Exam 4: Supply and Demand: Applications and Extensions

The benefit of a subsidy will go primarily to sellers when the

Figure 4-17 Refer to Figure 4-17. Which of the following price controls would cause a shortage of 10 units of the good?

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

Figure 4-14 In Figure 4-14, which of the following is true at the price ceiling, P?

If a household has $40,000 in taxable income and its tax liability is $20,000, the household's average tax rate is

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

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

An increase in the demand for a product will cause the

When government gives a subsidy to buyers of good X, the benefits of the subsidy flow to

Use the figure below to answer the following question(s). Figure 4-9 Refer to Figure 4-9. The market for gasoline was initially in equilibrium at point b and a $.40 excise tax is illustrated. What does the triangular area abc represent?

Suppose the market equilibrium price of corn is $5 per bushel, and the government sets a price ceiling of $4 per bushel. What is the most likely result of this action?

Because of price controls in the former Soviet Union, people often waited in long lines for food and other necessities. Modern economic theory would indicate that, relative to price rationing, waiting in line is

Figure 4-22 Refer to Figure 4-22. The equilibrium price in the market before the tax is imposed is

If a $500 tax is placed legally (statutorily) on the sellers of new violins and as a result the price of violins to consumers rises by $400, then the actual burden of the tax

A law establishing a minimum legal price for a good or service (the minimum wage for example) is known as

When a government subsidy is granted to the buyers of a product, sellers can end up capturing some of the benefit because

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

Figure 4-22 Refer to Figure 4-22. 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 buyers of the good, rather than the sellers, are required to pay the tax to the government. Now,

The actual incidence (or burden) of a tax refers to

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