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Exam 4: Economic Efficiency, Government Price Setting, and Taxes

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Question 71

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What is the difference between a price ceiling and a price floor? Compared to the competitive equilibrium price, where must price ceilings and price floors be set to have an effect on the market.

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A price ceiling is a legally determined ...

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Question 72

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Suppose the demand curve for a product is horizontal and the supply curve is upward sloping.If a per-unit tax is imposed in the market for this product

A) sellers bear the entire burden of the tax.
B) the tax burden will be shared among the government, buyers, and sellers.
C) buyers bear the entire burden of the tax.
D) the tax burden will be shared by buyers and sellers.

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Question 73

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Figure 4-8 Figure 4-8 shows the market for beer.The government plans to impose a per-unit tax in this market. -Refer to Figure 4-8.The price buyers pay after the tax is

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.If the market price is $1.00, what is the maximum number of burritos that Arnold will buy?

Government intervention in agricultural markets in the U.S.began in the

Table 4-2 -Refer to Table 4-2.The table above lists the highest prices five consumers are willing to pay for a theater ticket.If the price of one ticket falls from $25 to $10,

Figure 4-5 Figure 4-5 shows the market for apartments in Springfield.Recently, the government imposed a rent ceiling of $1,000 per month. -Refer to Figure 4-5.Suppose that instead of a rent ceiling, the government imposed a price floor of $2,000 per month for apartments.What is the value of the portion of consumer surplus transferred to producers as a result of the price floor?

Figure 4-4 -Refer to Figure 4-4.The figure above represents the market for pecans.Assume that this is a competitive market.If the price of pecans is $3

What is a black market?

Figure 4-6 Figure 4-6 shows the demand and supply curves for the almond market.The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at Pf. -Refer to Figure 4-6.What area represents the deadweight loss after the imposition of the price floor?

The minimum wage is an example of a price ceiling.

Table 4-4 Table 4-4 shows the demand and supply schedules for the labor market in the city of Pixley. -Refer to Table 4-4.If a minimum wage of $11.50 an hour is mandated, what is the quantity of labor supplied?

By charging the equilibrium price for shared rides as opposed to the government-regulated price charged by traditional taxi companies, Uber has

Willingness to pay measures

Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia.What will be the likely effect on the market for sparkling wine in Vinyardia?

Table 4-4 Table 4-4 shows the demand and supply schedules for the labor market in the city of Pixley. -Refer to Table 4-4.If a minimum wage of $12.50 is mandated there will be a

Figure 4-2 -Refer to Figure 4-2.What area represents producer surplus at a price of P₂?

Figure 4-8 Figure 4-8 shows the market for beer.The government plans to impose a per-unit tax in this market. -Refer to Figure 4-8.How much of the tax is paid by sellers?

Figure 4-8 Figure 4-8 shows the market for beer.The government plans to impose a per-unit tax in this market. -Refer to Figure 4-8.For each unit sold, the price sellers receive after the tax (net of tax) is

Figure 4-4 -Refer to Figure 4-4.The figure above represents the market for pecans.Assume that this is a competitive market.If 4,000 pounds of pecans are sold