The Following questions are all true or false. these questions have a chance of showing up on my test in the future so I would like to have the answers so I can make flashcards with them.

Landlords cease to be responsive to tenants' concerns about the quality of the rental housing when rent control is imposed because with shortages and waiting lists, the landlords have no incentive to maintain their rental property

In 1990, Congress passed a new luxury tax on items such as yachts, private airplanes, furs, jewelry, and expensive cars. The burden of this type of luxury tax falls more on the middle class worker than on the rich buyer because the demand for luxury goods is elastic.

Suppose a price ceiling is binding. Either a decrease in demand or an increase in supply could turn the binding price ceiling into a non-binding price ceiling.

Unlike minimum wage laws, wage subsidies, such as the earned income tax credit, raise living standards of the working poor without creating unemployment.

A price floor is binding if the price floor is below the equilibrium market price.

If government imposes either a price ceiling or a price floor that is non-binding, the market will not move to a different quantity or price since a non-binding price control will not affect quantity sold.

Suppose the market is in equilibrium. If government imposes either a price ceiling or a price floor that is binding, then the market will sell a smaller quantity.

If the government imposes an excise tax of $5 per unit and that causes the price to rise by $3 per unit and quantity sold to change from 12,000 units to 10,000 units, then the government collects tax revenue of more than $28,000 but less than $38,000.

Economists generally hold that a housing subsidy is not an effective way to increase the amount of housing because rent control is more likely to increase the amount of housing than a housing subsidy.

Policymakers use taxes only in those markets in which the burden of the tax falls clearly on the sellers.

The equilibrium price must be below the price ceiling if the price ceiling is binding.

If the supply curve is perfectly inelastic, then sellers bear the entire burden of the tax, the price paid by buyers is the same after the tax is imposed as the amount buyers paid before the tax was imposed and the quantity sold is the same after the tax as before the tax.

A binding price floor will cause a surplus and, therefore, it will be necessary for the market to experience either an increase in supply or a reduction in demand to eliminate the surplus

If the government imposes an excise tax of $5 per unit and that causes the price to rise by $2 per unit, then the buyer bears more of the burden of the tax than the seller does because the price that the buyer pays has increased.

A legal maximum price at which a good can be sold is a price ceiling and a legal minimum price at which a good can be sold is a price floor.

In general, workers with high skills and much experience are not affected by the minimum wage because their equilibrium wages are well above the minimum wage.

A binding price ceiling will cause a chronic shortage and buyers will probably have to wait in long lines to purchase the product.

Although the minimum wage is an example of a price floor, it is not necessarily a binding price floor because the minimum wage may be more than the equilibrium wage and make it non-binding.

The term "tax incidence" refers to the division of the tax burden between sales taxes and income taxes.

A housing subsidy is a burden on the taxpayer because the housing subsidy must be paid by government.

If a tax is imposed on a market with elastic demand and inelastic supply, sellers will bear most of the burden of the tax.

A tax on the sellers of cigarettes will cause the price the buyers pay for cigarettes to rise, the effective price the sellers receive (and keep) to decrease and the quantity of cigarettes sold to increase

A binding price floor causes a surplus because price is not legally allowed to rise to its equilibrium.

If the minimum wage is above the equilibrium wage, anyone who wants a job at the minimum wage may find it difficult to get hired since the quantity supplied of labor is more than the quantity demanded of labor.

Suppose the equilibrium price in a market is $20. Following the imposition of a price floor of $23, irate buyers lobby Congress to repeal the price floor. In response Congress acted to repeal the price floor and imposed a price ceiling $1 below the former price floor. As a result, the new market price is $22.

If it is a binding price floor, the minimum wage often hurts the low-skilled people who it is intended to help because it will cause greater unemployment among low-skilled workers.

If a price ceiling is a binding constraint on the market, the quantity supplied of the good will be greater than the quantity demanded.

If the demand curve is perfectly inelastic, then the buyer bears the entire burden of the tax

If a price floor is a binding constraint on the market, then the quantity demanded of the good will be less than the quantity supplied.

Price controls are usually enacted when policymakers want to make markets more efficient.