Question 1

​Figure 6-33
The diagram shows the effect of a tax as measured by the distance between J and K.  
-Refer to Figure 6-33. Based upon the diagram,​

Accepted Answer

A) ​more of the incidence of the tax is on buyers, since the demand curve is more elastic than the supply curve. 
B) ​more of the incidence of the tax is on sellers, since the demand curve is less elastic than is the supply curve . 
C) more of the incidence of the tax is on sellers, since supply is more inelastic than demand.​ 
D) ​more of the incidence of the tax is on buyers, since supply is more inelastic than demand. 
A) ​more of the incidence of the tax is on buyers, since the demand curve is more elastic than the supply curve. 
B) ​more of the incidence of the tax is on sellers, since the demand curve is less elastic than is the supply curve . 
C) more of the incidence of the tax is on sellers, since supply is more inelastic than demand.​ 
D) ​more of the incidence of the tax is on buyers, since supply is more inelastic than demand.

Question 2

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

Accepted Answer

A) $6. 
B) $8. 
C) $14. 
D) $24. 
A) $6. 
B) $8. 
C) $14. 
D) $24.

Question 3

As a rationing mechanism, discrimination according to seller bias is

Accepted Answer

A) efficient and fair. 
B) efficient, but potentially unfair. 
C) inefficient, but fair. 
D) inefficient and potentially unfair. 
A) efficient and fair. 
B) efficient, but potentially unfair. 
C) inefficient, but fair. 
D) inefficient and potentially unfair.

Question 4

In a competitive market free of government regulation,

Accepted Answer

A) price adjusts until quantity demanded is greater than quantity supplied. 
B) price adjusts until quantity demanded is less than quantity supplied. 
C) price adjusts until quantity demanded equals quantity supplied. 
D) supply adjusts to meet demand at every price. 
A) price adjusts until quantity demanded is greater than quantity supplied. 
B) price adjusts until quantity demanded is less than quantity supplied. 
C) price adjusts until quantity demanded equals quantity supplied. 
D) supply adjusts to meet demand at every price.

Question 5

Under rent control, tenants can expect

Accepted Answer

A) lower rent and higher quality housing. 
B) lower rent and lower quality housing. 
C) higher rent and a shortage of rental housing. 
D) higher rent and a surplus of rental housing. 
A) lower rent and higher quality housing. 
B) lower rent and lower quality housing. 
C) higher rent and a shortage of rental housing. 
D) higher rent and a surplus of rental housing.

Question 6

Figure 6-6  
-Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism?

Accepted Answer

A) a price ceiling set at $8 
B) a price ceiling set at $6 
C) a price floor set at $8 
D) a price floor set at $6 
A) a price ceiling set at $8 
B) a price ceiling set at $6 
C) a price floor set at $8 
D) a price floor set at $6

Question 7

Figure 6-20  
-Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A) $5 
B) between $5 and $10 
C) between $10 and $14 
D) $14 
A) $5 
B) between $5 and $10 
C) between $10 and $14 
D) $14

Question 8

Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

Accepted Answer

A) True 
 B)False

Question 9

Figure 6-11  
-Refer to Figure 6-11. If the government imposes a price ceiling at $6, 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 10

Figure 6-7  
-Refer to Figure 6-7. Which of the following price controls would cause a shortage of 20 units of the good?

Accepted Answer

A) a price ceiling set at $6 
B) a price ceiling set at $5 
C) a price floor set at $9 
D) a price floor set at $8 
A) a price ceiling set at $6 
B) a price ceiling set at $5 
C) a price floor set at $9 
D) a price floor set at $8

Question 11

Figure 6-19  
-Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. How much will sellers receive 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 12

Figure 6-1
Panel (a)
Panel (b)    
-Refer to Figure 6-1. The price ceiling shown in panel (b)

Accepted Answer

A) is not binding. 
B) creates a surplus. 
C) creates a shortage. 
D) Both a) and b) are correct. 
A) is not binding. 
B) creates a surplus. 
C) creates a shortage. 
D) Both a) and b) are correct.

Question 13

How is the burden of a tax divided?
(i)When the tax is levied on the sellers, the sellers bear a higher proportion of the tax burden.
(ii)When the tax is levied on the buyers, the buyers bear a higher proportion of the tax burden.
(iii)Regardless of whether the tax is levied on the buyers or the sellers, the buyers and sellers bear an equal proportion of the tax burden.
(iv)Regardless of whether the tax is levied on the buyers or the sellers, the buyers and sellers bear some proportion of the tax burden.

Accepted Answer

A) (i) and (ii) only 
B) (iv) only 
C) (i), (ii), and (iii) only 
D) (i), (ii), and (iv) only 
A) (i) and (ii) only 
B) (iv) only 
C) (i), (ii), and (iii) only 
D) (i), (ii), and (iv) only

Question 14

States in the U.S. may mandate minimum wages above the federal level.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is correct?

Accepted Answer

A) Rent control and the minimum wage are both examples of price ceilings. 
B) Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor. 
C) Rent control is an example of a price floor, and the minimum wage is an example of a price ceiling. 
D) Rent control and the minimum wage are both examples of price floors. 
A) Rent control and the minimum wage are both examples of price ceilings. 
B) Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor. 
C) Rent control is an example of a price floor, and the minimum wage is an example of a price ceiling. 
D) Rent control and the minimum wage are both examples of price floors.

Question 16

Define a price ceiling.

Accepted Answer

A price ceiling is a

Question 17

A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

Accepted Answer

A) True 
 B)False

Question 18

Figure 6-13
This figure shows the market demand and market supply curves for good X.  
-Refer to Figure 6-13. If the government imposes a price ceiling of $4 on this market, then there will be

Accepted Answer

A) no shortage. 
B) a shortage of 5 units. 
C) a shortage of 10 units. 
D) a shortage of 20 units. 
A) no shortage. 
B) a shortage of 5 units. 
C) a shortage of 10 units. 
D) a shortage of 20 units.

Question 19

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

Accepted Answer

A) causes a shortage of 45 units of the good. 
B) makes it necessary for sellers to ration the good. 
C) is not binding because it is set below the equilibrium price. 
D) causes a shortage of 40 units of the good. 
A) causes a shortage of 45 units of the good. 
B) makes it necessary for sellers to ration the good. 
C) is not binding because it is set below the equilibrium price. 
D) causes a shortage of 40 units of the good.

Question 20

A tax imposed on the sellers of a good will lower the

Accepted Answer

A) price paid by buyers and lower the equilibrium quantity. 
B) price paid by buyers and raise the equilibrium quantity. 
C) effective price received by sellers and lower the equilibrium quantity. 
D) effective price received by sellers and raise the equilibrium quantity. 
A) price paid by buyers and lower the equilibrium quantity. 
B) price paid by buyers and raise the equilibrium quantity. 
C) effective price received by sellers and lower the equilibrium quantity. 
D) effective price received by sellers and raise the equilibrium quantity.

Exam 6: Supply, Demand, and Government Policies

​Figure 6-33 The diagram shows the effect of a tax as measured by the distance between J and K. -Refer to Figure 6-33. Based upon the diagram,​

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

As a rationing mechanism, discrimination according to seller bias is

In a competitive market free of government regulation,

Under rent control, tenants can expect

Figure 6-6 -Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism?

Figure 6-20 -Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

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

Figure 6-7 -Refer to Figure 6-7. Which of the following price controls would cause a shortage of 20 units of the good?

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

Figure 6-1 Panel (a) Panel (b) -Refer to Figure 6-1. The price ceiling shown in panel (b)

States in the U.S. may mandate minimum wages above the federal level.

Which of the following is correct?

Define a price ceiling.

A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. If the government imposes a price ceiling of $4 on this market, then there will be

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

A tax imposed on the sellers of a good will lower 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 6-33 The diagram shows the effect of a tax as measured by the distance between J and K. -Refer to Figure 6-33. Based upon the diagram,