Supply & demand questions!?

Question

1. If the government imposes a tax of $.25 on each papaya produced, will this cause a change in supply or quantity supplied?

a) supply

b) quantity suppled

2. If Congress increases the minimum wage to $7.25 per hour, what happens to the supply of consumer goods as a result?

a) increases

b) remains the same

c) decreases

3. If the price of salaries of movie actors increases,

a)the supply of new movies will increase.

b) the supply of new movies will decrease.

c) the quantity supplied of new movies will increase.

d) the quantity supplied of new movies will decrease.

e) the supply of new movies won’t be changed because demand by movie actors will increase.

thank you!

Answer 1

Question 1:  you may be looking at (B) being your best answer.   This would be the point were it would effect the producers.

Question 2: (A) would be the likely response

Question 3: (D) is what is commonly thought would happen in this case.   My gut tells me that there would be little to no impact on new movies!

Answer 2

1. A, Assuming the tax is imposed on the sellers, the supply curve will shift

2. a, increases, cost of production increases, and demand increases

3. B, higher input price