Problem set 3 - Question 1 Multiple Choice A binding price...

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Question 1 Multiple Choice 0 of 5 point(s) A binding price floor in a market sets price Your Answer: [None Given] Correct Answer: above equilibrium price and causes a surplus. Question 2 Multiple Choice 0 of 5 point(s) A tax placed on the seller of a product will Your Answer: [None Given] Correct Answer: raise equilibrium price and lower equilibrium quantity. Question 3 Multiple Choice 0 of 5 point(s) Which of the following would be true as the elasticity of supply approaches infinity? Your Answer: [None Given] Correct Answer: Very small changes in price will lead to very large changes in quantity supplied. Question 4 Multiple Choice 0 of 5 point(s) To determine whether a good is considered normal or inferior, one would consider the good's Your Answer: [None Given] Correct Answer: income elasticity of demand. Question 5 Multiple Choice 0 of 5 point(s) The smaller the price elasticity of demand the Your Answer: [None Given] Correct Answer: steeper the demand curve will be through a given point. Question 6 Multiple Choice 0 of 5 point(s) A tax on the buyers of tea will cause the price the buyer pays Your Answer: [None Given] Correct Answer: to rise and the price the seller receives to fall. Question 7 Multiple Choice 0 of 5 point(s) Assume that a 4 percent increase in income results in a 6 percent decrease in the quantity demanded of a good. The income elasticity of demand for the good is Your Answer: [None Given] Correct Answer: negative and therefore the good is an inferior good. Question 8 Multiple Choice 0 of 5 point(s) In 1990, Congress passed a new luxury tax on items such as yachts, private airplanes, furs, jewelry, and expensive cars. The goal of the tax was to
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Your Answer: [None Given] Correct Answer: raise revenue from the wealthy. Question 9 Multiple Choice 0 of 5 point(s) Which of the following would NOT be correct concerning government attempts to reduce the flow of illegal drugs into the country? Your Answer: [None Given] Correct Answer: Drug interdiction shifts the demand curve for drugs to the left. Question 10 Multiple Choice 0 of 5 point(s) If the cross-price elasticity of demand is 1.25, then the two goods would be Your Answer: [None Given] Correct Answer: substitutes. Question 11 Multiple Choice 0 of 5 point(s) A tax on the sellers of tires will Your Answer: [None Given] Correct Answer: increase the equilibrium price of tires, and reduce the equilibrium quantity. Question 12 Multiple Choice 0 of 5 point(s) A binding price ceiling causes Your Answer: [None Given] Correct Answer: a shortage, which cannot be eliminated through market adjustment. Question 13 Multiple Choice 0 of 5 point(s) At the midpoint of a downward-sloping linear demand curve, price elasticity would be Your Answer: [None Given] Correct Answer: unit elastic. Question 14 Multiple Choice 0 of 5 point(s) Which of the following statements about rent control in New York City is accurate?
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