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Question 6 In a market with a binding price ceiling, an increase in the ceiling will quantity supplied, the the quantity demanded, and reduce the ----- decrease, increase, surplus decrease, increase, shortage Increase, decrease, surplus O increase, decrease, shortage Question 7 If the government places a tax of $500 on luxury cars, what happens in the market? Please assume demand and supply that are "normal" i.e. not completely elastic and not completely inelastic. Demand is downward sloping and supply upward sloping :) The price goes up by more than $500, and quantity sold goes up The price goes up by more than $500, and quantity sold goes down The price goes up by less than $500, and quantity sold goes up The price goes up by less than $500, and quantity sold goes down

Question 6 In a market with a binding price ceiling, an increase in the ceiling will quantity supplied, the the quantity demanded, and reduce the ----- decrease, increase, surplus decrease, increase, shortage Increase, decrease, surplus O increase, decrease, shortage Question 7 If the government places a tax of $500 on luxury cars, what happens in the market? Please assume demand and supply that are "normal" i.e. not completely elastic and not completely inelastic. Demand is downward sloping and supply upward sloping :) The price goes up by more than $500, and quantity sold goes up The price goes up by more than $500, and quantity sold goes down The price goes up by less than $500, and quantity sold goes up The price goes up by less than $500, and quantity sold goes down

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 6PA: The price of coffee rose sharply last month, while the quantity sold remained the same. Five people...
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Question 6 In a market with a binding price ceiling, an increase in the ceiling will quantity supplied, the the quantity demanded, and reduce the decrease, increase, surplus decrease, increase, shortage Increase, decrease, surplus increase, decrease, shortage Question 7 If the government places a tax of $500 on luxury cars, what happens in the market? Please assume demand and supply that are "normal" i.e. not completely elastic and not completely inelastic. Demand is downward sloping and supply upward sloping :) The price goes up by more than $500, and quantity sold goes up The price goes up by more than $500, and quantity sold goes down The price goes up by less than $500, and quantity sold goes up The price goes up by less than $500, and quantity sold goes down
Transcribed Image Text:Question 6 In a market with a binding price ceiling, an increase in the ceiling will quantity supplied, the the quantity demanded, and reduce the decrease, increase, surplus decrease, increase, shortage Increase, decrease, surplus increase, decrease, shortage Question 7 If the government places a tax of $500 on luxury cars, what happens in the market? Please assume demand and supply that are "normal" i.e. not completely elastic and not completely inelastic. Demand is downward sloping and supply upward sloping :) The price goes up by more than $500, and quantity sold goes up The price goes up by more than $500, and quantity sold goes down The price goes up by less than $500, and quantity sold goes up The price goes up by less than $500, and quantity sold goes down
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