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

Suppose a property tax of $300 per month is legally (statutorily) imposed on the owners of rental housing. Which of the following is likely to occur?

If there was an increase in the excise tax imposed on beer suppliers, what would be the effect on the equilibrium price and quantity of beer?

Which of the following will most likely result from rent controls that reduce monthly rental rates below market equilibrium?

An income tax is proportional if

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,

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

Which of the following characterizations is correct?

If a government price control succeeds in affecting price, it can be expected to lead to a corresponding

In the two decades following 1990, subsidized federal loans per full-time student more than tripled. Economic analysis indicates that this expansion in subsidies

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

A $10 per unit government subsidy paid directly to sellers of heaters will result in

Price controls will tend to cause misallocation of resources because

Which of the following is true?

When the top marginal tax rates were lowered substantially during the 1980s, the inflation-adjusted income tax revenue collected from the top 1 percent of all income earners

A subsidy is defined as

About 35,000 general aviation multiengine airplanes are licensed to operate in the United States. If an additional $1,000-per-year tax was levied on each plane to raise general revenue, economic thinking suggests the

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

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

Use the figure below to answer the following question(s). Figure 4-12 -Refer to Figure 4-12. The supply curve S and the demand curve D₁ indicate initial conditions in the market for college textbooks. A new government program is implemented that grants students a $30 per textbook subsidy on every textbook they purchase, shifting the demand curve from D₁ to D₂. Which of the following is true for this subsidy given the information provided in the exhibit?

The actual burden of a tax is determined primarily by