Question 1

If a sales tax is imposed on food,who is likely to pay most of the tax?

Accepted Answer

A) mostly the buyer 
B) mostly the seller 
C) neither the seller nor the buyer 
D) the buyer and the seller equally 
E) The burden of the tax depends on the size of the tax. 
A) mostly the buyer 
B) mostly the seller 
C) neither the seller nor the buyer 
D) the buyer and the seller equally 
E) The burden of the tax depends on the size of the tax.

Question 2

Use the table below to answer the following questions.
Table 6.2.1  
-Table 6.2.1 gives the supply and demand schedules for teenage labour in Genoa City.Suppose a new fast food restaurant opens and increases the quantity demanded of teenage labour by 400 hours per week at each wage rate.If the teenage labour market is unregulated,there is an increase in teenage employment to

Accepted Answer

A) 1,000 hours per week and a wage of $15 per hour. 
B) 1,000 hours per week and a wage of $17 per hour. 
C) 800 hours per week and a wage of $16 per hour. 
D) 600 hours per week and a wage of $17 per hour. 
E) 400 hours per week and a wage of $17 per hour. 
A) 1,000 hours per week and a wage of $15 per hour. 
B) 1,000 hours per week and a wage of $17 per hour. 
C) 800 hours per week and a wage of $16 per hour. 
D) 600 hours per week and a wage of $17 per hour. 
E) 400 hours per week and a wage of $17 per hour.

Question 3

Use the figure below to answer the following questions.   Figure 6.3.1
-Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed.At a quantity of 4,500 frisbees,supply is

Accepted Answer

A) inelastic. 
B) unit elastic. 
C) elastic. 
D) perfectly elastic. 
E) perfectly inelastic. 
A) inelastic. 
B) unit elastic. 
C) elastic. 
D) perfectly elastic. 
E) perfectly inelastic.

Question 4

Use the figure below to answer the following questions.   Figure 6.1.1
-Refer to Figure 6.1.1.If the demand for rental housing increases and the demand curve shifts rightward from D0 to D1,and the market is unregulated,the number of rooms rented is

Accepted Answer

A) 1,500,and the rent rises to $200 a month. 
B) 2,000,and the rent is at its initial level. 
C) 1,750,and the rent rises to $175 a month. 
D) 2,000,and the rent rises to $200 a month. 
E) 1,750,and the rent rises to $200 a month. 
A) 1,500,and the rent rises to $200 a month. 
B) 2,000,and the rent is at its initial level. 
C) 1,750,and the rent rises to $175 a month. 
D) 2,000,and the rent rises to $200 a month. 
E) 1,750,and the rent rises to $200 a month.

Question 5

An effective production quota

Accepted Answer

A) increases the marginal social cost of production. 
B) lowers the price and increases the marginal social cost of production. 
C) increases demand for the good. 
D) raises the price and decreases the marginal social cost of production. 
E) makes production more efficient. 
A) increases the marginal social cost of production. 
B) lowers the price and increases the marginal social cost of production. 
C) increases demand for the good. 
D) raises the price and decreases the marginal social cost of production. 
E) makes production more efficient.

Question 6

When a price ceiling is set below the equilibrium price,

Accepted Answer

A) the demand curve shifts leftward. 
B) the quantity supplied exceeds the quantity demanded. 
C) the quantity supplied equals the quantity demanded. 
D) the supply curve shifts rightward. 
E) the quantity demanded exceeds the quantity supplied. 
A) the demand curve shifts leftward. 
B) the quantity supplied exceeds the quantity demanded. 
C) the quantity supplied equals the quantity demanded. 
D) the supply curve shifts rightward. 
E) the quantity demanded exceeds the quantity supplied.

Question 7

Use the table below to answer the following questions.
Table 6.4.1  
-Refer to Table 6.4.1.The table shows the demand and supply schedules for rice.With a production quota of 2,000 boxes a week,the price of a box of rice is ________,the marginal cost of producing rice is ________ a box,and the quantity of rice produced is ________ boxes a week.

Accepted Answer

A) $1.30;$1.60;2,000 
B) $1.60;$1.30;2,000 
C) $1.40;$1.40;2,500 
D) $1.40;$1.40;2,000 
E) $1.60;$1.30;2,500 
A) $1.30;$1.60;2,000 
B) $1.60;$1.30;2,000 
C) $1.40;$1.40;2,500 
D) $1.40;$1.40;2,000 
E) $1.60;$1.30;2,500

Question 8

Use the table below to answer the following questions.
Table 6.3.1  
-Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The sellers' share of the tax is

Accepted Answer

A) $2.00. 
B) $1.50. 
C) $1.00. 
D) $0. 
E) $2.50. 
A) $2.00. 
B) $1.50. 
C) $1.00. 
D) $0. 
E) $2.50.

Question 9

Use the figure below to answer the following questions.   Figure 6.1.2
-Refer to Figure 6.1.2.What would be the maximum black market price of the good if a price ceiling is set at $10 a unit?

Accepted Answer

A) $10 
B) $15 
C) $20 
D) 50 goods sold at $10 and 50 goods sold at $20 
E) 50 goods sold at $10 and 50 goods sold at $15 
A) $10 
B) $15 
C) $20 
D) 50 goods sold at $10 and 50 goods sold at $20 
E) 50 goods sold at $10 and 50 goods sold at $15

Question 10

If a rent ceiling imposed by the government is greater than the equilibrium rent for housing,then

Accepted Answer

A) the supply of rental housing will increase. 
B) a shortage of housing will occur. 
C) a surplus of housing will occur. 
D) the equilibrium rent will prevail as long as all else remains constant. 
E) the equilibrium rent will rise. 
A) the supply of rental housing will increase. 
B) a shortage of housing will occur. 
C) a surplus of housing will occur. 
D) the equilibrium rent will prevail as long as all else remains constant. 
E) the equilibrium rent will rise.

Question 11

Use the figure below to answer the following questions.   Figure 6.1.1
-Refer to Figure 6.1.1.Suppose the demand for rental housing is shown by demand curve D1,and there is a rent ceiling of $150 per room.What is the highest rent that would be charged in a black market?

Accepted Answer

A) $150 a month 
B) $175 a month 
C) $200 a month 
D) $100 a month 
E) cannot be determined from the graph,but it is greater than $200 
A) $150 a month 
B) $175 a month 
C) $200 a month 
D) $100 a month 
E) cannot be determined from the graph,but it is greater than $200

Question 12

A subsidy

Accepted Answer

A) lowers the price received by farmers. 
B) decreases the quantity supplied in the market. 
C) raises the price received by farmers. 
D) prevents the deadweight loss from underproduction. 
E) decreases total revenue received by farmers. 
A) lowers the price received by farmers. 
B) decreases the quantity supplied in the market. 
C) raises the price received by farmers. 
D) prevents the deadweight loss from underproduction. 
E) decreases total revenue received by farmers.

Question 13

The seller pays most of a tax if demand is relatively elastic because

Accepted Answer

A) the buyer can easily substitute to other markets. 
B) the seller can easily substitute to other markets. 
C) the government forces the seller to bear the burden of the tax. 
D) there is a black market for this good. 
E) the seller cannot easily substitute to other goods. 
A) the buyer can easily substitute to other markets. 
B) the seller can easily substitute to other markets. 
C) the government forces the seller to bear the burden of the tax. 
D) there is a black market for this good. 
E) the seller cannot easily substitute to other goods.

Question 14

Use the table below to answer the following questions.
Table 6.5.1
The Market for a Prohibited Good  
-Refer to Table 6.5.1.If a $2-per-unit cost of breaking the law is imposed on sellers,the new price is ________ and the new equilibrium quantity is ________ units.

Accepted Answer

A) $8;400 
B) $8;300 
C) $7;300 
D) $9;300 
E) $8;200 
A) $8;400 
B) $8;300 
C) $7;300 
D) $9;300 
E) $8;200

Question 15

Use the figure below to answer the following questions.   Figure 6.3.2
-Refer to Figure 6.3.2.The seller's share of the tax is

Accepted Answer

A) zero. 
B) $0.50. 
C) $1.00. 
D) $1.50. 
E) $2.00. 
A) zero. 
B) $0.50. 
C) $1.00. 
D) $1.50. 
E) $2.00.

Question 16

Use the table below to answer the following questions.
Table 6.2.2  
-Table 6.2.2 gives the labour demand and labour supply schedules for low-skilled labour.What is the equilibrium wage rate in an unregulated market?

Accepted Answer

A) $15.00 per hour 
B) $15.50 per hour 
C) $16.00 per hour 
D) $16.50 per hour 
E) $17.50 per hour 
A) $15.00 per hour 
B) $15.50 per hour 
C) $16.00 per hour 
D) $16.50 per hour 
E) $17.50 per hour

Question 17

A rent ceiling

Accepted Answer

A) results in a shortage of housing if the rent ceiling is below the equilibrium rent. 
B) results in a surplus of housing if the rent ceiling is above the equilibrium rent. 
C) always results in a shortage of housing. 
D) always results in a surplus of housing. 
E) Both A and B are correct. 
A) results in a shortage of housing if the rent ceiling is below the equilibrium rent. 
B) results in a surplus of housing if the rent ceiling is above the equilibrium rent. 
C) always results in a shortage of housing. 
D) always results in a surplus of housing. 
E) Both A and B are correct.

Question 18

If the demand for a good is perfectly inelastic,then a tax on the good will be paid

Accepted Answer

A) completely by the buyers. 
B) completely by the sellers. 
C) equally by the buyers and sellers. 
D) mostly but not completely by the buyers. 
E) mostly but not completely by the sellers. 
A) completely by the buyers. 
B) completely by the sellers. 
C) equally by the buyers and sellers. 
D) mostly but not completely by the buyers. 
E) mostly but not completely by the sellers.

Question 19

Suppose a minimum wage of $15 an hour is in force,resulting in unemployment of 10 million hours.Then the demand for labour increases such that supply and demand curves intersect at a wage rate of $17 per hour.What will happen to the equilibrium wage rate and employment?

Accepted Answer

A) The wage rate is $17 an hour and there will be no unemployment. 
B) The wage rate is $17 an hour and there will be a surplus of labour. 
C) The wage rate is $15 an hour and there will be a surplus of labour. 
D) The wage rate is $15 an hour and there will be no unemployment. 
E) The wage rate is $15 an hour and there will be unemployment. 
A) The wage rate is $17 an hour and there will be no unemployment. 
B) The wage rate is $17 an hour and there will be a surplus of labour. 
C) The wage rate is $15 an hour and there will be a surplus of labour. 
D) The wage rate is $15 an hour and there will be no unemployment. 
E) The wage rate is $15 an hour and there will be unemployment.

Question 20

A $10 per-unit tax on game consoles raises the equilibrium price paid by consumers by $5 per console.The quantity sold before the tax was 5,000 per year.The revenue from the tax is

Accepted Answer

A) zero. 
B) positive but less than $50,000 per year. 
C) $50,000 per year. 
D) more than $50,000 per year. 
E) greater the more elastic is demand. 
A) zero. 
B) positive but less than $50,000 per year. 
C) $50,000 per year. 
D) more than $50,000 per year. 
E) greater the more elastic is demand.

If a sales tax is imposed on food,who is likely to pay most of the tax?

Use the figure below to answer the following questions. Figure 6.3.1 -Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed.At a quantity of 4,500 frisbees,supply is

Use the figure below to answer the following questions. Figure 6.1.1 -Refer to Figure 6.1.1.If the demand for rental housing increases and the demand curve shifts rightward from D₀ to D₁,and the market is unregulated,the number of rooms rented is

An effective production quota

When a price ceiling is set below the equilibrium price,

Use the table below to answer the following questions. Table 6.3.1 -Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The sellers' share of the tax is

Use the figure below to answer the following questions. Figure 6.1.2 -Refer to Figure 6.1.2.What would be the maximum black market price of the good if a price ceiling is set at $10 a unit?

If a rent ceiling imposed by the government is greater than the equilibrium rent for housing,then

Use the figure below to answer the following questions. Figure 6.1.1 -Refer to Figure 6.1.1.Suppose the demand for rental housing is shown by demand curve D₁,and there is a rent ceiling of $150 per room.What is the highest rent that would be charged in a black market?

A subsidy

The seller pays most of a tax if demand is relatively elastic because

Use the table below to answer the following questions. Table 6.5.1 The Market for a Prohibited Good -Refer to Table 6.5.1.If a $2-per-unit cost of breaking the law is imposed on sellers,the new price is and the new equilibrium quantity is units.

Use the figure below to answer the following questions. Figure 6.3.2 -Refer to Figure 6.3.2.The seller's share of the tax is

Use the table below to answer the following questions. Table 6.2.2 -Table 6.2.2 gives the labour demand and labour supply schedules for low-skilled labour.What is the equilibrium wage rate in an unregulated market?

A rent ceiling

If the demand for a good is perfectly inelastic,then a tax on the good will be paid

Suppose a minimum wage of $15 an hour is in force,resulting in unemployment of 10 million hours.Then the demand for labour increases such that supply and demand curves intersect at a wage rate of $17 per hour.What will happen to the equilibrium wage rate and employment?

A $10 per-unit tax on game consoles raises the equilibrium price paid by consumers by $5 per console.The quantity sold before the tax was 5,000 per year.The revenue from the tax is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 6: Government Actions in Markets

If a sales tax is imposed on food,who is likely to pay most of the tax?

Use the figure below to answer the following questions. Figure 6.3.1 -Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed.At a quantity of 4,500 frisbees,supply is

Use the figure below to answer the following questions. Figure 6.1.1 -Refer to Figure 6.1.1.If the demand for rental housing increases and the demand curve shifts rightward from D0 to D1,and the market is unregulated,the number of rooms rented is

An effective production quota

When a price ceiling is set below the equilibrium price,

Use the table below to answer the following questions. Table 6.3.1 -Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The sellers' share of the tax is

Use the figure below to answer the following questions. Figure 6.1.2 -Refer to Figure 6.1.2.What would be the maximum black market price of the good if a price ceiling is set at $10 a unit?

If a rent ceiling imposed by the government is greater than the equilibrium rent for housing,then

Use the figure below to answer the following questions. Figure 6.1.1 -Refer to Figure 6.1.1.Suppose the demand for rental housing is shown by demand curve D1,and there is a rent ceiling of $150 per room.What is the highest rent that would be charged in a black market?

A subsidy

The seller pays most of a tax if demand is relatively elastic because

Use the table below to answer the following questions. Table 6.5.1 The Market for a Prohibited Good -Refer to Table 6.5.1.If a $2-per-unit cost of breaking the law is imposed on sellers,the new price is ________ and the new equilibrium quantity is ________ units.

Use the figure below to answer the following questions. Figure 6.3.2 -Refer to Figure 6.3.2.The seller's share of the tax is

Use the table below to answer the following questions. Table 6.2.2 -Table 6.2.2 gives the labour demand and labour supply schedules for low-skilled labour.What is the equilibrium wage rate in an unregulated market?

A rent ceiling

If the demand for a good is perfectly inelastic,then a tax on the good will be paid

Suppose a minimum wage of $15 an hour is in force,resulting in unemployment of 10 million hours.Then the demand for labour increases such that supply and demand curves intersect at a wage rate of $17 per hour.What will happen to the equilibrium wage rate and employment?

A $10 per-unit tax on game consoles raises the equilibrium price paid by consumers by $5 per console.The quantity sold before the tax was 5,000 per year.The revenue from the tax is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Use the figure below to answer the following questions. Figure 6.1.1 -Refer to Figure 6.1.1.If the demand for rental housing increases and the demand curve shifts rightward from D₀ to D₁,and the market is unregulated,the number of rooms rented is

Use the figure below to answer the following questions. Figure 6.1.1 -Refer to Figure 6.1.1.Suppose the demand for rental housing is shown by demand curve D₁,and there is a rent ceiling of $150 per room.What is the highest rent that would be charged in a black market?

Use the table below to answer the following questions. Table 6.5.1 The Market for a Prohibited Good -Refer to Table 6.5.1.If a $2-per-unit cost of breaking the law is imposed on sellers,the new price is and the new equilibrium quantity is units.