ScienceEconomicsmicro test 2 example #66093
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micro test 2 example #66093

Luka Rivera avatar Luka Rivera
21 January 2024
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price paid by buyers in a market will decrease if the government
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decreased a binding price floor
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A legal minimum on the price at which a good can be sold is called
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Price floor
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the quantity sold in a market will decrease if the government
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increases the tax on the good
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if the government removes a binding price ceiling from a market then the price received by sellers will
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Increase and the quantity sold in the market will increase
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binding price ceilings
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cause shortages and are set below the equilibrium price
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if a price ceiling is a binding constraint on a market then
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buyers cannot buy all they want to buy at the price ceiling
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if a price floor is a binding constraint on a market then
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sellers cannot sell all they want to sell at the price floor
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the price paid by buyers in a market will increase if the government
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increases a binding price ceiling in that market
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rent control laws dictate
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a max rent landlords can charge
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if the minimum wage exceeds the equilibrium wage
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the quantity supplied of labor will exceed the quantity demanded
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the imposition of a binding price floor on a market
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causes quantity demanded to be less than quantity supplied
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if a tax is levied
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both sellers and buyers are worse off
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when pay roll tax is enacted
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the wage received by workers falls and wage paid by firms rises
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a tax burden falls more on the side of the market that is
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more inelastic
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congress intended
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half of the FICA tax be paid by the workers and half be paid by the firms
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the quantity sold in a market will decrease if the government decreases
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a binding price ceiling in that market
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if the government removes a tax on a good, then the price paid by buyers will
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decrease and the price received by sellers will increase
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a nonbonding price floor
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is set at a price below the equilibrium price
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the incidence of a tax falls more heavily on
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consumers than producers if demand is more inelastic than supply producers than consumers if supply is more inelastic than demand consumers that producers if supply is more elastic than demand
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the quantity sold in a marker will increase if the government
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decreases a binding price floor in that market
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workers determine the supply of labor
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firms determine the demand for labor
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a key determinant of the price elasticity of supply is
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time horizon
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when studying how some event or policy affects a market, elasticity provides information on the
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direction and magnitude of the effect
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income elasticity of demand measures how
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the quantity demanded changers as consumers income changes
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the price elasticity of demand changes as we move along a
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linear, downward sloping demand curve
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perfectly elastic
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horizontal
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perfectly inelastic
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vertical
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how does total revenues change as one moves downward and to the right alone a linear demand curve
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it first increases then decreases
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why was OPEC unable to maintain high oil prices in the long run
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demand and supply are both elastic in the long run compared to the short run
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a decrease in supply will cause the largest increase in price
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when both supply and demand are inelastic
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in which of these instances is deemed said to be perfectly inelastic
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a decrease in price of 2% causes an increase in quantity demanded of 0%
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for which pairs of goods Is the cross price elasticity most likely to be positive
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pens an pencils