Supply, Demand, and Government Policies 1695
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?
1696 Supply, Demand, and Government Policies
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?
Supply, Demand, and Government Policies 1697
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?
1698 Supply, Demand, and Government Policies
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?
Supply, Demand, and Government Policies 1699
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?
23. Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for
this product?
1700 Supply, Demand, and Government Policies
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?
Supply, Demand, and Government Policies 1701
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?
1702 Supply, Demand, and Government Policies
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?
Supply, Demand, and Government Policies 1703
Table 6-6
Quantity
Demanded
Quantity Supplied
21
0
18
4
15
8
12
12
9
16
6
20
3
24
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?
1704 Supply, Demand, and Government Policies
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?
Supply, Demand, and Government Policies 1705
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?
1706 Supply, Demand, and Government Policies
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?
Supply, Demand, and Government Policies 1707
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?
1708 Supply, Demand, and Government Policies
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?
Supply, Demand, and Government Policies 1709
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?
1710 Supply, Demand, and Government Policies
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?
Supply, Demand, and Government Policies 1711
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.
1712 Supply, Demand, and Government Policies
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.