Exam 4: Supply and Demand: Applications and Extensions

Other things constant, how will a decrease in the wages of teenagers affect the market for fast food hamburgers?

If a government imposed price ceiling legally sets the price of beef below market equilibrium, which of the following will most likely happen?

Suppose the U.S. Government banned the sale and production of cigarettes. What are likely effects of this action on the market for cigarettes?

Figure 4-20 Refer to Figure 4-20. The equilibrium price in the market before the tax is imposed is

Suppose the federal excise tax rate on gasoline is increased by 50 percent. Which of the following is the most likely impact on the tax revenue derived from the federal gas tax?

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

If the supply of health care services is highly inelastic, programs that subsidize the cost of purchasing medical services will

Which of the following statements regarding black markets is true?

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.

The Laffer curve illustrates the concept that

If political officials want to minimize the excess burden accompanying a tax, they should set the tax at a rate

If Aisha were to get a $3,000 bonus from her employer, which of the following tax rates would most accurately reflect the percent of this additional income that she would owe in taxes?

The average tax rate is defined as

Use the figure below to answer the following question(s). Figure 4-10 Refer to Figure 4-10. The accompanying graph shows the market for a good before and after an excise tax is imposed. The total tax revenue generated is indicated by

Use the figure below to answer the following question(s). Figure 4-8 Refer to Figure 4-8. The supply curve S₁ and the demand curve D indicate initial conditions in the market for soft coal. A $40-per-ton tax on soft coal is levied, shifting the supply curve from S₁ to S₂. Which of the following states the actual burden of the tax?

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

An effective minimum wage

Suppose that the federal government grants a 50 cent per gallon subsidy to buyers of gasoline and that the demand for gasoline is highly inelastic while the supply is highly elastic. Under these circumstances, the benefit of the subsidy

Figure 4-25 Refer to Figure 4-25. After the tax is levied, producer surplus is represented by area

Figure 4-20 Refer to Figure 4-20. As the figure is drawn, who sends the tax payments to the government?