Question 1

Which of the following is an economic policy that promotes the efficient quantity of apartments?

Accepted Answer

A)  a rent floor above the equilibrium rent 
B)  a rent ceiling below the equilibrium rent 
C)  a sales tax imposed on renting an apartment 
D)  none of the above 
A)  a rent floor above the equilibrium rent 
B)  a rent ceiling below the equilibrium rent 
C)  a sales tax imposed on renting an apartment 
D)  none of the above

Question 2

The Social Security tax is a tax that Congress imposes equally on both employers and employees. Does this mean that the burden of this tax is shared equally between firms and workers? Explain.

Accepted Answer

No. A tax has the same effect regardless

Question 3

A $10 per-unit tax on cell phones raises the equilibrium price paid by consumers by $5. Before the tax, 5,000 cell phones were sold 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. 
A)  zero. 
B)  positive but less than $50,000 per year. 
C)  $50,000 per year. 
D)  more than $50,000 per year.

Question 4

-The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $800, what is the rent?

Accepted Answer

A)  $800 
B)  $600 
C)  $400 
D)  None of the above answers is correct. 
A)  $800 
B)  $600 
C)  $400 
D)  None of the above answers is correct.

Question 5

A sales tax will be divided so that

Accepted Answer

A)  the buyers pay the full amount if supply is perfectly inelastic. 
B)  the sellers pay the full amount if supply is perfectly inelastic. 
C)  the sellers pay the full amount if supply is perfectly elastic. 
D)  both buyers and sellers pay some of the tax if supply is perfectly elastic. 
A)  the buyers pay the full amount if supply is perfectly inelastic. 
B)  the sellers pay the full amount if supply is perfectly inelastic. 
C)  the sellers pay the full amount if supply is perfectly elastic. 
D)  both buyers and sellers pay some of the tax if supply is perfectly elastic.

Question 6

If the penalty on sellers of an illegal good is less than the penalty on buyers of an illegal good, then supply of the good will ________ by ________ demand and the price of the good will ________.

Accepted Answer

A)  increase; more than; increase 
B)  decrease; more than; decrease 
C)  decrease; less than; decrease 
D)  decrease; the same amount as; remain the same 
A)  increase; more than; increase 
B)  decrease; more than; decrease 
C)  decrease; less than; decrease 
D)  decrease; the same amount as; remain the same

Question 7

A production quota on tobacco lowers the price of tobacco and the marginal cost of producing it.

Accepted Answer

A) True 
 B)False

Question 8

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The tax decreases consumption by

Accepted Answer

A)  1,000 blouses. 
B)  2,000 blouses. 
C)  3,000 blouses. 
D)  4,000 blouses. 
A)  1,000 blouses. 
B)  2,000 blouses. 
C)  3,000 blouses. 
D)  4,000 blouses.

Question 9

Two small California cities, Richmond and El Monte, are planning to impose a penny per ounce tax on sugary drinks. They are being opposed by the soda industry that is vehemently against this new legislation. (Source: Reuters, September 6, 2012)
-Assuming the market of soda has a regular downward sloping demand curve and upward sloping supply curve, the tax will ________ the price paid by buyers and ________ the price received by sellers.

Accepted Answer

A)  decrease; increase 
B)  decrease; decrease 
C)  increase; increase 
D)  increase; decrease 
A)  decrease; increase 
B)  decrease; decrease 
C)  increase; increase 
D)  increase; decrease

Question 10

-In the above figure, a price ceiling of $2 would

Accepted Answer

A)  create a shortage. 
B)  create a surplus. 
C)  have no effect. 
D)  cause the demand curve to shift leftward. 
A)  create a shortage. 
B)  create a surplus. 
C)  have no effect. 
D)  cause the demand curve to shift leftward.

Question 11

-The figure above shows the market for a life-saving drug. Suppose the government imposes a $150 tax per dose on sellers of the drug. Show and describe the impact on the market. Who pays this tax?

Accepted Answer

@#IMG-DLM& The tax decreases the supply and shifts

Question 12

-In the above figure, if the minimum wage is set at $6 per hour, the level of unemployment is ________ hours per week is

Accepted Answer

A)  40 million 
B)  30 million 
C)  20 million 
D)  0 
A)  40 million 
B)  30 million 
C)  20 million 
D)  0

Question 13

-Suppose the government has declared beer to be an illegal substance and has imposed penalties on any person caught selling a beer. Buying a beer, however, remains legal. Using the above figure, in which CBL is the cost of breaking the law, beer consumption is decreased by

Accepted Answer

A)  200 quarts. 
B)  300 quarts. 
C)  400 quarts. 
D)  500 quarts. 
A)  200 quarts. 
B)  300 quarts. 
C)  400 quarts. 
D)  500 quarts.

Question 14

Explain why in cities such as New York City that have rent ceiling laws, so many people who work in the city commute from outside the city.

Accepted Answer

Rent ceilings decrease the quantity supp

Question 15

The less elastic the supply, the

Accepted Answer

A)  less likely the government is to tax the product. 
B)  less likely the government is to impose a price ceiling. 
C)  larger the fraction of any tax imposed on the product that is paid by the suppliers. 
D)  less elastic the demand. 
A)  less likely the government is to tax the product. 
B)  less likely the government is to impose a price ceiling. 
C)  larger the fraction of any tax imposed on the product that is paid by the suppliers. 
D)  less elastic the demand.

Question 16

-The above figure shows the labor market in an undeveloped nation. A minimum wage has an effect on the market for low-skilled labor if it is set at

Accepted Answer

A)  $2.00. 
B)  $3.00. 
C)  $4.00. 
D)  all of the above 
A)  $2.00. 
B)  $3.00. 
C)  $4.00. 
D)  all of the above

Question 17

What happens to the quantity of labor supplied, the quantity of labor demanded, and the number of unemployed workers if the minimum wage rate set above the equilibrium wage is increased still higher?

Accepted Answer

An increase in the minimum wage increase

Question 18

-The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $400, what is the rent?

Accepted Answer

A)  $800 
B)  $600 
C)  $400 
D)  None of the above answers is correct. 
A)  $800 
B)  $600 
C)  $400 
D)  None of the above answers is correct.

Question 19

-In the above figure, CBL is the cost of breaking the law. If the good in the figure is made illegal and penalties are imposed on both buyers and sellers, then its price per unit

Accepted Answer

A)  will be higher than if it was not illegal. 
B)  will be lower than if it was not illegal. 
C)  will be the same as when it was not illegal. 
D)  cannot be compared with its price when it was legal. 
A)  will be higher than if it was not illegal. 
B)  will be lower than if it was not illegal. 
C)  will be the same as when it was not illegal. 
D)  cannot be compared with its price when it was legal.

Question 20

-The figure above shows the market for low-skilled labor in Midland city. The government sets a minimum wage at $6 per hour. With the minimum wage law enacted, at the quantity of labor employed, the value to the firm of last worker hired is ________ the wage rate for which that person is willing to work.

Accepted Answer

A)  the same as 
B)  $3 per hour less than 
C)  $3 per hour greater than 
D)  $1 per hour greater 
A)  the same as 
B)  $3 per hour less than 
C)  $3 per hour greater than 
D)  $1 per hour greater

Exam 6: Government Actions in Markets

Which of the following is an economic policy that promotes the efficient quantity of apartments?

The Social Security tax is a tax that Congress imposes equally on both employers and employees. Does this mean that the burden of this tax is shared equally between firms and workers? Explain.

A $10 per-unit tax on cell phones raises the equilibrium price paid by consumers by $5. Before the tax, 5,000 cell phones were sold per year. The revenue from the tax is

-The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $800, what is the rent?

A sales tax will be divided so that

If the penalty on sellers of an illegal good is less than the penalty on buyers of an illegal good, then supply of the good will ________ by ________ demand and the price of the good will ________.

A production quota on tobacco lowers the price of tobacco and the marginal cost of producing it.

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The tax decreases consumption by

-In the above figure, a price ceiling of $2 would

-The figure above shows the market for a life-saving drug. Suppose the government imposes a $150 tax per dose on sellers of the drug. Show and describe the impact on the market. Who pays this tax?

-In the above figure, if the minimum wage is set at $6 per hour, the level of unemployment is ________ hours per week is

-Suppose the government has declared beer to be an illegal substance and has imposed penalties on any person caught selling a beer. Buying a beer, however, remains legal. Using the above figure, in which CBL is the cost of breaking the law, beer consumption is decreased by

Explain why in cities such as New York City that have rent ceiling laws, so many people who work in the city commute from outside the city.

The less elastic the supply, the

-The above figure shows the labor market in an undeveloped nation. A minimum wage has an effect on the market for low-skilled labor if it is set at

What happens to the quantity of labor supplied, the quantity of labor demanded, and the number of unemployed workers if the minimum wage rate set above the equilibrium wage is increased still higher?

-The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $400, what is the rent?

-In the above figure, CBL is the cost of breaking the law. If the good in the figure is made illegal and penalties are imposed on both buyers and sellers, then its price per unit

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

If the penalty on sellers of an illegal good is less than the penalty on buyers of an illegal good, then supply of the good will by demand and the price of the good will .