Question 1

Figure 6-25  
-Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Accepted Answer

A) $5. 
B) $6. 
C) $7. 
D) $8. 
A) $5. 
B) $6. 
C) $7. 
D) $8.

Question 2

Which of the following is correct? A tax burden

Accepted Answer

A) falls more heavily on the side of the market that is more elastic. 
B) falls more heavily on the side of the market that is less elastic. 
C) falls more heavily on the side of the market that is closest to unit elastic. 
D) is distributed independently of the relative elasticities of supply and demand. 
A) falls more heavily on the side of the market that is more elastic. 
B) falls more heavily on the side of the market that is less elastic. 
C) falls more heavily on the side of the market that is closest to unit elastic. 
D) is distributed independently of the relative elasticities of supply and demand.

Question 3

If the government wants to reduce the burning of fossil fuels, it should impose a tax on

Accepted Answer

A) buyers of gasoline. 
B) sellers of gasoline. 
C) either buyers or sellers of gasoline. 
D) whichever side of the market is less elastic. 
A) buyers of gasoline. 
B) sellers of gasoline. 
C) either buyers or sellers of gasoline. 
D) whichever side of the market is less elastic.

Question 4

Figure 6-14  
-Refer to Figure 6-14. If the horizontal line on the graph represents a price ceiling, then the price ceiling 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 5

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not correct?

Accepted Answer

A) Economists have two roles: scientist and policy adviser. 
B) As scientists, economists develop and test theories to explain the world around them. 
C) Economic policies rarely have effects that their architects did not intend or anticipate. 
D) As policy advisers, economists use their theories to help change the world for the better. 
A) Economists have two roles: scientist and policy adviser. 
B) As scientists, economists develop and test theories to explain the world around them. 
C) Economic policies rarely have effects that their architects did not intend or anticipate. 
D) As policy advisers, economists use their theories to help change the world for the better.

Question 7

Figure 6-6  
-Refer to Figure 6-6. Which of the following statements is correct?

Accepted Answer

A) A price ceiling set at $12 would be binding, but a price ceiling set at $8 would not be binding. 
B) A price floor set at $8 would be binding, but a price ceiling set at $8 would not be binding. 
C) A price ceiling set at $9 would result in a surplus. 
D) A price floor set at $11 would result in a surplus. 
A) A price ceiling set at $12 would be binding, but a price ceiling set at $8 would not be binding. 
B) A price floor set at $8 would be binding, but a price ceiling set at $8 would not be binding. 
C) A price ceiling set at $9 would result in a surplus. 
D) A price floor set at $11 would result in a surplus.

Question 8

Figure 6-21  
-Refer to Figure 6-21. The price that buyers pay after the tax is imposed is

Accepted Answer

A) $8.00. 
B) $9.00. 
C) $10.50. 
D) $12.00. 
A) $8.00. 
B) $9.00. 
C) $10.50. 
D) $12.00.

Question 9

Renters of rent-controlled apartments will likely benefit from both lower rents and higher quality of apartments.

Accepted Answer

A) True 
 B)False

Question 10

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Accepted Answer

A) True 
 B)False

Question 11

Figure 6-3
Panel (a)
Panel (b)    
-Refer to Figure 6-3. A binding price floor is shown in

Accepted Answer

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

Question 12

A key lesson from the payroll tax is that the

Accepted Answer

A) tax is a tax solely on workers. 
B) tax is a tax solely on firms that hire workers. 
C) tax eliminates any wedge that might exist between the wage that firms pay and the wage that workers receive. 
D) true burden of a tax cannot be legislated. 
A) tax is a tax solely on workers. 
B) tax is a tax solely on firms that hire workers. 
C) tax eliminates any wedge that might exist between the wage that firms pay and the wage that workers receive. 
D) true burden of a tax cannot be legislated.

Question 13

If a price ceiling is not binding, then

Accepted Answer

A) there will be a surplus in the market. 
B) there will be a shortage in the market. 
C) the market will be less efficient than it would be without the price ceiling. 
D) there will be no effect on the market price or quantity sold. 
A) there will be a surplus in the market. 
B) there will be a shortage in the market. 
C) the market will be less efficient than it would be without the price ceiling. 
D) there will be no effect on the market price or quantity sold.

Question 14

​In a market with a binding price control,

Accepted Answer

A) there is an imbalance between the quantity supplied by sellers and the quantity demanded by buyers. 
B) ​the costs of production are fully reflected in the price paid. 
C) ​the price observe reflects the scarcity of the good. 
D) ​all of the above are true. 
A) there is an imbalance between the quantity supplied by sellers and the quantity demanded by buyers. 
B) ​the costs of production are fully reflected in the price paid. 
C) ​the price observe reflects the scarcity of the good. 
D) ​all of the above are true.

Question 15

A binding price floor causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 16

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

Accepted Answer

A) True 
 B)False

Question 17

Figure 6-22  
-Refer to Figure 6-22. Suppose the same supply and demand curves apply, and a tax of the same amount per unit as shown here is imposed. Now, however, the buyers of the good, rather than the sellers, are required to pay the tax to the government. After the buyers pay the tax, relative to the case depicted in the figure, the burden on buyers will be

Accepted Answer

A) larger, and the burden on sellers will be smaller. 
B) smaller, and the burden on sellers will be larger. 
C) the same, and the burden on sellers will be the same. 
D) The relative burdens in the two cases cannot be determined without further information. 
A) larger, and the burden on sellers will be smaller. 
B) smaller, and the burden on sellers will be larger. 
C) the same, and the burden on sellers will be the same. 
D) The relative burdens in the two cases cannot be determined without further information.

Question 18

When a tax is placed on the buyers of lemonade, the

Accepted Answer

A) sellers bear the entire burden of the tax. 
B) buyers bear the entire burden of the tax. 
C) burden of the tax will be always be equally divided between the buyers and the sellers. 
D) burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal. 
A) sellers bear the entire burden of the tax. 
B) buyers bear the entire burden of the tax. 
C) burden of the tax will be always be equally divided between the buyers and the sellers. 
D) burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal.

Question 19

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 sellers is

Accepted Answer

A) $6. 
B) $8. 
C) $10. 
D) $14. 
A) $6. 
B) $8. 
C) $10. 
D) $14.

Question 20

Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

Accepted Answer

A) Buyers bear the entire burden of the tax. 
B) Sellers bear the entire burden of the tax. 
C) Buyers and sellers share the burden of the tax. 
D) We have to know whether it is the buyers or the sellers that are required to pay the tax to the government in order to make this determination. 
A) Buyers bear the entire burden of the tax. 
B) Sellers bear the entire burden of the tax. 
C) Buyers and sellers share the burden of the tax. 
D) We have to know whether it is the buyers or the sellers that are required to pay the tax to the government in order to make this determination.

Exam 6: Supply, Demand, and Government Policies

Figure 6-25 -Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Which of the following is correct? A tax burden

If the government wants to reduce the burning of fossil fuels, it should impose a tax on

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

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Which of the following is not correct?

Figure 6-6 -Refer to Figure 6-6. Which of the following statements is correct?

Figure 6-21 -Refer to Figure 6-21. The price that buyers pay after the tax is imposed is

Renters of rent-controlled apartments will likely benefit from both lower rents and higher quality of apartments.

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. A binding price floor is shown in

A key lesson from the payroll tax is that the

If a price ceiling is not binding, then

​In a market with a binding price control,

A binding price floor causes a shortage in the market.

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

When a tax is placed on the buyers of lemonade, the

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 sellers is

Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

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

In a market with a binding price control,