projetior l8messagePartld02 1 Which of the following items i

projetior l8messagePartld-0.2 1- Which of the following items is not a good candidate for an excise tax? a. Batteries. b. Prescription Drugs. c. Cellphones. d. Bottled Water 2- Price Gouging is defined as: a. The maximum price a company can charge for a concert. b. Th e minimum price a company can charge for organizing a special event. The equilibrium price for goods or services that consumers need during a disaster. A temporary ceiling on the prices that sellers can charge during times of emergency until markets function normally again. c. d. Imagine that a city council decides that the market price for student rental apartments is too high. It passes a law that establishes a rental price ceiling of $600 per month. The result of the price ceiling is a shortage. Which of the following has caused the shortage of apartments? 3- a. A spike in demand from many students who want to rent cheap apartments b. The drop in supply caused by apartment owners pulling their units off the rental market and converting them into condos for sale. c. Both suppliers and demanders. Landlords will reduce the supply of apartments, and the demand form renters will increase. The change in price as a result of the price ceiling set by the city counc d. d Paper-assignment.doc

Solution

A bottled water

consumers can drink tap water, filtered water, or other healthy beverages instead of bottled water. Therefore, bottled water is not a good candidate for an excise tax

B places a temporary ceiling on the prices that sellers can charge during times of emergency until market functions mormarlly again.

C both suppliers and demanders . Landlords will reduce the supply of apartments and the demand from renters will increase.

the quantity demanded will exceed the quantity supplied.