Question 1

Figure 6-25  
-Refer to Figure 6-25. The burden of the tax on sellers is

Accepted Answer

A) $1 per unit. 
B) $1.50 per unit. 
C) $2 per unit. 
D) $3 per unit. 
A) $1 per unit. 
B) $1.50 per unit. 
C) $2 per unit. 
D) $3 per unit.

Question 2

Figure 6-34  
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, what price will buyers pay per unit after the tax is imposed?

Accepted Answer

With a $6 tax per un

Question 3

Figure 6-6  
-Refer to Figure 6-6. If the government imposes a price ceiling of $8 on this market, then there will be

Accepted Answer

A) no shortage. 
B) a shortage of 10 units. 
C) a shortage of 20 units. 
D) a shortage of 40 units. 
A) no shortage. 
B) a shortage of 10 units. 
C) a shortage of 20 units. 
D) a shortage of 40 units.

Question 4

Scenario 6-2
Suppose demand for a product is given by the equation   and supply for the product is given by the equation  
-Refer to Scenario 6-2. Suppose the government sets a price floor at $13 for this product. Is this price floor binding, and what will be the size of the shortage/surplus in this market?

Accepted Answer

The price floor will not be bi

Question 5

​Price ceilings are never binding when set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 6

Table 6-4
The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $3 above the equilibrium price in this market.  
-Refer to Table 6-4. How many units of the good are sold after the imposition of the price floor?

Accepted Answer

A) 3 
B) 9 
C) 15 
D) 18 
A) 3 
B) 9 
C) 15 
D) 18

Question 7

Figure 6-31   ​
-Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30 and market demand for the good subsequently increases. This would

Accepted Answer

A) ​decrease the size of the surplus. 
B) ​decrease the size of the shortage. 
C) ​increase the size of the surplus. 
D) ​increase the size of the shortage. 
A) ​decrease the size of the surplus. 
B) ​decrease the size of the shortage. 
C) ​increase the size of the surplus. 
D) ​increase the size of the shortage.

Question 8

Rent-control laws dictate a minimum rent that landlords may charge tenants.

Accepted Answer

A) True 
 B)False

Question 9

If a price floor is not binding, then

Accepted Answer

A) the equilibrium price is above the price floor. 
B) the equilibrium price is below the price floor. 
C) there will be a surplus in the market. 
D) there will be a shortage in the market. 
A) the equilibrium price is above the price floor. 
B) the equilibrium price is below the price floor. 
C) there will be a surplus in the market. 
D) there will be a shortage in the market.

Question 10

Which of the following observations would be consistent with the imposition of a binding price floor on a market? After the price floor becomes effective,

Accepted Answer

A) 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) the price falls below the equilibrium price. 
A) 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) the price falls below the equilibrium price.

Question 11

One economist has argued that rent control is "the best way to destroy a city, other than bombing." Why would an economist say this?

Accepted Answer

A) He fears that low rents will cause low-income people to move into the city, reducing the quality of life for other people. 
B) He fears that rent control will benefit landlords at the expense of tenants, increasing inequality in the city. 
C) He fears that rent controls will cause a construction boom, which will make the city crowded and more polluted. 
D) He fears that rent control will eliminate the incentive to maintain buildings, leading to a deterioration of the city. 
A) He fears that low rents will cause low-income people to move into the city, reducing the quality of life for other people. 
B) He fears that rent control will benefit landlords at the expense of tenants, increasing inequality in the city. 
C) He fears that rent controls will cause a construction boom, which will make the city crowded and more polluted. 
D) He fears that rent control will eliminate the incentive to maintain buildings, leading to a deterioration of the city.

Question 12

A price ceiling is always a binding price control, whereas a price floor may be either binding or not binding.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-3
Panel (a)
Panel (b)    
-Refer to Figure 6-3. A nonbinding price floor is shown in

Accepted Answer

A) both panel (a) and panel (b). 
B) panel (a) only. 
C) panel (b) only. 
D) neither panel (a) nor panel (b). 
A) both panel (a) and panel (b). 
B) panel (a) only. 
C) panel (b) only. 
D) neither panel (a) nor panel (b).

Question 15

Figure 6-33  
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

Accepted Answer

Buyers wil

Question 16

The quantity sold in a market will increase if the government

Accepted Answer

A) decreases 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) More than one of the above is correct. 
A) decreases 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) More than one of the above is correct.

Question 17

If the supply curve is more price elastic than the demand curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Accepted Answer

When the supply curve is more price elas

Question 18

Figure 6-4  
-Refer to Figure 6-4. A government-imposed price of $12 in this market is an example of a

Accepted Answer

A) binding price ceiling that creates a shortage. 
B) non-binding price ceiling that creates a shortage. 
C) binding price floor that creates a surplus. 
D) non-binding price floor that creates a surplus. 
A) binding price ceiling that creates a shortage. 
B) non-binding price ceiling that creates a shortage. 
C) binding price floor that creates a surplus. 
D) non-binding price floor that creates a surplus.

Question 19

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

Accepted Answer

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

Question 20

Figure 6-33  
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market?

Accepted Answer

The burden

Figure 6-25 -Refer to Figure 6-25. The burden of the tax on sellers is

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, what price will buyers pay per unit after the tax is imposed?

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price ceiling of $8 on this market, then there will be

Price ceilings are never binding when set above the equilibrium price.

Figure 6-31 -Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30 and market demand for the good subsequently increases. This would

Rent-control laws dictate a minimum rent that landlords may charge tenants.

If a price floor is not binding, then

Which of the following observations would be consistent with the imposition of a binding price floor on a market? After the price floor becomes effective,

One economist has argued that rent control is "the best way to destroy a city, other than bombing." Why would an economist say this?

A price ceiling is always a binding price control, whereas a price floor may be either binding or not binding.

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

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. A nonbinding price floor is shown in

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

The quantity sold in a market will increase if the government

If the supply curve is more price elastic than the demand curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Figure 6-4 -Refer to Figure 6-4. A government-imposed price of $12 in this market is an example of a

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

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market?

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 6-25 -Refer to Figure 6-25. The burden of the tax on sellers is

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, what price will buyers pay per unit after the tax is imposed?

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price ceiling of $8 on this market, then there will be

​Price ceilings are never binding when set above the equilibrium price.

Figure 6-31 ​ -Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30 and market demand for the good subsequently increases. This would

Rent-control laws dictate a minimum rent that landlords may charge tenants.

If a price floor is not binding, then

Which of the following observations would be consistent with the imposition of a binding price floor on a market? After the price floor becomes effective,

One economist has argued that rent control is "the best way to destroy a city, other than bombing." Why would an economist say this?

A price ceiling is always a binding price control, whereas a price floor may be either binding or not binding.

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

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. A nonbinding price floor is shown in

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

The quantity sold in a market will increase if the government

If the supply curve is more price elastic than the demand curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Figure 6-4 -Refer to Figure 6-4. A government-imposed price of $12 in this market is an example of a

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

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market?

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

Price ceilings are never binding when set above the equilibrium price.

Figure 6-31 -Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30 and market demand for the good subsequently increases. This would