Exam 4: Asupply and Demand: Applications and Extensions

Which of the following is a major disadvantage of setting the price of a good below equilibrium and using waiting in line rather than price to ration the good?

Use the figure below to answer the following question(s). Figure 4-8 -Refer to Figure 4-8.How much revenue does the $40-per-ton tax generate for the government?

The average tax rate (ATR)is defined as

Figure 4-15 -In Figure 4-15,suppose a price floor is established at $20.00.What is the result?

If a $5,000 tax is placed legally (statutorily)on the sellers of new automobiles and as a result the price of automobiles to consumers rises by $4,000,then 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

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

Lowincomesville,North Carolina,is a poor town.The mayor has decided to impose a law to cut all rental rates on apartments in half and to fix them at this level.Will this help the poor? Why or why not? Be sure to distinguish between the short run and the long run.

When a price floor is above the equilibrium price,

When a subsidy program allocates subsidies to a subset of the population,the result is greater demand and higher prices in the market where purchases are subsidized,raising costs for

Use the figure below illustrating the impact of an excise tax to answer the following question(s). Figure 4-6 -Refer to Figure 4-6.The amount of the actual tax burden paid by consumers and producers is

Whenever a shortage occurs (for example,in parking spaces),and the price does not rise or is not permitted to rise,some method of non-price rationing must occur (for example,driving around looking for a parking space).Which of the following is an advantage of price rationing relative to non-price rationing methods?

With a price ceiling above the equilibrium price,

Figure 4-23 -Refer to Figure 4-23.In which market will the majority of the tax burden fall on the seller?

When a tax is levied on the sale of an item,

Suppose the demand curve for a good is highly elastic and the supply curve is highly inelastic.If the government taxes this good,

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

A progressive tax

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

Both price floors and price ceilings lead to