Question 1

As rationing mechanisms, prices

Accepted Answer

A) and long lines are efficient. 
B) are efficient, but long lines are inefficient. 
C) are inefficient, but long lines are efficient. 
D) and long lines are inefficient. 
A) and long lines are efficient. 
B) are efficient, but long lines are inefficient. 
C) are inefficient, but long lines are efficient. 
D) and long lines are inefficient.

Question 2

A price floor set above the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 3

The minimum wage, if it is binding, raises the incomes of

Accepted Answer

A) no workers. 
B) only those workers who cannot find jobs. 
C) only those workers whose jobs would pay less than the minimum wage if it didn't exist. 
D) all workers. 
A) no workers. 
B) only those workers who cannot find jobs. 
C) only those workers whose jobs would pay less than the minimum wage if it didn't exist. 
D) all workers.

Question 4

Which of the following is not an example of a public policy?

Accepted Answer

A) rent-control laws 
B) minimum-wage laws 
C) taxes 
D) equilibrium laws 
A) rent-control laws 
B) minimum-wage laws 
C) taxes 
D) equilibrium laws

Question 5

After a binding price floor becomes effective, a

Accepted Answer

A) smaller quantity of the good is bought and sold. 
B) a larger quantity of the good is demanded. 
C) a smaller quantity of the good is supplied. 
D) All of the above are correct. 
A) smaller quantity of the good is bought and sold. 
B) a larger quantity of the good is demanded. 
C) a smaller quantity of the good is supplied. 
D) All of the above are correct.

Question 6

To be binding, a price ceiling must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 7

Figure 6-23  
-Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

Accepted Answer

A) $3. 
B) $4. 
C) $5. 
D) $6. 
A) $3. 
B) $4. 
C) $5. 
D) $6.

Question 8

Rent control may lead to lower rents for those who find housing, but the quality of the housing may also be lower.

Accepted Answer

A) True 
 B)False

Question 9

Figure 6-32  
-Refer to Figure 6-32. If the government set a price floor at $70, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at

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.$6
b.$4
c.$1
d.$3
e.$7
f.$3

Question 11

Figure 6-13
This figure shows the market demand and market supply curves for good X.  
-Refer to Figure 6-13. If the government imposes a price ceiling of $4 on this market, then there will be

Accepted Answer

A) no shortage. 
B) a shortage of 5 units. 
C) a shortage of 10 units. 
D) a shortage of 20 units. 
A) no shortage. 
B) a shortage of 5 units. 
C) a shortage of 10 units. 
D) a shortage of 20 units.

Question 12

The term tax incidence refers to

Accepted Answer

A) whether buyers or sellers of a good are required to send tax payments to the government. 
B) whether the demand curve or the supply curve shifts when the tax is imposed. 
C) the distribution of the tax burden between buyers and sellers. 
D) widespread view that taxes (and death) are the only certainties in life. 
A) whether buyers or sellers of a good are required to send tax payments to the government. 
B) whether the demand curve or the supply curve shifts when the tax is imposed. 
C) the distribution of the tax burden between buyers and sellers. 
D) widespread view that taxes (and death) are the only certainties in life.

Question 13

Figure 6-22  
-Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

Accepted Answer

A) $2.00. 
B) $3.50. 
C) $5.00. 
D) $3.00. 
A) $2.00. 
B) $3.50. 
C) $5.00. 
D) $3.00.

Question 14

Which of the following is not correct?

Accepted Answer

A) The economy contains many labor markets for different types of workers. 
B) The impact of the minimum wage depends on the skill and experience of the worker. 
C) The minimum wage is binding for workers with high skills and much experience. 
D) The minimum wage is not binding when the equilibrium wage is above the minimum wage. 
A) The economy contains many labor markets for different types of workers. 
B) The impact of the minimum wage depends on the skill and experience of the worker. 
C) The minimum wage is binding for workers with high skills and much experience. 
D) The minimum wage is not binding when the equilibrium wage is above the minimum wage.

Question 15

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

Accepted Answer

A) sellers bear the entire burden of the tax. 
B) buyers bear the entire burden of the tax. 
C) burden of the tax will be always be equally divided between the buyers and the sellers. 
D) burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal. 
A) sellers bear the entire burden of the tax. 
B) buyers bear the entire burden of the tax. 
C) burden of the tax will be always be equally divided between the buyers and the sellers. 
D) burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal.

Question 16

Figure 6-29
Suppose the government imposes a $2 on this market.  
-Refer to Figure 6-29. Suppose D1 represents the demand curve for paperback novels, D2 represents the demand curve for gasoline, and S1 represents the supply curve for paperback novels and gasoline. After the imposition of the $2 on paperback novels and on gasoline, the

Accepted Answer

A) buyers of gasoline bear a higher burden of the $2 tax than buyers of paperback novels. 
B) sellers of gasoline bear a higher burden of the $2 tax than sellers of paperback novels. 
C) buyers of gasoline bear an equal burden of the $2 tax as buyers of paperback novels. 
D) Both a) and b) are correct. 
A) buyers of gasoline bear a higher burden of the $2 tax than buyers of paperback novels. 
B) sellers of gasoline bear a higher burden of the $2 tax than sellers of paperback novels. 
C) buyers of gasoline bear an equal burden of the $2 tax as buyers of paperback novels. 
D) Both a) and b) are correct.

Question 17

The minimum wage was instituted to ensure workers

Accepted Answer

A) a middle-class standard of living. 
B) employment. 
C) a minimally adequate standard of living. 
D) unemployment compensation. 
A) a middle-class standard of living. 
B) employment. 
C) a minimally adequate standard of living. 
D) unemployment compensation.

Question 18

There are several criticisms of the minimum wage. Which of the following is not one of those criticisms? The minimum wage

Accepted Answer

A) often hurts those people who it is intended to help. 
B) results in an excess supply of low-skilled labor. 
C) prevents some unskilled workers from getting needed on-the-job training. 
D) fails to raise the wage of any employed person. 
A) often hurts those people who it is intended to help. 
B) results in an excess supply of low-skilled labor. 
C) prevents some unskilled workers from getting needed on-the-job training. 
D) fails to raise the wage of any employed person.

Question 19

If a binding price floor is imposed on the video game market, then

Accepted Answer

A) the demand for video games will decrease. 
B) the supply of video games will increase. 
C) a surplus of video games will develop. 
D) All of the above are correct. 
A) the demand for video games will decrease. 
B) the supply of video games will increase. 
C) a surplus of video games will develop. 
D) All of the above are correct.

Question 20

When a tax is imposed on the sellers of a good, the supply curve shifts

Accepted Answer

A) upward by the amount of the tax. 
B) downward by the amount of the tax. 
C) upward by less than the amount of the tax. 
D) downward by less than the amount of the tax. 
A) upward by the amount of the tax. 
B) downward by the amount of the tax. 
C) upward by less than the amount of the tax. 
D) downward by less than the amount of the tax.

As rationing mechanisms, prices

A price floor set above the equilibrium price causes a surplus in the market.

The minimum wage, if it is binding, raises the incomes of

Which of the following is not an example of a public policy?

After a binding price floor becomes effective, a

To be binding, a price ceiling must be set above the equilibrium price.

Figure 6-23 -Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

Rent control may lead to lower rents for those who find housing, but the quality of the housing may also be lower.

Figure 6-32 -Refer to Figure 6-32. If the government set a price floor at $70, would there be a shortage or surplus, and how large would be the shortage/surplus?

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. If the government imposes a price ceiling of $4 on this market, then there will be

The term tax incidence refers to

Figure 6-22 -Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

Which of the following is not correct?

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

The minimum wage was instituted to ensure workers

There are several criticisms of the minimum wage. Which of the following is not one of those criticisms? The minimum wage

If a binding price floor is imposed on the video game market, then

When a tax is imposed on the sellers of a good, the supply curve shifts

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

As rationing mechanisms, prices

A price floor set above the equilibrium price causes a surplus in the market.

The minimum wage, if it is binding, raises the incomes of

Which of the following is not an example of a public policy?

After a binding price floor becomes effective, a

To be binding, a price ceiling must be set above the equilibrium price.

Figure 6-23 -Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

Rent control may lead to lower rents for those who find housing, but the quality of the housing may also be lower.

Figure 6-32 -Refer to Figure 6-32. If the government set a price floor at $70, would there be a shortage or surplus, and how large would be the shortage/surplus?

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. If the government imposes a price ceiling of $4 on this market, then there will be

The term tax incidence refers to

Figure 6-22 -Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

Which of the following is not correct?

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

The minimum wage was instituted to ensure workers

There are several criticisms of the minimum wage. Which of the following is not one of those criticisms? The minimum wage

If a binding price floor is imposed on the video game market, then

When a tax is imposed on the sellers of a good, the supply curve shifts

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