Question 1

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

Accepted Answer

A) the quantity of video games demanded will decrease. 
B) the quantity of video games supplied will increase. 
C) a surplus of video games will develop. 
D) All of the above are correct. 
A) the quantity of video games demanded will decrease. 
B) the quantity of video games supplied will increase. 
C) a surplus of video games will develop. 
D) All of the above are correct.

Question 2

Who bears the majority of a tax burden depends on the relative elasticity of supply and demand.

Accepted Answer

A) True 
 B)False

Question 3

Rent-control laws dictate

Accepted Answer

A) the exact rent that landlords must charge tenants. 
B) a maximum rent that landlords may charge tenants. 
C) a minimum rent that landlords may charge tenants. 
D) both a minimum rent and a maximum rent that landlords may charge tenants. 
A) the exact rent that landlords must charge tenants. 
B) a maximum rent that landlords may charge tenants. 
C) a minimum rent that landlords may charge tenants. 
D) both a minimum rent and a maximum rent that landlords may charge tenants.

Question 4

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 5

If a tax is levied on the sellers of flour, then

Accepted Answer

A) buyers will bear the entire burden of the tax. 
B) sellers will bear the entire burden of the tax. 
C) buyers and sellers will share the burden of the tax. 
D) the government will bear the entire burden of the tax. 
A) buyers will bear the entire burden of the tax. 
B) sellers will bear the entire burden of the tax. 
C) buyers and sellers will share the burden of the tax. 
D) the government will bear the entire burden of the tax.

Question 6

Figure 6-16  
-Refer to Figure 6-16. In this market, a minimum wage of $2.75 is

Accepted Answer

A) binding and creates a labor shortage. 
B) binding and creates unemployment. 
C) nonbinding and creates a labor shortage. 
D) nonbinding and creates neither a labor shortage nor unemployment. 
A) binding and creates a labor shortage. 
B) binding and creates unemployment. 
C) nonbinding and creates a labor shortage. 
D) nonbinding and creates neither a labor shortage nor unemployment.

Question 7

Figure 6-31  
-Refer to Figure 6-31. If the government set a price floor at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at

Question 8

If the government removes a binding price ceiling from a market, then the price received by sellers will

Accepted Answer

A) decrease, and the quantity sold in the market will decrease. 
B) decrease, and the quantity sold in the market will increase. 
C) increase, and the quantity sold in the market will decrease. 
D) increase, and the quantity sold in the market will increase. 
A) decrease, and the quantity sold in the market will decrease. 
B) decrease, and the quantity sold in the market will increase. 
C) increase, and the quantity sold in the market will decrease. 
D) increase, and the quantity sold in the market will increase.

Question 9

Figure 6-29
Suppose the government imposes a $2 on this market.  
-Refer to Figure 6-29. The buyers and sellers will bear an equal share of the tax burden if the demand is

Accepted Answer

A) D1, and the supply is S1. 
B) D2, and the supply is S1. 
C) D1, and the supply is S2. 
D) D2, and the supply is S2. 
A) D1, and the supply is S1. 
B) D2, and the supply is S1. 
C) D1, and the supply is S2. 
D) D2, and the supply is S2.

Question 10

A tax on buyers decreases the quantity of the good sold in the market.

Accepted Answer

A) True 
 B)False

Question 11

All buyers benefit from a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 12

Figure 6-34  
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how many units will be bought and sold in the market after the tax is imposed?

Accepted Answer

With a $6 tax per un

Question 13

Figure 6-22  
-Refer to Figure 6-22. Buyers pay how much of the tax per unit?

Accepted Answer

A) $0.50. 
B) $1.50. 
C) $3.00. 
D) $5.00. 
A) $0.50. 
B) $1.50. 
C) $3.00. 
D) $5.00.

Question 14

When government imposes a price ceiling or a price floor on a market,

Accepted Answer

A) price no longer serves as a rationing device. 
B) efficiency in the market is enhanced. 
C) shortages and surpluses are eliminated. 
D) both buyers and sellers become better off. 
A) price no longer serves as a rationing device. 
B) efficiency in the market is enhanced. 
C) shortages and surpluses are eliminated. 
D) both buyers and sellers become better off.

Question 15

A binding price floor will reduce a firm's total revenue

Accepted Answer

A) always. 
B) when demand is elastic. 
C) when demand is inelastic. 
D) never. 
A) always. 
B) when demand is elastic. 
C) when demand is inelastic. 
D) never.

Question 16

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 17

Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

Accepted Answer

A) frequent rental programs such as "Rent nine times and the tenth rental is free!" 
B) enhanced maintenance programs to promote the high quality of the cars 
C) free gasoline given to people as an incentive to a rent a car 
D) slow replacement of old rental cars with newer ones 
A) frequent rental programs such as "Rent nine times and the tenth rental is free!" 
B) enhanced maintenance programs to promote the high quality of the cars 
C) free gasoline given to people as an incentive to a rent a car 
D) slow replacement of old rental cars with newer ones

Question 18

A tax on buyers decreases demand.

Accepted Answer

A) True 
 B)False

Question 19

A binding price ceiling may not help all consumers, but it does not hurt any consumers.

Accepted Answer

A) True 
 B)False

Question 20

A tax levied on the sellers of blueberries

Accepted Answer

A) increases sellers' costs, reduces profits, and shifts the supply curve up. 
B) increases sellers' costs, reduces profits, and shifts the supply curve down. 
C) decreases sellers' costs, increases profits, and shifts the supply curve up. 
D) decreases sellers' costs, increases profits, and shifts the supply curve down. 
A) increases sellers' costs, reduces profits, and shifts the supply curve up. 
B) increases sellers' costs, reduces profits, and shifts the supply curve down. 
C) decreases sellers' costs, increases profits, and shifts the supply curve up. 
D) decreases sellers' costs, increases profits, and shifts the supply curve down.

Exam 6: Supply, Demand, and Government Policies

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

Who bears the majority of a tax burden depends on the relative elasticity of supply and demand.

Rent-control laws dictate

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

If a tax is levied on the sellers of flour, then

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $2.75 is

Figure 6-31 -Refer to Figure 6-31. If the government set a price floor at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

If the government removes a binding price ceiling from a market, then the price received by sellers will

Figure 6-29 Suppose the government imposes a $2 on this market. -Refer to Figure 6-29. The buyers and sellers will bear an equal share of the tax burden if the demand is

A tax on buyers decreases the quantity of the good sold in the market.

All buyers benefit from a binding price ceiling.

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how many units will be bought and sold in the market after the tax is imposed?

Figure 6-22 -Refer to Figure 6-22. Buyers pay how much of the tax per unit?

When government imposes a price ceiling or a price floor on a market,

A binding price floor will reduce a firm's total revenue

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

Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

A tax on buyers decreases demand.

A binding price ceiling may not help all consumers, but it does not hurt any consumers.

A tax levied on the sellers of blueberries

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

Applications: 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

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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