Question 1

A price floor is

Accepted Answer

A) a legal minimum on the price at which a good can be sold. 
B) 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 floor. 
C) a source of inefficiency in a market. 
D) All of the above are correct. 
A) a legal minimum on the price at which a good can be sold. 
B) 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 floor. 
C) a source of inefficiency in a market. 
D) All of the above are correct.

Question 2

When a binding price ceiling is imposed on a market to benefit buyers,

Accepted Answer

A) every buyer in the market benefits. 
B) every buyer and seller in the market benefits. 
C) every buyer who wants to buy the good will be able to do so, but only if he waits in long lines. 
D) some buyers will not be able to buy any amount of the good. 
A) every buyer in the market benefits. 
B) every buyer and seller in the market benefits. 
C) every buyer who wants to buy the good will be able to do so, but only if he waits in long lines. 
D) some buyers will not be able to buy any amount of the good.

Question 3

The rationing mechanisms that develop under binding price floors are usually efficient.

Accepted Answer

A) True 
 B)False

Question 4

Figure 6-1
Panel (a)
Panel (b)    
-Refer to Figure 6-1. In which panel(s) of the figure would there be a shortage of the good at the price ceiling?

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 5

​Figure 6-32  
-​Refer to Figure 6-32. Which of following statements is true based upon the conditions in the market?

Accepted Answer

A) ​a shortage will develop when a price ceiling is imposed at a price of $10. 
B) ​a surplus will develop when a price floor is imposed at a price of $8. 
C) ​a surplus will develop when a price floor is imposed at a price of $12. 
D) ​a shortage will develop when a price ceiling is imposed at a price of $14. 
A) ​a shortage will develop when a price ceiling is imposed at a price of $10. 
B) ​a surplus will develop when a price floor is imposed at a price of $8. 
C) ​a surplus will develop when a price floor is imposed at a price of $12. 
D) ​a shortage will develop when a price ceiling is imposed at a price of $14.

Question 6

Figure 6-16  
-Refer to Figure 6-16. In this market, a minimum wage of $7.25 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

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

Accepted Answer

A) imposes a binding price floor in that market. 
B) decreases a binding price ceiling in that market. 
C) decreases a tax on the good sold in that market. 
D) increases a binding price floor in that market. 
A) imposes a binding price floor in that market. 
B) decreases a binding price ceiling in that market. 
C) decreases a tax on the good sold in that market. 
D) increases a binding price floor in that market.

Question 8

Since the FICA tax is split equally between employers and employees, we can conclude that the incidence of this tax is also equally shared.
​

Accepted Answer

A) True 
 B)False

Question 9

When a tax is placed on the sellers of cell phones, the size of the cell phone market

Accepted Answer

A) and the effective price received by sellers both increase. 
B) increases, but the effective price received by sellers decreases. 
C) decreases, but the effective price received by sellers increases. 
D) and the effective price received by sellers both decrease. 
A) and the effective price received by sellers both increase. 
B) increases, but the effective price received by sellers decreases. 
C) decreases, but the effective price received by sellers increases. 
D) and the effective price received by sellers both decrease.

Question 10

Figure 6-35  
-Refer to Figure 6-35. A price ceiling set at $30 would create a shortage of 20 units.

Accepted Answer

A) True 
 B)False

Question 11

A price ceiling caused the gasoline shortage of 1973 in the United States.

Accepted Answer

A) True 
 B)False

Question 12

After a binding price floor becomes effective, a

Accepted Answer

A) smaller quantity of the good is bought and sold. 
B) a larger quantity of the good is demanded. 
C) a smaller quantity of the good is supplied. 
D) All of the above are correct. 
A) smaller quantity of the good is bought and sold. 
B) a larger quantity of the good is demanded. 
C) a smaller quantity of the good is supplied. 
D) All of the above are correct.

Question 13

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 14

The quantity sold in a market will increase if the government

Accepted Answer

A) decreases a binding price floor in that market. 
B) decreases a binding price ceiling in that market. 
C) increases a tax on the good sold in that market. 
D) More than one of the above is correct. 
A) decreases a binding price floor in that market. 
B) decreases a binding price ceiling in that market. 
C) increases a tax on the good sold in that market. 
D) More than one of the above is correct.

Question 15

Which of the following would not interfere with market equilibria?

Accepted Answer

A) a minimum wage 
B) a rent control 
C) a non-binding price floor 
D) a binding price ceiling 
A) a minimum wage 
B) a rent control 
C) a non-binding price floor 
D) a binding price ceiling

Question 16

When a tax is imposed on the buyers of a good, the demand curve shifts

Accepted Answer

A) upward by the amount of the tax. 
B) downward by the amount of the tax. 
C) upward by less than the amount of the tax. 
D) downward by less than the amount of the tax. 
A) upward by the amount of the tax. 
B) downward by the amount of the tax. 
C) upward by less than the amount of the tax. 
D) downward by less than the amount of the tax.

Question 17

Figure 6-33  
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

Accepted Answer

Buyers wil

Question 18

The price paid by buyers in a market will increase if the government

Accepted Answer

A) decreases a binding price floor in that market. 
B) increases a binding price ceiling in that market. 
C) decreases a tax on the good sold in that market. 
D) imposes a binding price ceiling in that market. 
A) decreases a binding price floor in that market. 
B) increases a binding price ceiling in that market. 
C) decreases a tax on the good sold in that market. 
D) imposes a binding price ceiling in that market.

Question 19

Price ceilings are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 20

Table 6-6  
-Refer to Table 6-6. If the government set a price floor at $2, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at $2 would

Exam 6: Supply, Demand, and Government Policies

A price floor is

When a binding price ceiling is imposed on a market to benefit buyers,

The rationing mechanisms that develop under binding price floors are usually efficient.

Figure 6-1 Panel (a) Panel (b) -Refer to Figure 6-1. In which panel(s) of the figure would there be a shortage of the good at the price ceiling?

​Figure 6-32 -​Refer to Figure 6-32. Which of following statements is true based upon the conditions in the market?

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $7.25 is

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

Since the FICA tax is split equally between employers and employees, we can conclude that the incidence of this tax is also equally shared. ​

When a tax is placed on the sellers of cell phones, the size of the cell phone market

Figure 6-35 -Refer to Figure 6-35. A price ceiling set at $30 would create a shortage of 20 units.

A price ceiling caused the gasoline shortage of 1973 in the United States.

After a binding price floor becomes effective, a

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

The quantity sold in a market will increase if the government

Which of the following would not interfere with market equilibria?

When a tax is imposed on the buyers of a good, the demand curve shifts

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

The price paid by buyers in a market will increase if the government

Price ceilings are typically imposed to benefit sellers.

Table 6-6 -Refer to Table 6-6. If the government set a price floor at $2, would there be a shortage or surplus, and how large would be the shortage/surplus?

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 6-32 -Refer to Figure 6-32. Which of following statements is true based upon the conditions in the market?

Since the FICA tax is split equally between employers and employees, we can conclude that the incidence of this tax is also equally shared.