Question 1

Figure 6-26  
-Refer to Figure 6-26. The per-unit burden of the tax is

Accepted Answer

A) $2 for buyers and $6 for sellers. 
B) $4 for buyers and $4 for sellers. 
C) $6 for buyers and $2 for sellers. 
D) $8 for buyers and $0 for sellers. 
A) $2 for buyers and $6 for sellers. 
B) $4 for buyers and $4 for sellers. 
C) $6 for buyers and $2 for sellers. 
D) $8 for buyers and $0 for sellers.

Question 2

The Federal Insurance Contribution Act (FICA) tax is an example of a(n)

Accepted Answer

A) payroll tax. 
B) sales tax. 
C) farm subsidy. 
D) income subsidy. 
A) payroll tax. 
B) sales tax. 
C) farm subsidy. 
D) income subsidy.

Question 3

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Accepted Answer

A) True 
 B)False

Question 4

The price paid by buyers in a market will decrease if the government

Accepted Answer

A) increases a binding price floor in that market. 
B) increases a binding price ceiling in that market. 
C) decreases a tax on the good sold in that market. 
D) All of the above are correct. 
A) increases a binding price floor in that market. 
B) increases a binding price ceiling in that market. 
C) decreases a tax on the good sold in that market. 
D) All of the above are correct.

Question 5

A price ceiling set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 6

A price ceiling caused the gasoline shortage of 1973 in the United States.

Accepted Answer

A) True 
 B)False

Question 7

If a binding price floor is imposed on the market for eBooks, then

Accepted Answer

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

Question 8

When a tax is imposed on the buyers of a good, the demand 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.

Question 9

The rationing mechanisms that develop under binding price floors are usually efficient.

Accepted Answer

A) True 
 B)False

Question 10

When a binding price ceiling is imposed on a market to benefit buyers,

Accepted Answer

A) every buyer in the market benefits. 
B) every buyer and seller in the market benefits. 
C) every buyer who wants to buy the good will be able to do so, but only if he waits in long lines. 
D) some buyers will not be able to buy any amount of the good. 
A) every buyer in the market benefits. 
B) every buyer and seller in the market benefits. 
C) every buyer who wants to buy the good will be able to do so, but only if he waits in long lines. 
D) some buyers will not be able to buy any amount of the good.

Question 11

As a rationing mechanism, discrimination according to seller bias is

Accepted Answer

A) efficient and fair. 
B) efficient, but potentially unfair. 
C) inefficient, but fair. 
D) inefficient and potentially unfair. 
A) efficient and fair. 
B) efficient, but potentially unfair. 
C) inefficient, but fair. 
D) inefficient and potentially unfair.

Question 12

A price ceiling set below the equilibrium price is binding.

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-34  
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the buyers in this market?

Accepted Answer

With a $6 tax per unit, the pr

Question 14

You receive a paycheck from your employer, and your pay stub indicates that $400 was deducted to pay the FICA (Social Security/Medicare) tax. Which of the following statements is correct?

Accepted Answer

A) This type of tax is an example of a payback tax. 
B) Your employer is required by law to pay $400 to match the $400 deducted from your check. 
C) The $400 that you paid is the true burden of the tax that falls on you, the employee. 
D) All of the above are correct. 
A) This type of tax is an example of a payback tax. 
B) Your employer is required by law to pay $400 to match the $400 deducted from your check. 
C) The $400 that you paid is the true burden of the tax that falls on you, the employee. 
D) All of the above are correct.

Question 15

Figure 6-1
Panel (a)
Panel (b)    
-Refer to Figure 6-1. The price ceiling shown in panel (a)

Accepted Answer

A) is not binding. 
B) creates a surplus. 
C) creates a shortage. 
D) Both a) and b) are correct. 
A) is not binding. 
B) creates a surplus. 
C) creates a shortage. 
D) Both a) and b) are correct.

Question 16

A tax imposed on the sellers of a good will lower the

Accepted Answer

A) price paid by buyers and lower the equilibrium quantity. 
B) price paid by buyers and raise the equilibrium quantity. 
C) effective price received by sellers and lower the equilibrium quantity. 
D) effective price received by sellers and raise the equilibrium quantity. 
A) price paid by buyers and lower the equilibrium quantity. 
B) price paid by buyers and raise the equilibrium quantity. 
C) effective price received by sellers and lower the equilibrium quantity. 
D) effective price received by sellers and raise the equilibrium quantity.

Question 17

Figure 6-31   ​
-Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30. The effect of this price ceiling would be ​

Accepted Answer

A) nonbinding and cause a shortage of 50 units. 
B) ​binding and cause a shortage of 50 units. 
C) ​binding and cause a shortage of 20 units. 
D) nonbinding and have no effect on the market. 
A) nonbinding and cause a shortage of 50 units. 
B) ​binding and cause a shortage of 50 units. 
C) ​binding and cause a shortage of 20 units. 
D) nonbinding and have no effect on the market.

Question 18

Not all sellers benefit from a binding price floor.

Accepted Answer

A) True 
 B)False

Question 19

Figure 6-23  
-Refer to Figure 6-23. For every unit of the good that is sold, sellers are required to send

Accepted Answer

A) one dollar to the government, and buyers are required to send two dollars to the government. 
B) two dollars to the government, and buyers are required to send one dollar to the government. 
C) three dollars to the government, and buyers are required to send nothing to the government. 
D) nothing to the government, and buyers are required to send two dollars to the government. 
A) one dollar to the government, and buyers are required to send two dollars to the government. 
B) two dollars to the government, and buyers are required to send one dollar to the government. 
C) three dollars to the government, and buyers are required to send nothing to the government. 
D) nothing to the government, and buyers are required to send two dollars to the government.

Question 20

Suppose that the demand for light bulbs is inelastic, and the supply of light bulbs is elastic. A tax of $2 per bulb levied on light bulbs will increase the price paid by buyers of light bulbs by

Accepted Answer

A) less than $1. 
B) $1. 
C) between $1 and $2. 
D) $2. 
A) less than $1. 
B) $1. 
C) between $1 and $2. 
D) $2.

Exam 6: Supply, Demand, and Government Policies

Figure 6-26 -Refer to Figure 6-26. The per-unit burden of the tax is

The Federal Insurance Contribution Act (FICA) tax is an example of a(n)

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

The price paid by buyers in a market will decrease if the government

A price ceiling set above the equilibrium price is not binding.

A price ceiling caused the gasoline shortage of 1973 in the United States.

If a binding price floor is imposed on the market for eBooks, then

When a tax is imposed on the buyers of a good, the demand curve shifts

The rationing mechanisms that develop under binding price floors are usually efficient.

When a binding price ceiling is imposed on a market to benefit buyers,

As a rationing mechanism, discrimination according to seller bias is

A price ceiling set below the equilibrium price is binding.

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the buyers in this market?

You receive a paycheck from your employer, and your pay stub indicates that $400 was deducted to pay the FICA (Social Security/Medicare) tax. Which of the following statements is correct?

Figure 6-1 Panel (a) Panel (b) -Refer to Figure 6-1. The price ceiling shown in panel (a)

A tax imposed on the sellers of a good will lower the

Figure 6-31 ​ -Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30. The effect of this price ceiling would be ​

Not all sellers benefit from a binding price floor.

Figure 6-23 -Refer to Figure 6-23. For every unit of the good that is sold, sellers are required to send

Suppose that the demand for light bulbs is inelastic, and the supply of light bulbs is elastic. A tax of $2 per bulb levied on light bulbs will increase the price paid by buyers of light bulbs by

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

Figure 6-31 -Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30. The effect of this price ceiling would be