Mic Tut 5

The imposition of a binding price ceiling on a market causes quantity demanded to be

• greater than quantity supplied.

• less than quantity supplied.

• equal to quantity supplied.

• Both (a) and (b) are possible.

A price floor will be binding only if it is set

• equal to the equilibrium price.

• above the equilibrium price.

• below the equilibrium price.

• either above or below the equilibrium price.

If a binding price floor is imposed on the video game market, then

• the demand for video games will decrease.

• the supply of video games will increase.

• a surplus of video games will develop.

• All of the above are correct.

An outcome that can result from either a price ceiling or a price floor is

• an enhancement of efficiency.

• undesirable rationing mechanisms.

• a surplus.

• a shortage.

A tax on the sellers of coffee will

• increase the price of coffee paid by buyers, increase the effective price of coffee received by sellers, and increase the equilibrium quantity of coffee.

• increase the price of coffee paid by buyers, increase the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.

• increase the price of coffee paid by buyers, decrease the effective price of coffee received by sellers, and increase the equilibrium quantity of coffee.

• increase the price of coffee paid by buyers, decrease the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.

When a tax is placed on the sellers of cell phones,

• the size of the cell phone market and the price paid by buyers both increase.

• the size of the cell phone market increases, but the price paid by buyers decreases.

• the size of the cell phone market decreases, but the price paid by buyers increases.

• the size of the cell phone market and the price paid by buyers both decrease.

The price paid by buyers in a market will decrease if the government

• imposes a binding price floor in that market.

• increases a binding price ceiling in that market.

• increases a tax on the good sold in that market.

• decreases a binding price floor in that market.

Suppose that the demand for picture frames is elastic and the supply of picture frames is inelastic. A tax of $1 per frame levied on picture frames will increase the price paid by buyers of picture frames by

• less than $0.50.

• $0.50.

• between $0.50 and $1.

• $1.

If a tax shifts the supply curve downward (or to the right), we can infer that the tax was levied on

• buyers of the good.

• sellers of the good.

• both buyers and sellers of the good.

• We cannot infer anything because the shift described is not consistent with a tax.

If a tax shifts the supply curve downward (or to the right), we can infer that the tax was levied on

• buyers of the good.

• sellers of the good.

• both buyers and sellers of the good.

• We cannot infer anything because the shift described is not consistent with a tax.