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1694 Supply, Demand, and Government Policies
12.
Refer to Figure 6-31. If the government set a price floor at $17, would there be a shortage or
surplus, and how
large would be the shortage/surplus?
Figure 6-32
13.
Refer to Figure 6-32. If the government set a price ceiling at $40, would there be a shortage or
surplus, and how
large would be the shortage/surplus?
14.
Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or
surplus, and how
large would be the shortage/surplus?
15.
Refer to Figure 6-32. If the government set a price ceiling at $50, would there be a shortage or
surplus, and how
large would be the shortage/surplus?
16.
Refer to Figure 6-32. If the government set a price floor at $70, would there be a shortage or
surplus, and how
large would be the shortage/surplus?
17.
Refer to Figure 6-32. If the government set a price floor at $55, would there be a shortage or
surplus, and how
large would be the shortage/surplus?
Scenario 6-1
Suppose that demand in the market for good X is given by the equation
and that supply in the market for good X is given by the equation
18.
Refer to Scenario 6-1. What are the equilibrium price and quantity in the market for good X?
19.
Refer to Scenario 6-1. If the government set a price ceiling at $8, would there be a shortage or
surplus, and how
large would be the shortage/surplus?
20.
Refer to Scenario 6-1. If the government set a price ceiling at $12, would there be a shortage or
surplus, and how
large would be the shortage/surplus?
21.
Refer to Scenario 6-1. If the government set a price floor at $13, would there be a shortage or
surplus, and how
large would be the shortage/surplus?
22.
Refer to Scenario 6-1. If the government set a price floor at $7, would there be a shortage or
surplus, and how
large would be the shortage/surplus?
Scenario 6-2
Suppose demand for a product is given by the equation
and supply for the product is given by the equation
23.
Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for
this product?
24.
Refer to Scenario 6-2. Suppose the government sets a price ceiling at $12 for this product. Is
this price ceiling
binding, and what will be the size of the shortage/surplus in this market?
25.
Refer to Scenario 6-2. Suppose the government sets a price ceiling at $17 for this product. Is
this price ceiling
binding, and what will be the size of the shortage/surplus in this market?
26.
Refer to Scenario 6-2. Suppose the government sets a price floor at $13 for this product. Is this
price floor binding,
and what will be the size of the shortage/surplus in this market?
27.
Refer to Scenario 6-2. Suppose the government sets a price floor at $13 for this product.
Initially, is this price floor
binding? Suppose that for some reason demand were to decrease to
Would the $13 price floor be binding after the shift in the demand curve? If so, what is the size of
the resulting
shortage/surplus?
28.
The following table shows the demand and supply schedules in a particular market.
Price
Quantity
Demanded
Quantity
Supplied
$1
8
3
$3
6
6
$5
4
9
$7
2
12
$9
0
15
If the government sets a price floor $2 above the equilibrium price, how many units will be sold in
this market?
1702 Supply, Demand, and Government Policies
Table 6-6
Price ($)
Quantity
Demanded
Quantity
Supplied
0
21
0
1
18
4
2
15
8
3
12
12
4
9
16
5
6
20
6
3
24
7
0
28
29.
Refer to Table 6-6. If the government set a price ceiling at $2, would there be a shortage or
surplus, and how large
would be the shortage/surplus?
30.
Refer to Table 6-6. If the government set a price ceiling at $4, would there be a shortage or
surplus, and how large
would be the shortage/surplus?
31.
Refer to Table 6-6. If the government set a price floor at $4, would there be a shortage or
surplus, and how large
would be the shortage/surplus?
32.
Refer to Table 6-6. If the government set a price floor at $2, would there be a shortage or
surplus, and how large
would be the shortage/surplus?
33.
Refer to Table 6-6. In this market, over what range of prices would a price ceiling set by the
government be
binding?
34.
Refer to Table 6-6. In this market, over what range of prices would a price floor set by the
government be
binding?
Figure 6-33
35.
Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What
price will buyers pay
for the good after the tax is imposed?
36.
Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How
much is the burden of
this tax on the buyers in this market?
37.
Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What is
the effective price
that sellers will receive for the good after the tax is imposed?
38.
Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How
much is the burden of
this tax on the sellers in this market?
39.
Refer to Figure 6-33. Suppose a $4 per-unit tax is imposed on the sellers of this good. How
many units of this
good will be sold after the tax is imposed?
Figure 6-34
40.
Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how many
units will be bought
and sold in the market after the tax is imposed?
41.
Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much
will sellers receive
per unit after the tax is imposed?
42.
Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, what price
will buyers pay per
unit after the tax is imposed?
43.
Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much
is the burden of the
tax on the buyers in this market?
44.
Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much
is the burden of the
tax on the sellers in this market?
45.
Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, who will
bear the greater
burden of the tax - the buyers, the sellers, or will the burden be shared equally?
46.
In a particular market, market demand is given by the equation
and market supply is given by the equation
Suppose a per-unit tax is imposed that reduces the number of units bought and sold in the market
to 25 units. What is
the size of the tax, and who bears the greater burden of the tax, buyers or
sellers?
47.
If the demand curve is more price elastic than the supply curve in a particular market, will the
buyers or the sellers
bear a larger burden of a per-unit tax imposed on the market?
48.
If the supply curve is more price elastic than the demand curve in a particular market, will the
buyers or the sellers
bear a larger burden of a per-unit tax imposed on the market?
49.
If the demand curve is more price elastic than the supply curve, will the buyers or the sellers
bear a greater burden
of a tax? Draw a diagram to illustrate your answer.
50.
If the supply curve is more price elastic than the demand curve, will the buyers or the sellers
bear a greater burden
of a tax? Draw a diagram to illustrate your answer.
