Question 1

Figure 6-19  
-Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Accepted Answer

A) less than 50 units 
B) 50 units 
C) between 50 units and 100 units 
D) greater than 100 units 
A) less than 50 units 
B) 50 units 
C) between 50 units and 100 units 
D) greater than 100 units

Question 2

Figure 6-22  
-Refer to Figure 6-22. The amount of the tax per unit is

Accepted Answer

A) $2.00. 
B) $1.50. 
C) $3.00. 
D) $0.50. 
A) $2.00. 
B) $1.50. 
C) $3.00. 
D) $0.50.

Question 3

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

Accepted Answer

A) is binding. 
B) causes a shortage. 
C) causes the quantity demanded to exceed the quantity supplied. 
D) All of the above are correct. 
A) is binding. 
B) causes a shortage. 
C) causes the quantity demanded to exceed the quantity supplied. 
D) All of the above are correct.

Question 4

Figure 6-21  
-Refer to Figure 6-21. How is the burden of the tax shared between buyers and sellers? Buyers bear

Accepted Answer

A) three-fourths of the burden, and sellers bear one-fourth of the burden. 
B) two-thirds of the burden, and sellers bear one-third of the burden. 
C) one-half of the burden, and sellers bear one-half of the burden. 
D) one-fourth of the burden, and sellers bear three-fourths of the burden. 
A) three-fourths of the burden, and sellers bear one-fourth of the burden. 
B) two-thirds of the burden, and sellers bear one-third of the burden. 
C) one-half of the burden, and sellers bear one-half of the burden. 
D) one-fourth of the burden, and sellers bear three-fourths of the burden.

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

After OPEC raised the price of crude oil in the 1970's, which of the following was the most important reason that there were shortages of gasoline?

Accepted Answer

A) ​Americans drove large, gas-guzzling vehicles. 
B) ​The increase in the price of crude oil by OPEC. 
C) ​The effects of a price ceiling on gasoline prices imposed by the US government. 
D) ​Increased commuting times resulting from traffic congestion. 
A) ​Americans drove large, gas-guzzling vehicles. 
B) ​The increase in the price of crude oil by OPEC. 
C) ​The effects of a price ceiling on gasoline prices imposed by the US government. 
D) ​Increased commuting times resulting from traffic congestion.

Question 7

Table 6-5  
-Refer to Table 6-5. Suppose the government imposes a price ceiling of $3 on this market. What will be the size of the shortage in this market?

Accepted Answer

A) 0 units 
B) 30 units 
C) 45 units 
D) 75 units 
A) 0 units 
B) 30 units 
C) 45 units 
D) 75 units

Question 8

A price ceiling is

Accepted Answer

A) often imposed on markets in which "cutthroat competition" would prevail without a price ceiling. 
B) a legal maximum on the price at which a good can be sold. 
C) often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price ceiling. 
D) All of the above are correct. 
A) often imposed on markets in which "cutthroat competition" would prevail without a price ceiling. 
B) a legal maximum on the price at which a good can be sold. 
C) often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price ceiling. 
D) All of the above are correct.

Question 9

The tax burden falls more heavily on the side of the market that is more inelastic.

Accepted Answer

A) True 
 B)False

Question 10

As rationing mechanisms, prices

Accepted Answer

A) and long lines are efficient. 
B) are efficient, but long lines are inefficient. 
C) are inefficient, but long lines are efficient. 
D) and long lines are inefficient. 
A) and long lines are efficient. 
B) are efficient, but long lines are inefficient. 
C) are inefficient, but long lines are efficient. 
D) and long lines are inefficient.

Question 11

Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following causes a shortage of a good?

Accepted Answer

A) a binding price floor 
B) a binding price ceiling 
C) a tax on the good 
D) None of the above is correct. 
A) a binding price floor 
B) a binding price ceiling 
C) a tax on the good 
D) None of the above is correct.

Question 13

Figure 6-29
Suppose the government imposes a $2 on this market.  
-Refer to Figure 6-29. Suppose D1 represents the demand curve for paperback novels, D2 represents the demand curve for gasoline, and S1 represents the supply curve for paperback novels and gasoline. After the imposition of the $2 on paperback novels and on gasoline, the

Accepted Answer

A) buyers of gasoline bear a higher burden of the $2 tax than buyers of paperback novels. 
B) sellers of gasoline bear a higher burden of the $2 tax than sellers of paperback novels. 
C) buyers of gasoline bear an equal burden of the $2 tax as buyers of paperback novels. 
D) Both a) and b) are correct. 
A) buyers of gasoline bear a higher burden of the $2 tax than buyers of paperback novels. 
B) sellers of gasoline bear a higher burden of the $2 tax than sellers of paperback novels. 
C) buyers of gasoline bear an equal burden of the $2 tax as buyers of paperback novels. 
D) Both a) and b) are correct.

Question 14

Figure 6-24  
-Refer to Figure 6-24. In the after-tax equilibrium, government collects

Accepted Answer

A) $1,440 in tax revenue; of this amount, $960 represents a burden on buyers and $480 represents a burden on sellers. 
B) $1,440 in tax revenue; of this amount, $720 represents a burden on buyers and $720 represents a burden on sellers. 
C) $1,680 in tax revenue; of this amount, $1,260 represents a burden on buyers and $420 represents a burden on sellers. 
D) $1,680 in tax revenue; of this amount, $840 represents a burden on buyers and $840 represents a burden on sellers. 
A) $1,440 in tax revenue; of this amount, $960 represents a burden on buyers and $480 represents a burden on sellers. 
B) $1,440 in tax revenue; of this amount, $720 represents a burden on buyers and $720 represents a burden on sellers. 
C) $1,680 in tax revenue; of this amount, $1,260 represents a burden on buyers and $420 represents a burden on sellers. 
D) $1,680 in tax revenue; of this amount, $840 represents a burden on buyers and $840 represents a burden on sellers.

Question 15

If a tax is levied on the buyers of a product, then there will be a(n)

Accepted Answer

A) upward shift of the demand curve. 
B) downward shift of the demand curve. 
C) movement up and to the left along the demand curve. 
D) movement down and to the right along the demand curve. 
A) upward shift of the demand curve. 
B) downward shift of the demand curve. 
C) movement up and to the left along the demand curve. 
D) movement down and to the right along the demand curve.

Question 16

If the government levies a $1,000 tax per boat on sellers of boats, then the price paid by buyers of boats would

Accepted Answer

A) increase by more than $1,000. 
B) increase by exactly $1,000. 
C) increase by less than $1,000. 
D) decrease by an indeterminate amount. 
A) increase by more than $1,000. 
B) increase by exactly $1,000. 
C) increase by less than $1,000. 
D) decrease by an indeterminate amount.

Question 17

Figure 6-22  
-Refer to Figure 6-22. The price paid by buyers after the tax is imposed is

Accepted Answer

A) $3.00. 
B) $3.50. 
C) $5.00. 
D) $6.00. 
A) $3.00. 
B) $3.50. 
C) $5.00. 
D) $6.00.

Question 18

When a tax is placed on the sellers 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 19

An outcome that can result from either a price ceiling or a price floor is

Accepted Answer

A) a surplus in the market. 
B) a shortage in the market. 
C) a nonbinding price control. 
D) long lines of frustrated buyers. 
A) a surplus in the market. 
B) a shortage in the market. 
C) a nonbinding price control. 
D) long lines of frustrated buyers.

Question 20

Economists generally believe that rent control is

Accepted Answer

A) an efficient and fair way to help the poor. 
B) inefficient but the best available means of solving a serious social problem. 
C) a highly inefficient way to help the poor raise their standard of living. 
D) an efficient way to allocate housing, but not a good way to help the poor. 
A) an efficient and fair way to help the poor. 
B) inefficient but the best available means of solving a serious social problem. 
C) a highly inefficient way to help the poor raise their standard of living. 
D) an efficient way to allocate housing, but not a good way to help the poor.

Exam 6: Supply, Demand, and Government Policies

Figure 6-19 -Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Figure 6-22 -Refer to Figure 6-22. The amount of the tax per unit is

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

Figure 6-21 -Refer to Figure 6-21. How is the burden of the tax shared between buyers and sellers? Buyers bear

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

After OPEC raised the price of crude oil in the 1970's, which of the following was the most important reason that there were shortages of gasoline?

Table 6-5 -Refer to Table 6-5. Suppose the government imposes a price ceiling of $3 on this market. What will be the size of the shortage in this market?

A price ceiling is

The tax burden falls more heavily on the side of the market that is more inelastic.

As rationing mechanisms, prices

Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

Which of the following causes a shortage of a good?

Figure 6-24 -Refer to Figure 6-24. In the after-tax equilibrium, government collects

If a tax is levied on the buyers of a product, then there will be a(n)

If the government levies a $1,000 tax per boat on sellers of boats, then the price paid by buyers of boats would

Figure 6-22 -Refer to Figure 6-22. The price paid by buyers after the tax is imposed is

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

An outcome that can result from either a price ceiling or a price floor is

Economists generally believe that rent control is

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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