Question 1

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

Accepted Answer

A) more and sellers receive more than they did before the tax. 
B) more and sellers receive less than they did before the tax. 
C) less and sellers receive more than they did before the tax. 
D) less and sellers receive less than they did before the tax. 
A) more and sellers receive more than they did before the tax. 
B) more and sellers receive less than they did before the tax. 
C) less and sellers receive more than they did before the tax. 
D) less and sellers receive less than they did before the tax.

Question 2

Figure 6-36  
-Refer to Figure 6-36. If the government places a $2 tax in the market, the seller bears $2 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 3

Table 6-2  
-Refer to Table 6-2. A price ceiling set at $20 will

Accepted Answer

A) be binding and will result in a shortage of 75 units. 
B) be binding and will result in a shortage of 200 units. 
C) be binding and will result in a shortage of 125 units. 
D) not be binding. 
A) be binding and will result in a shortage of 75 units. 
B) be binding and will result in a shortage of 200 units. 
C) be binding and will result in a shortage of 125 units. 
D) not be binding.

Question 4

Table 6-1  
-Refer to Table 6-1. Suppose the government imposes a price ceiling of $70 on this market. What will be the size of the shortage in this market?

Accepted Answer

A) 0 units 
B) 400 units 
C) 600 units 
D) 1000 units 
A) 0 units 
B) 400 units 
C) 600 units 
D) 1000 units

Question 5

Figure 6-6  
-Refer to Figure 6-6. Which of the following price floors would be binding in this market?

Accepted Answer

A) $6 
B) $8 
C) $10 
D) $4 
A) $6 
B) $8 
C) $10 
D) $4

Question 6

If the demand curve is more price elastic than the supply 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 demand curve is more elastic th

Question 7

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

Accepted Answer

A) supplied to exceed quantity demanded by 45 units. 
B) supplied to exceed quantity demanded by 85 units. 
C) demanded to exceed quantity supplied by 45 units. 
D) demanded to exceed quantity supplied by 85 units. 
A) supplied to exceed quantity demanded by 45 units. 
B) supplied to exceed quantity demanded by 85 units. 
C) demanded to exceed quantity supplied by 45 units. 
D) demanded to exceed quantity supplied by 85 units.

Question 8

Figure 6-21  
-Refer to Figure 6-21. What is the amount of the tax per unit?

Accepted Answer

A) $1 
B) $2 
C) $3 
D) $4 
A) $1 
B) $2 
C) $3 
D) $4

Question 9

​In a market with a binding price control,

Accepted Answer

A) there is an imbalance between the quantity supplied by sellers and the quantity demanded by buyers. 
B) ​the costs of production are fully reflected in the price paid. 
C) ​the price observe reflects the scarcity of the good. 
D) ​all of the above are true. 
A) there is an imbalance between the quantity supplied by sellers and the quantity demanded by buyers. 
B) ​the costs of production are fully reflected in the price paid. 
C) ​the price observe reflects the scarcity of the good. 
D) ​all of the above are true.

Question 10

In an unregulated labor market, the wage adjusts to balance labor supply and labor demand.

Accepted Answer

A) True 
 B)False

Question 11

​Figure 6-32  
-​Refer to Figure 6-32. Which of the following statements is NOT accurate regarding the situation reflected by this diagram?

Accepted Answer

A) ​the price will reflect the scarcity of the good when a price floor is imposed at a price of $8. 
B) ​the price will reflect the scarcity of the good when a price ceiling is imposed at a price of $10. 
C) ​the price will reflect the scarcity of the good when a price ceiling is imposed at a price of $12. 
D) ​the price will reflect the scarcity of the good when a price floor is imposed at a price of $14. 
A) ​the price will reflect the scarcity of the good when a price floor is imposed at a price of $8. 
B) ​the price will reflect the scarcity of the good when a price ceiling is imposed at a price of $10. 
C) ​the price will reflect the scarcity of the good when a price ceiling is imposed at a price of $12. 
D) ​the price will reflect the scarcity of the good when a price floor is imposed at a price of $14.

Question 12

Figure 6-7  
-Refer to Figure 6-7. Suppose a price floor of $8 is imposed on this market. As a result,

Accepted Answer

A) buyers' total expenditure on the good decreases by $20. 
B) the supply curve shifts to the left; quantity sold is now 30 units and the price is $8. 
C) the quantity of the good demanded decreases by 10 units. 
D) the price of the good continues to serve as the rationing mechanism. 
A) buyers' total expenditure on the good decreases by $20. 
B) the supply curve shifts to the left; quantity sold is now 30 units and the price is $8. 
C) the quantity of the good demanded decreases by 10 units. 
D) the price of the good continues to serve as the rationing mechanism.

Question 13

In the housing market, supply and demand are

Accepted Answer

A) more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
B) more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
C) more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
D) more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
A) more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
B) more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
C) more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
D) more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.

Question 14

Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Accepted Answer

A) True 
 B)False

Question 15

Price is the rationing mechanism in a free, competitive market.

Accepted Answer

A) True 
 B)False

Question 16

Figure 6-12  
-Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is

Accepted Answer

A) less than Q3. 
B) Q3. 
C) between Q1 and Q3. 
D) at least Q1. 
A) less than Q3. 
B) Q3. 
C) between Q1 and Q3. 
D) at least Q1.

Question 17

Figure 6-35  
-Refer to Figure 6-35. A price floor set at $40 would create a surplus of 20 units.

Accepted Answer

A) True 
 B)False

Question 18

Price controls can generate inequities.

Accepted Answer

A) True 
 B)False

Question 19

Table 6-6  
-Refer to Table 6-6. In this market, over what range of prices would a price floor set by the government be binding?

Accepted Answer

A price floor must be set abov

Question 20

Figure 6-17
This figure shows the market demand and market supply curves for good Y  
-Refer to Figure 6-17. A government-imposed price of $24 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.

Exam 6: Supply, Demand, and Government Policies

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

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the seller bears $2 of the tax burden.

Table 6-2 -Refer to Table 6-2. A price ceiling set at $20 will

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price ceiling of $70 on this market. What will be the size of the shortage in this market?

Figure 6-6 -Refer to Figure 6-6. Which of the following price floors would be binding in this market?

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

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

Figure 6-21 -Refer to Figure 6-21. What is the amount of the tax per unit?

​In a market with a binding price control,

In an unregulated labor market, the wage adjusts to balance labor supply and labor demand.

​Figure 6-32 -​Refer to Figure 6-32. Which of the following statements is NOT accurate regarding the situation reflected by this diagram?

Figure 6-7 -Refer to Figure 6-7. Suppose a price floor of $8 is imposed on this market. As a result,

In the housing market, supply and demand are

Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Price is the rationing mechanism in a free, competitive market.

Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is

Figure 6-35 -Refer to Figure 6-35. A price floor set at $40 would create a surplus of 20 units.

Price controls can generate inequities.

Table 6-6 -Refer to Table 6-6. In this market, over what range of prices would a price floor set by the government be binding?

Figure 6-17 This figure shows the market demand and market supply curves for good Y -Refer to Figure 6-17. A government-imposed price of $24 in this market is an example of a

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

In a market with a binding price control,

Figure 6-32 -Refer to Figure 6-32. Which of the following statements is NOT accurate regarding the situation reflected by this diagram?

Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S₁ to S₂, the resulting quantity of gasoline that is bought and sold is