Graph Input Tool Market for Shoes 200 180 I Price (Dollars per pair) $100 160 Quantity Demanded (Pairs of shoes) Quantity Supplied (Pairs of shoes) Supply 250.00 250.00 140 120 100 Supply Shifter 80 Demand Tax on Sellers (Dollars per pair) 60 0.00 40 20 50 100 150 200 250 300 350 400 450 500 QUANTITY (Pairs of shoes) Fill in the following table with the quantity sold and the equilibrium price before and after the tax. Quantity Equilibrium Price (Pairs of shoes) (Dollars per pair) Before Tax After Tax Although the tax was $23.20 per pair, after the tax was imposed, the equilibrium price increased by $ which represents the amount of the per-unit tax that is paid by the buyers. From this you can conclude that sellers pay the remaining $ of the $23.20-per-unit tax. PRICE (Dollars per pair)

4-5  Draw the price effect and the quantity effect for a price change from $60 to $70. Which effect is larger? Does total revenue increase or decrease? No calculation is necessary.

Price Supply $4 M 3 2 Demand 40 50 60 Quantity If the price starts out at $4, what will surely happen over time? a) The quantity supplied will fall, quantity demanded will rise and quantity sold will fall. b) The quantity supplied will fall, quantity demanded will rise and quantity sold will rise. c) The quantity supplied will fall, quantity demanded will fall and quantity sold will rise. d) The quantity supplied will rise, quantity demanded will fall and quantity sold will rise.

USD.13     An increase in a price ceiling will change the amount of a good sold in a market: Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a if the price ceiling is effective. b regardless of whether or not the ceiling is effective. c if the price ceiling is ineffective. d if demand is inelastic.