Question 1

In the United States, before OPEC increased the price of crude oil in 1973, there was

Accepted Answer

A) no price ceiling on gasoline. 
B) a nonbinding price ceiling on gasoline. 
C) a binding price ceiling on gasoline. 
D) a nonbinding price floor on gasoline. 
A) no price ceiling on gasoline. 
B) a nonbinding price ceiling on gasoline. 
C) a binding price ceiling on gasoline. 
D) a nonbinding price floor on gasoline.

Question 2

Figure 6-23  
-Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

Accepted Answer

A) $3. 
B) $4. 
C) $5. 
D) $6. 
A) $3. 
B) $4. 
C) $5. 
D) $6.

Question 3

Figure 6-27
This figure shows the market demand and market supply curves for good Z.  
-Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A) $16 
B) between $16 and $20 
C) between $20 and $22 
D) $22 
A) $16 
B) between $16 and $20 
C) between $20 and $22 
D) $22

Question 4

When a tax is levied on buyers of tea,

Accepted Answer

A) buyers of tea and sellers of tea both are made worse off. 
B) buyers of tea are made worse off, and the well-being of sellers is unaffected. 
C) buyers of tea are made worse off, and sellers of tea are made better off. 
D) the well-being of both buyers of tea and sellers of tea is unaffected. 
A) buyers of tea and sellers of tea both are made worse off. 
B) buyers of tea are made worse off, and the well-being of sellers is unaffected. 
C) buyers of tea are made worse off, and sellers of tea are made better off. 
D) the well-being of both buyers of tea and sellers of tea is unaffected.

Question 5

Figure 6-1
Panel (a)
Panel (b)    
-Refer to Figure 6-1. A binding price ceiling is shown in

Accepted Answer

A) panel (a) only. 
B) panel (b) only. 
C) both panel (a) and panel (b). 
D) neither panel (a) nor panel (b). 
A) panel (a) only. 
B) panel (b) only. 
C) both panel (a) and panel (b). 
D) neither panel (a) nor panel (b).

Question 6

Figure 6-13
This figure shows the market demand and market supply curves for good X.  
-Refer to Figure 6-13. Which of the following statements is not correct?

Accepted Answer

A) A price ceiling set at $4 would be binding, but a price ceiling set at $6 would not be binding. 
B) A price floor set at $7 would be binding, but a price floor set at $4 would not be binding. 
C) A price ceiling set at $3.50 would result in a surplus. 
D) A price floor set at $6.50 would result in a surplus. 
A) A price ceiling set at $4 would be binding, but a price ceiling set at $6 would not be binding. 
B) A price floor set at $7 would be binding, but a price floor set at $4 would not be binding. 
C) A price ceiling set at $3.50 would result in a surplus. 
D) A price floor set at $6.50 would result in a surplus.

Question 7

Figure 6-24  
-Refer to Figure 6-24. The per-unit burden of the tax on buyers of the good is

Accepted Answer

A) $2. 
B) $4. 
C) $6. 
D) $8. 
A) $2. 
B) $4. 
C) $6. 
D) $8.

Question 8

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Accepted Answer

A) True 
 B)False

Question 9

​Rent controls can cause

Accepted Answer

A) ​a decline in the quality of housing available for rent. 
B) ​the development of a black market to allocate apartments to renters. 
C) ​longer search times for renters attempting to locate an apartment. 
D) ​all of these are possible results of rent controls. 
A) ​a decline in the quality of housing available for rent. 
B) ​the development of a black market to allocate apartments to renters. 
C) ​longer search times for renters attempting to locate an apartment. 
D) ​all of these are possible results of rent controls.

Question 10

In a particular market, market demand is given by the equation   
and market supply is given by the equation   
Suppose a per-unit tax is imposed that reduces the number of units bought and sold in the market to 25 units. What is the size of the tax, and who bears the greater burden of the tax, buyers or sellers?

Accepted Answer

If the number of transactions falls to 2

Question 11

Figure 6-34  
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, what price will buyers pay per unit after the tax is imposed?

Accepted Answer

With a $6 tax per un

Question 12

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

Accepted Answer

A) nonbinding price floor on gasoline to become binding. 
B) binding price floor on gasoline to become nonbinding. 
C) nonbinding price ceiling on gasoline to become binding. 
D) binding price ceiling on gasoline to become nonbinding. 
A) nonbinding price floor on gasoline to become binding. 
B) binding price floor on gasoline to become nonbinding. 
C) nonbinding price ceiling on gasoline to become binding. 
D) binding price ceiling on gasoline to become nonbinding.

Question 13

Figure 6-18
The vertical distance between points A and B represents the tax in the market.  
-Refer to Figure 6-18. The amount of the tax per unit is

Accepted Answer

A) $6. 
B) $8. 
C) $14. 
D) $18. 
A) $6. 
B) $8. 
C) $14. 
D) $18.

Question 14

Figure 6-31  
-Refer to Figure 6-31. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

There woul

Question 15

Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elastic. A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

Accepted Answer

A) less than $0.50. 
B) $0.50. 
C) between $0.50 and $1. 
D) $1. 
A) less than $0.50. 
B) $0.50. 
C) between $0.50 and $1. 
D) $1.

Question 16

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. What are the equilibrium price and quantity in the market for good X?

Accepted Answer

The equilibrium pric

Question 17

Figure 6-11  
-Refer to Figure 6-11. If the government imposes a price floor at $10, it would be

Accepted Answer

A) binding if market demand is Demand A or Demand B. 
B) non-binding if market demand is Demand A or Demand B. 
C) binding if market demand is Demand A and non-binding if market demand is Demand B. 
D) non-binding if market demand is Demand A and binding if market demand is Demand B. 
A) binding if market demand is Demand A or Demand B. 
B) non-binding if market demand is Demand A or Demand B. 
C) binding if market demand is Demand A and non-binding if market demand is Demand B. 
D) non-binding if market demand is Demand A and binding if market demand is Demand B.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Figure 6-14  
-Refer to Figure 6-14. If the horizontal line on the graph represents a price floor, then the price floor is

Accepted Answer

A) binding and creates a shortage of 20 units of the good. 
B) binding and creates a shortage of 40 units of the good. 
C) not binding but creates a shortage of 40 units of the good. 
D) not binding, and there will be no surplus or shortage of the good. 
A) binding and creates a shortage of 20 units of the good. 
B) binding and creates a shortage of 40 units of the good. 
C) not binding but creates a shortage of 40 units of the good. 
D) not binding, and there will be no surplus or shortage of the good.

Question 20

A tax on sellers reduces the size of a market.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

In the United States, before OPEC increased the price of crude oil in 1973, there was

Figure 6-23 -Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

When a tax is levied on buyers of tea,

Figure 6-1 Panel (a) Panel (b) -Refer to Figure 6-1. A binding price ceiling is shown in

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. Which of the following statements is not correct?

Figure 6-24 -Refer to Figure 6-24. The per-unit burden of the tax on buyers of the good is

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

​Rent controls can cause

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, what price will buyers pay per unit after the tax is imposed?

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

Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The amount of the tax per unit is

Figure 6-31 -Refer to Figure 6-31. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elastic. A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

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. What are the equilibrium price and quantity in the market for good X?

Figure 6-11 -Refer to Figure 6-11. If the government imposes a price floor at $10, it would be

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

Figure 6-14 -Refer to Figure 6-14. If the horizontal line on the graph represents a price floor, then the price floor is

A tax on sellers reduces the size of a 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

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

Rent controls can cause