Exam 4: A: Supply and Demand: Applications and Extensions

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?

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

An increase in the number of students attending college would tend to

A progressive tax is defined as a tax for which the

If Sally 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?

Deadweight losses are associated with

A tax imposed on the sellers of a good will

Which of the following statements is correct?

An income tax is progressive if the

Which of the following statements is true?

If the demand for a good is very price elastic, the imposition of a tax on that good

A tax imposed on the sellers of a good

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

Suppose that a tax is placed on textbooks. If the buyers end up bearing most of the tax burden, this indicates that the

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?

Kathy works full time during the day as an economist and faces a 60 percent marginal tax rate. If Kathy were to get an offer to work a second job in the evenings doing consulting work for a local business for $10,000 per year, how much of this additional income would she be able to keep as net pay after taxes?

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

In a market economy, which of the following would most likely cause a prolonged grain surplus?

The imposition of price ceilings on a market often results in

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?