Question 6 In a market with a binding price ceiling, an increase in the ceiling will quantity supplied, the the quantity demanded, and reduce the ----- decrease, increase, surplus decrease, increase, shortage Increase, decrease, surplus O increase, decrease, shortage Question 7 If the government places a tax of $500 on luxury cars, what happens in the market? Please assume demand and supply that are "normal" i.e. not completely elastic and not completely inelastic. Demand is downward sloping and supply upward sloping :) The price goes up by more than $500, and quantity sold goes up The price goes up by more than $500, and quantity sold goes down The price goes up by less than $500, and quantity sold goes up The price goes up by less than $500, and quantity sold goes down

Question 6 In a market with a binding price ceiling, an increase in the ceiling will quantity supplied, the the quantity demanded, and reduce the ----- decrease, increase, surplus decrease, increase, shortage Increase, decrease, surplus O increase, decrease, shortage Question 7 If the government places a tax of $500 on luxury cars, what happens in the market? Please assume demand and supply that are "normal" i.e. not completely elastic and not completely inelastic. Demand is downward sloping and supply upward sloping :) The price goes up by more than $500, and quantity sold goes up The price goes up by more than $500, and quantity sold goes down The price goes up by less than $500, and quantity sold goes up The price goes up by less than $500, and quantity sold goes down

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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