

A minimum wage that is set above a market's equilibrium wage will result in

If the government wants to generate large revenues from placing a tax on the consumption of a particular good, it should choose a good for which

A price floor set above an equilibrium price tends to cause persistent imbalances in the market because

Which of the following would tend to increase the wage of coal miners?

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

In the supply and demand model, a subsidy granted to sellers is illustrated by

A price floor that sets the price of a good above market equilibrium will cause

Ava 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 Ava correct? Why or why not?

Figure 4-24 Refer to Figure 4-24. The amount of deadweight loss associated with the tax is equal to

Figure 4-20 Refer to Figure 4-20. The price that sellers receive after the tax is imposed is