Question 1

Figure 6-26  
-Refer to Figure 6-26. The effective price received by sellers after the tax is imposed is

Accepted Answer

A) $8. 
B) $16. 
C) $14. 
D) $12. 
A) $8. 
B) $16. 
C) $14. 
D) $12.

Question 2

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $20 per ticket, then the

Accepted Answer

A) demand curve will shift upward by $30, and the price paid by buyers will decrease by less than $30. 
B) demand curve will shift upward by $30, and the price paid by buyers will decrease by $30. 
C) supply curve will shift downward by $30, and the effective price received by sellers will increase by less than $30. 
D) supply curve will shift downward by $30, and the effective price received by sellers will increase by $30. 
A) demand curve will shift upward by $30, and the price paid by buyers will decrease by less than $30. 
B) demand curve will shift upward by $30, and the price paid by buyers will decrease by $30. 
C) supply curve will shift downward by $30, and the effective price received by sellers will increase by less than $30. 
D) supply curve will shift downward by $30, and the effective price received by sellers will increase by $30.

Question 3

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

Accepted Answer

A price ceiling set at $15 wou

Question 4

Figure 6-26  
-Refer to Figure 6-26. The price paid by buyers after the tax is imposed is

Accepted Answer

A) $8. 
B) $16. 
C) $14. 
D) $12. 
A) $8. 
B) $16. 
C) $14. 
D) $12.

Question 5

When a price floor is binding, is the price floor set above or below the market equilibrium price?

Accepted Answer

A binding price floo

Question 6

Figure 6-29
Suppose the government imposes a $2 on this market.  
-Refer to Figure 6-29. Suppose D1 represents the demand curve for gasoline in both the short run and long run, S1 represents the supply curve for gasoline in the short run, and S2 represents the supply curve for gasoline in the long run. After the imposition of the $2,

Accepted Answer

A) buyers bear a higher burden of the tax in the short run than in the long run. 
B) sellers bear a higher burden of the tax in the short run than in the long run. 
C) buyers and sellers bear an equal burden of the tax in both the short run and long run. 
D) buyers and sellers bear an equal burden of the tax in the short run, but buyers bear a higher burden of the tax in the long run. 
A) buyers bear a higher burden of the tax in the short run than in the long run. 
B) sellers bear a higher burden of the tax in the short run than in the long run. 
C) buyers and sellers bear an equal burden of the tax in both the short run and long run. 
D) buyers and sellers bear an equal burden of the tax in the short run, but buyers bear a higher burden of the tax in the long run.

Question 7

If the government levies a $5 tax per MP3 player on buyers of MP3 players, then the price paid by buyers of MP3 players would likely

Accepted Answer

A) increase by more than $5. 
B) increase by exactly $5. 
C) increase by less than $5. 
D) decrease. 
A) increase by more than $5. 
B) increase by exactly $5. 
C) increase by less than $5. 
D) decrease.

Question 8

Which of the following statements about the effects of rent control is correct?

Accepted Answer

A) The short-run effect of rent control is a surplus of apartments, and the long-run effect of rent control is a shortage of apartments. 
B) The short-run effect of rent control is a relatively small shortage of apartments, and the long-run effect of rent control is a larger shortage of apartments. 
C) In the long run, rent control leads to a shortage of apartments and an improvement in the quality of available apartments. 
D) The effects of rent control are very noticeable to the public in the short run because the primary effects of rent control occur very quickly. 
A) The short-run effect of rent control is a surplus of apartments, and the long-run effect of rent control is a shortage of apartments. 
B) The short-run effect of rent control is a relatively small shortage of apartments, and the long-run effect of rent control is a larger shortage of apartments. 
C) In the long run, rent control leads to a shortage of apartments and an improvement in the quality of available apartments. 
D) The effects of rent control are very noticeable to the public in the short run because the primary effects of rent control occur very quickly.

Question 9

A binding minimum wage tends to

Accepted Answer

A) cause a labor surplus. 
B) cause unemployment. 
C) have the greatest impact in the market for teenage labor. 
D) All of the above are correct. 
A) cause a labor surplus. 
B) cause unemployment. 
C) have the greatest impact in the market for teenage labor. 
D) All of the above are correct.

Question 10

If the minimum wage exceeds the equilibrium wage, then

Accepted Answer

A) the quantity demanded of labor will exceed the quantity supplied. 
B) the quantity supplied of labor will exceed the quantity demanded. 
C) the minimum wage will not be binding. 
D) there will be no unemployment. 
A) the quantity demanded of labor will exceed the quantity supplied. 
B) the quantity supplied of labor will exceed the quantity demanded. 
C) the minimum wage will not be binding. 
D) there will be no unemployment.

Question 11

Figure 6-21  
-Refer to Figure 6-21. In the after-tax equilibrium, how much revenue does the government collect from the tax on this good?

Accepted Answer

A) $210 
B) $345 
C) $420 
D) $480 
A) $210 
B) $345 
C) $420 
D) $480

Question 12

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,

Accepted Answer

A) the quantity of physicals demanded increases. 
B) there is shortage of physicals. 
C) the quantity of physicals supplied decreases. 
D) All of the above are correct. 
A) the quantity of physicals demanded increases. 
B) there is shortage of physicals. 
C) the quantity of physicals supplied decreases. 
D) All of the above are correct.

Question 13

The price received by sellers in a market will increase if the government decreases a

Accepted Answer

A) binding price floor in that market. 
B) binding price ceiling in that market. 
C) tax on the good sold in that market. 
D) None of the above is correct. 
A) binding price floor in that market. 
B) binding price ceiling in that market. 
C) tax on the good sold in that market. 
D) None of the above is correct.

Question 14

If a tax is imposed on the buyers of a product, then the tax burden will fall entirely on the buyers.

Accepted Answer

A) True 
 B)False

Question 15

The imposition of a binding price floor on a market

Accepted Answer

A) causes quantity demanded to be greater than quantity supplied. 
B) causes quantity demanded to be less than quantity supplied. 
C) causes quantity demanded to be equal to quantity supplied. 
D) causes a decrease in demand. 
A) causes quantity demanded to be greater than quantity supplied. 
B) causes quantity demanded to be less than quantity supplied. 
C) causes quantity demanded to be equal to quantity supplied. 
D) causes a decrease in demand.

Question 16

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 17

Figure 6-36  
-Refer to Figure 6-36. If the government places a $2 tax in the market, the seller bears $1 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 18

Figure 6-31   ​
-Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30. The effect of this price ceiling would be ​

Accepted Answer

A) nonbinding and cause a shortage of 50 units. 
B) ​binding and cause a shortage of 50 units. 
C) ​binding and cause a shortage of 20 units. 
D) nonbinding and have no effect on the market. 
A) nonbinding and cause a shortage of 50 units. 
B) ​binding and cause a shortage of 50 units. 
C) ​binding and cause a shortage of 20 units. 
D) nonbinding and have no effect on the market.

Question 19

A $1.50 tax levied on the buyers of pomegranate juice will shift the demand curve

Accepted Answer

A) upward by exactly $1.50. 
B) upward by less than $1.50. 
C) downward by exactly $1.50. 
D) downward by less than $1.50. 
A) upward by exactly $1.50. 
B) upward by less than $1.50. 
C) downward by exactly $1.50. 
D) downward by less than $1.50.

Question 20

When OPEC raised the price of crude oil in the 1970s, it caused the

Accepted Answer

A) demand for gasoline to increase. 
B) demand for gasoline to decrease. 
C) supply of gasoline to increase. 
D) supply of gasoline to decrease. 
A) demand for gasoline to increase. 
B) demand for gasoline to decrease. 
C) supply of gasoline to increase. 
D) supply of gasoline to decrease.

Exam 6: Supply, Demand, and Government Policies

Figure 6-26 -Refer to Figure 6-26. The effective price received by sellers after the tax is imposed is

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $20 per ticket, then the

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

Figure 6-26 -Refer to Figure 6-26. The price paid by buyers after the tax is imposed is

When a price floor is binding, is the price floor set above or below the market equilibrium price?

If the government levies a $5 tax per MP3 player on buyers of MP3 players, then the price paid by buyers of MP3 players would likely

Which of the following statements about the effects of rent control is correct?

A binding minimum wage tends to

If the minimum wage exceeds the equilibrium wage, then

Figure 6-21 -Refer to Figure 6-21. In the after-tax equilibrium, how much revenue does the government collect from the tax on this good?

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,

The price received by sellers in a market will increase if the government decreases a

If a tax is imposed on the buyers of a product, then the tax burden will fall entirely on the buyers.

The imposition of a binding price floor on a market

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 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the seller bears $1 of the tax burden.

Figure 6-31 ​ -Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30. The effect of this price ceiling would be ​

A $1.50 tax levied on the buyers of pomegranate juice will shift the demand curve

When OPEC raised the price of crude oil in the 1970s, it caused the

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

Filters

Figure 6-31 -Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30. The effect of this price ceiling would be