ch 6 terms

Question 1

how to calculate tax rev

Answer 1

vertical gap between 2 supply curves (diff in price) times new equilibrium quantity

Question 2

define price ceiling

Answer 2

legislated price max
govt price control

Question 3

define binding price ceiling

Answer 3

below equilibrium forcing price down

Question 4

define price floor

Answer 4

minimum price that sellers can charge
govt price control

Question 5

define binding price floor

Answer 5

if above equilibrium, driving up prices
results in surplus

Question 6

result of binding price ceiling

Answer 6

shortage

Question 7

result of binding price floor

Answer 7

surplus

Question 8

what happens to supply and demand over time

Answer 8

both become more elastic

Question 9

define right to return

Answer 9

when renter gets demovicted they move into new building with frozen rent

Question 10

1 ex of price ceiling

Answer 10

rent control

Question 11

1 ex of price floor

Answer 11

minimum wage

Question 12

define tax incidence

Answer 12

how tax dollars paying burden is distributed between buyer and seller

Question 13

results of taxes on buyers on supply and demand

Answer 13

demand down
EQ down

Question 14

results of taxes on sellers on supply and demand

Answer 14

supply decreased
EQ rises