Question 1

Figure 6-7  
-Refer to Figure 6-7. For a price ceiling to be binding in this market, it would have to be set at

Accepted Answer

A) any price below $7. 
B) any price above $3. 
C) any price below $9. 
D) any price above $7. 
A) any price below $7. 
B) any price above $3. 
C) any price below $9. 
D) any price above $7. A

Question 2

A tax on sellers increases supply.

Accepted Answer

A) True 
 B)False  False

Question 3

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Accepted Answer

A) True 
 B)False  True

Question 4

In a particular market, market demand is given by the equation   and market supply is given by the equation   Suppose a per-unit tax is imposed that reduces the number of units bought and sold in the market to 25 units. What is the size of the tax, and who bears the greater burden of the tax, buyers or sellers?

Accepted Answer

If the number of transactions falls to 2

Question 5

The proportion of minimum-wage earners who are in families with incomes below the poverty line is

Accepted Answer

A) less than one-third. 
B) between one-third and one-half. 
C) between one-half and two-thirds. 
D) greater than two-thirds. 
A) less than one-third. 
B) between one-third and one-half. 
C) between one-half and two-thirds. 
D) greater than two-thirds.

Question 6

Rent controls only affect the demand side of the rental market.
​

Accepted Answer

A) True 
 B)False

Question 7

Taxes levied on sellers and taxes levied on buyers are equivalent.

Accepted Answer

A) True 
 B)False

Question 8

Figure 6-15  
-Refer to Figure 6-15. Suppose a price floor of $4 is imposed on this market. As a result,

Accepted Answer

A) buyers' total expenditure on the good decreases by $15. 
B) the supply curve shifts to the left so as to now pass through the point (quantity = 30, price = $4). 
C) the quantity demanded of the good decreases by 30 units. 
D) the number of units sold in the market will increase by 15 units. 
A) buyers' total expenditure on the good decreases by $15. 
B) the supply curve shifts to the left so as to now pass through the point (quantity = 30, price = $4). 
C) the quantity demanded of the good decreases by 30 units. 
D) the number of units sold in the market will increase by 15 units.

Question 9

The price received by sellers in a market will increase if the government decreases a

Accepted Answer

A) binding price floor in that market. 
B) binding price ceiling in that market. 
C) tax on the good sold in that market. 
D) None of the above is correct. 
A) binding price floor in that market. 
B) binding price ceiling in that market. 
C) tax on the good sold in that market. 
D) None of the above is correct.

Question 10

Using the graph shown, answer the following questions.
a.What was the equilibrium price in this market before the tax?
b.What is the amount of the tax?
c.How much of the tax will the buyers pay?
d.How much of the tax will the sellers pay?
e.How much will the buyer pay for the product after the tax is imposed?
f. How much will the seller receive after the tax is imposed?
g. As a result of the tax, what has happened to the level of market activity?

Accepted Answer

a.$5
b.$3
c.$2
d.$1
e.$7
f.$4

Question 11

Which of the following is correct? Price controls

Accepted Answer

A) always help those they are designed to help. 
B) never help those they are designed to help. 
C) often hurt those they are designed to help. 
D) always hurt those they are designed to help. 
A) always help those they are designed to help. 
B) never help those they are designed to help. 
C) often hurt those they are designed to help. 
D) always hurt those they are designed to help.

Question 12

A price ceiling will be binding only if it is set

Accepted Answer

A) equal to the equilibrium price. 
B) above the equilibrium price. 
C) below the equilibrium price. 
D) either above or below the equilibrium price. 
A) equal to the equilibrium price. 
B) above the equilibrium price. 
C) below the equilibrium price. 
D) either above or below the equilibrium price.

Question 13

Figure 6-2  
-Refer to Figure 6-2. The price ceiling

Accepted Answer

A) is binding. 
B) causes a shortage. 
C) causes the quantity demanded to exceed the quantity supplied. 
D) All of the above are correct. 
A) is binding. 
B) causes a shortage. 
C) causes the quantity demanded to exceed the quantity supplied. 
D) All of the above are correct.

Question 14

Define a price ceiling.

Accepted Answer

A price ceiling is a

Question 15

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Accepted Answer

A) a binding price floor 
B) a binding price ceiling 
C) a tax on the good 
D) All of the above are correct. 
A) a binding price floor 
B) a binding price ceiling 
C) a tax on the good 
D) All of the above are correct.

Question 16

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Accepted Answer

A) True 
 B)False

Question 17

If a tax is levied on the sellers of a product, then the supply curve will

Accepted Answer

A) shift up. 
B) shift down. 
C) become flatter. 
D) not shift. 
A) shift up. 
B) shift down. 
C) become flatter. 
D) not shift.

Question 18

Figure 6-13
This figure shows the market demand and market supply curves for good X.  
-Refer to Figure 6-13. Which of the following price ceilings would be binding in this market?

Accepted Answer

A) $4 
B) $5 
C) $6 
D) $7 
A) $4 
B) $5 
C) $6 
D) $7

Question 19

When a tax is placed on the buyers of a product, the

Accepted Answer

A) size of the market decreases. 
B) effective price received by sellers decreases, and the price paid by buyers increases. 
C) demand for the product decreases. 
D) All of the above are correct. 
A) size of the market decreases. 
B) effective price received by sellers decreases, and the price paid by buyers increases. 
C) demand for the product decreases. 
D) All of the above are correct.

Question 20

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Accepted Answer

A) demand curve will shift upward by $20, and the effective price received by sellers will increase by $20. 
B) demand curve will shift upward by $20, and the effective price received by sellers will increase by less than $20. 
C) supply curve will shift downward by $20, and the price paid by buyers will decrease by $20. 
D) supply curve will shift downward by $20, and the price paid by buyers will decrease by less than $20. 
A) demand curve will shift upward by $20, and the effective price received by sellers will increase by $20. 
B) demand curve will shift upward by $20, and the effective price received by sellers will increase by less than $20. 
C) supply curve will shift downward by $20, and the price paid by buyers will decrease by $20. 
D) supply curve will shift downward by $20, and the price paid by buyers will decrease by less than $20.

Figure 6-7 -Refer to Figure 6-7. For a price ceiling to be binding in this market, it would have to be set at

A tax on sellers increases supply.

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

The proportion of minimum-wage earners who are in families with incomes below the poverty line is

Rent controls only affect the demand side of the rental market.

Taxes levied on sellers and taxes levied on buyers are equivalent.

Figure 6-15 -Refer to Figure 6-15. Suppose a price floor of $4 is imposed on this market. As a result,

The price received by sellers in a market will increase if the government decreases a

Which of the following is correct? Price controls

A price ceiling will be binding only if it is set

Figure 6-2 -Refer to Figure 6-2. The price ceiling

Define a price ceiling.

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

If a tax is levied on the sellers of a product, then the supply curve will

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. Which of the following price ceilings would be binding in this market?

When a tax is placed on the buyers of a product, the

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

Exam 6: Supply, Demand, and Government Policies

Figure 6-7 -Refer to Figure 6-7. For a price ceiling to be binding in this market, it would have to be set at

A tax on sellers increases supply.

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

The proportion of minimum-wage earners who are in families with incomes below the poverty line is

Rent controls only affect the demand side of the rental market. ​

Taxes levied on sellers and taxes levied on buyers are equivalent.

Figure 6-15 -Refer to Figure 6-15. Suppose a price floor of $4 is imposed on this market. As a result,

The price received by sellers in a market will increase if the government decreases a

Which of the following is correct? Price controls

A price ceiling will be binding only if it is set

Figure 6-2 -Refer to Figure 6-2. The price ceiling

Define a price ceiling.

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

If a tax is levied on the sellers of a product, then the supply curve will

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. Which of the following price ceilings would be binding in this market?

When a tax is placed on the buyers of a product, the

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

Rent controls only affect the demand side of the rental market.