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In a labor market, supply is composed of which of the following groups?
a. Households
b. Firms
c. Government
d. Animal
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Assume the following:
price ceiling <equilibrium price
Which term corresponds to the inequality above?
a. surplus
b. insufficient funds
c. shortage
d. utopia
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Assume that there is a shortage in a market that is not eliminated through the price mechanism. What will happen to this shortage in the long run?
a. It will become smaller
b. It will remain constant size
c. It will become larger
d. It will disappear because the market will cease to exist
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Assume that there is a shortage in a market that is not eliminated through the price mechanism, instead, people decide how the shortage is addressed. The outcome is likely to be
a. unfair, but efficient
b. fair, but inefficient
c. fair and efficient
d. unfair and inefficient
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Assume the following:
- price floor > equilibrium price
Which term corresponds to the inequality above?
a. shortage
b. deficit
c. abundance
d. surplus
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A labor surplus is synonymous with
a. unemployment b. inflation
c. a strike
d. having too much work to do, but not enough time to do it
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Assume that the government imposes a tax on firms, but consumers effectively pay the tax. Then the firms bear the
a. economic tax incidence
b. legal tax incidence
c. political tax incidence
d. responsibility of apologizing to consumers
Assume that the government imposes a tax on firms, but consumers effectively pay the tax. Then the consumers bear the
a. legal tax incidence
b. responsibility to boycott the firms
c. responsibility to overthrow the owners of production and establish new firms that are pro-consumer
d. economic tax incidence
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Suppose the government implements a tax on a specific good that is imposed on the buyers. What can we expect to happen?
a. supply will increase (shift right)
b. demand will increase (shift right)c. demand will decrease (shift left)
d. supply will decrease (shift left)
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Suppose the government implements a tax on a specific good that is imposed on the sellers. What can we expect to happen?
a. Demand will increase (shift right)
b. supply will decrease (shift left)
c. supply will increase (shift right)
d. demand will decrease (shift left)
The ultimate outcome of a tax on a good, regardless of the legal tax incidence, will be
a. less money and more problems
b. a higher equilibrium price and a lower
equilibrium quantity c. a revolt against the government
d. a higher equilibrium price and a higher equilibrium quantity
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Assume the following:
- Price that buyers pay = $20
- Price that sellers receive = $15
What must be the value of the tax?
a. $35
b. -$5
c. $5
d. There is not enough information to determine this value
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Assume the following:
- Price that sellers receive = $30
- Tax = $10
What must the price that buyers pay equal?
a. $20
b. $10
c. $0
d. $40
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Which of the following determine how a tax burden is divided?
a. debt and income
b. politicians and bankers
c. demand shifters and supply shifters
d. elasticity of demand and elasticity of supply-
Assume the following:
- elastic supply
inelastic demand
If a tax is imposed in a market with the characteristics from above then who will bear most of the burden of the tax?
a. buyers
b. sellers
c. the top 1% of income earners
d. the top 10% of income earners
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