ECON 2143 Homework 4: Chapter 7 UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS

ECON 2143 Homework 4: Chapter 7
UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
The figure illustrates the bagel market. Which of the following statements is correct?

A.

With no government intervention, the equilibrium price of a bagel is $2.
B.

With a price ceiling of $3.00 per bagel, the price of a bagel is $2.

C.

With a price ceiling of $1.00 per bagel, the price of a bagel is $1.

D.

Only answers A and B are correct.

E.

Answers A, B, and C are correct. - CORRECT ANSWER E



Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic. So,
imposing a tax on the good results in a ________ in the price received and kept by sellers and
a ________ in the price paid by buyers. - CORRECT ANSWER fall, rise



When a tax is imposed on a good or service, the - CORRECT ANSWER deadweight
loss that arises from a tax is the excess burden.



The figure shows the labor market in a region. For a minimum wage to change the wage rate
and amount of employment, it must be - CORRECT ANSWER set above $6 an hour.



If a $10 sales tax is imposed on a good and the equilibrium price increases by $10, the tax is -
CORRECT ANSWER paid fully by buyers.