Question 1

Figure 6-23  
-Refer to Figure 6-23. Which of the following is correct?

Accepted Answer

A) The entire burden of the tax falls on sellers, and none of the burden of the tax falls on buyers. 
B) One-third of the burden of the tax falls on buyers, and two-thirds of the burden of the tax falls on sellers. 
C) One-half of the burden of the tax falls on buyers, and one-half of the burden of the tax falls on sellers. 
D) Two-thirds of the burden of the tax falls on buyers, and one-third of the burden of the tax falls on sellers. 
A) The entire burden of the tax falls on sellers, and none of the burden of the tax falls on buyers. 
B) One-third of the burden of the tax falls on buyers, and two-thirds of the burden of the tax falls on sellers. 
C) One-half of the burden of the tax falls on buyers, and one-half of the burden of the tax falls on sellers. 
D) Two-thirds of the burden of the tax falls on buyers, and one-third of the burden of the tax falls on sellers.

Question 2

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 ceiling at $17 for this product. Is this price ceiling binding, and what will be the size of the shortage/surplus in this market?

Accepted Answer

The price ceiling will not be

Question 3

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

Accepted Answer

A) demand, raising both the equilibrium price and quantity in the market for artificially-sweetened beverages. 
B) demand, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages. 
C) supply, raising the equilibrium price and lowering the equilibrium quantity in the market for artificially-sweetened beverages. 
D) supply, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages. 
A) demand, raising both the equilibrium price and quantity in the market for artificially-sweetened beverages. 
B) demand, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages. 
C) supply, raising the equilibrium price and lowering the equilibrium quantity in the market for artificially-sweetened beverages. 
D) supply, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages.

Question 4

If a price ceiling is not binding, then it will have no effect on the market.

Accepted Answer

A) True 
 B)False

Question 5

A minimum wage that is set above a market's equilibrium wage will result in an excess

Accepted Answer

A) demand for labor, that is, unemployment. 
B) demand for labor, that is, a shortage of workers. 
C) supply of labor, that is, unemployment. 
D) supply of labor, that is, a shortage of workers. 
A) demand for labor, that is, unemployment. 
B) demand for labor, that is, a shortage of workers. 
C) supply of labor, that is, unemployment. 
D) supply of labor, that is, a shortage of workers.

Question 6

Scenario 6-1
Suppose that demand in the market for good X is given by the equation   and that supply in the market for good X is given by the equation  
-Refer to Scenario 6-1. If the government set a price ceiling at $8, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set

Question 7

To say that a price ceiling is binding is to say that the price ceiling

Accepted Answer

A) results in a shortage. 
B) is set below the equilibrium price. 
C) causes quantity demanded to exceed quantity supplied. 
D) All of the above are correct. 
A) results in a shortage. 
B) is set below the equilibrium price. 
C) causes quantity demanded to exceed quantity supplied. 
D) All of the above are correct.

Question 8

Minimum wage laws

Accepted Answer

A) may encourage some teenagers to drop out and take jobs. 
B) create labor shortages. 
C) have the greatest impact in the market for skilled labor. 
D) All of the above are correct. 
A) may encourage some teenagers to drop out and take jobs. 
B) create labor shortages. 
C) have the greatest impact in the market for skilled labor. 
D) All of the above are correct.

Question 9

Define a price floor.

Accepted Answer

A price floor is a l

Question 10

Figure 6-32  
-Refer to Figure 6-32. If the government set a price ceiling at $40, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

There woul

Question 11

Figure 6-4  
-Refer to Figure 6-4. A government-imposed price of $6 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 12

Figure 6-25  
-Refer to Figure 6-25. The burden of the tax on buyers 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 13

A tax on sellers shifts the supply curve but not the demand curve.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-19  
-Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A) $3 
B) between $3 and $5 
C) between $5 and $7 
D) $7 
A) $3 
B) between $3 and $5 
C) between $5 and $7 
D) $7

Question 15

Figure 6-28  
-Refer to Figure 6-28. Suppose a tax of $6 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?

Accepted Answer

A) $4 
B) between $4 and $7 
C) between $7 and $10 
D) $10 
A) $4 
B) between $4 and $7 
C) between $7 and $10 
D) $10

Question 16

​The incidence of a tax is

Accepted Answer

A) ​always determined by the demand side of the market. 
B) ​always determined by the supply side of the market. 
C) ​always determined by the interaction of the demand and supply side of the market.. 
D) ​always determined by which side of the market the government imposes the tax on. 
A) ​always determined by the demand side of the market. 
B) ​always determined by the supply side of the market. 
C) ​always determined by the interaction of the demand and supply side of the market.. 
D) ​always determined by which side of the market the government imposes the tax on.

Question 17

A tax burden falls more heavily on the side of the market that is less elastic.

Accepted Answer

A) True 
 B)False

Question 18

If a price ceiling of $2 per gallon is imposed on gasoline, and the market equilibrium price is $1.50, then the price ceiling is a binding constraint on the market.

Accepted Answer

A) True 
 B)False

Question 19

Figure 6-35  
-Refer to Figure 6-35. A price ceiling set at $70 would create a shortage of 40 units.

Accepted Answer

A) True 
 B)False

Question 20

When a tax is placed on the sellers of cell phones, the size of the cell phone market

Accepted Answer

A) and the effective price received by sellers both increase. 
B) increases, but the effective price received by sellers decreases. 
C) decreases, but the effective price received by sellers increases. 
D) and the effective price received by sellers both decrease. 
A) and the effective price received by sellers both increase. 
B) increases, but the effective price received by sellers decreases. 
C) decreases, but the effective price received by sellers increases. 
D) and the effective price received by sellers both decrease.

Exam 6: Supply, Demand, and Government Policies

Figure 6-23 -Refer to Figure 6-23. Which of the following is correct?

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

If a price ceiling is not binding, then it will have no effect on the market.

A minimum wage that is set above a market's equilibrium wage will result in an excess

To say that a price ceiling is binding is to say that the price ceiling

Minimum wage laws

Define a price floor.

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $40, would there be a shortage or surplus, and how large would be the shortage/surplus?

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

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

A tax on sellers shifts the supply curve but not the demand curve.

Figure 6-19 -Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Figure 6-28 -Refer to Figure 6-28. Suppose a tax of $6 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?

​The incidence of a tax is

A tax burden falls more heavily on the side of the market that is less elastic.

If a price ceiling of $2 per gallon is imposed on gasoline, and the market equilibrium price is $1.50, then the price ceiling is a binding constraint on the market.

Figure 6-35 -Refer to Figure 6-35. A price ceiling set at $70 would create a shortage of 40 units.

When a tax is placed on the sellers of cell phones, the size of the cell phone 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

The incidence of a tax is