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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USD.13 An increase in a price ceiling will change the amount of a good sold in a market: Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a if the price ceiling is effective. b regardless of whether or not the ceiling is effective. c if the price ceiling is ineffective. d if demand is inelastic.
Suppose that the Australian government imposes a sales tax on a product and both buyers and sellers share the burden of the If the price elasticity of demand for the product is perfectly inelastic. Which of the following is true? Select one: a. Sellers would pay more of the tax than buyers. b. Buyers would pay all of the tax. c. Buyers and sellers would share the tax burden equally. d. Sellers would pay all the tax.
37. Which of the following factor is affecting supply negatively? a. Tax b. Technology c. Subsidy d. Favorable climate
4-3 In each of the following instances, determine whether demand is elastic, inelastic, or unit-elastic. If price increases by 10 percent and quantity demanded decreases by 10 percent, demand is _______. If price decreases by 10 percent and quantity demanded increases by 5 percent, demand is _______.
If the government imposes a price ceiling at $14, and the equilibrium price is at $10 in this market, the result would be a. A shortage b. A surplus c. A new equilibrium price d. Neither a surplus or a shortage
Suppose we instead tax the consumer rather than the driver. What happens in new equilibrium compared to when the driver pays the tax? A B Consumers pay more, cab owners earn more Consumers pay more, cab owners earn the same Consumers pay the same, cab owners earn the same Consumers pay less, cab owners pay the same Fare (per ride) Excise tax -$2 per ride $7.00 6.00 5.00 4.00 3.00 0 11 Supply curve shifts upword by the amount of the tax 6 d 8 S₂ 12 S₁ 10 14 Quantity of rides (millions per year)
The Indian government places a Rs. 1,000 tax on smart phones, will the price paid by consumers raise by more than Rs. 1,000, less than Rs. 1,000 or exactly Rs. 1,000? Explain.
Give typing answer with explanation and conclusion In an effort to curb planetary obesity, authorities levy a tax of $20 per unit of lunar candy. How much of this tax is borne by the sellers? That is, by how much does the seller’s price change? demand - q = 600 − 2p supply - q = 2p − 400 Equilibrium price - 250 Equilibrium Quantity- 100 Use the equation Ps= Pd+ Tax to solve ANSWER IS 10
Illustrate and explain using a diagram how to imposition of an excise tax on petrol at the time of purchase A) affect the equilibrium price and quantity of petrol B) how the cost of this tax is distributed between the buyers and sellers C) illustrate and explain by using a diagram who will pay the cost of this petrol excise tax if demand for petrol is perfectly price inelastic.
A sales tax is imposed on good A. The supply of good A is not perfectly elastic or perfectly inelastic. Suppose that the demand for good A becomes more inelastic. (a) Will the tax burden on sellers increase or decrease? (b) Will the DWL increase or decrease?
Question 2 The demand and supply of widgets is given belowQ is quantity, and P is price of widgets Q-1000-2P Q-500+3P aHow much is equilibrium quantity and equilibrium price (show me your work) bIf there is a price control of $50 imposed by the government for widgets, how much shortage is there in the economyWhat type of price control is this called? c. Draw the Demand and Supply graphsshow equilibrium pricequantity points and on the same graph show price control points
The figure below represents the market for Gasoline, where initially the equilibrium price was $5.60. The picture shows the effect of a $1.50 tax on gasoline. Using the information from the figure, what is the price elasticity of supply(Using the Midpoint method) when moving from equilibrium to the new supply after the tax?(round your answer to 2 decimal places)