Question 1

A tax on sellers increases the quantity of the good sold in the market.

Accepted Answer

A) True 
 B)False

Question 2

Price floors are typically imposed to benefit buyers.

Accepted Answer

A) True 
 B)False

Question 3

The minimum wage is more often binding for teenagers than for other members of the labor force.

Accepted Answer

A) True 
 B)False

Question 4

Figure 6-18
The vertical distance between points A and B represents the tax in the market.  
-Refer to Figure 6-18. The effective price that sellers receive after the tax is imposed is

Accepted Answer

A) $6. 
B) $10. 
C) $16. 
D) $24. 
A) $6. 
B) $10. 
C) $16. 
D) $24.

Question 5

The minimum wage has its greatest impact on the market for teenage labor.

Accepted Answer

A) True 
 B)False

Question 6

Figure 6-35  
-Refer to Figure 6-35. A price ceiling set at $70 would create a shortage of 40 units.

Accepted Answer

A) True 
 B)False

Question 7

Figure 6-36  
-Refer to Figure 6-36. If the government places a $2 tax in the market, the seller receives $4.

Accepted Answer

A) True 
 B)False

Question 8

If a nonbinding price ceiling is imposed on a market, then the

Accepted Answer

A) quantity sold in the market will decrease. 
B) quantity sold in the market will stay the same. 
C) price in the market will increase. 
D) price in the market will decrease. 
A) quantity sold in the market will decrease. 
B) quantity sold in the market will stay the same. 
C) price in the market will increase. 
D) price in the market will decrease.

Question 9

Figure 6-4  
-Refer to Figure 6-4. A government-imposed price of $6 in this market is an example of a

Accepted Answer

A) binding price ceiling that creates a shortage. 
B) non-binding price ceiling that creates a shortage. 
C) binding price floor that creates a surplus. 
D) non-binding price floor that creates a surplus. 
A) binding price ceiling that creates a shortage. 
B) non-binding price ceiling that creates a shortage. 
C) binding price floor that creates a surplus. 
D) non-binding price floor that creates a surplus.

Question 10

A price floor set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 11

Figure 6-22  
-Refer to Figure 6-22. How much tax revenue does this tax generate for the government?

Accepted Answer

A) $80. 
B) $60. 
C) $15. 
D) $45. 
A) $80. 
B) $60. 
C) $15. 
D) $45.

Question 12

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 $6 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 13

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. Which of the following is correct?

Accepted Answer

A) Buyers and sellers will share the burden of the tax equally. 
B) Buyers will bear more of the burden of the tax than sellers will. 
C) Sellers will bear more of the burden of the tax than buyers will. 
D) Any of the above is possible. 
A) Buyers and sellers will share the burden of the tax equally. 
B) Buyers will bear more of the burden of the tax than sellers will. 
C) Sellers will bear more of the burden of the tax than buyers will. 
D) Any of the above is possible.

Question 14

A binding price floor may not help all sellers, but it does not hurt any sellers.

Accepted Answer

A) True 
 B)False

Question 15

If a price ceiling is not binding, then it will have no effect on the market.

Accepted Answer

A) True 
 B)False

Question 16

If the supply curve is more price elastic than the demand curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Accepted Answer

When the supply curve is more price elas

Question 17

Figure 6-8  
-Refer to Figure 6-8. If the government imposes a price ceiling of $2 on this market, then there will be

Accepted Answer

A) no shortage of the good. 
B) a shortage of 10 units of the good. 
C) a shortage of 20 units of the good. 
D) a shortage of 30 units of the good. 
A) no shortage of the good. 
B) a shortage of 10 units of the good. 
C) a shortage of 20 units of the good. 
D) a shortage of 30 units of the good.

Question 18

A binding minimum wage may not help all workers, but it does not hurt any workers.

Accepted Answer

A) True 
 B)False

Question 19

Table 6-2  
-Refer to Table 6-2. A price floor set at $20 results in

Accepted Answer

A) 75 units sold. 
B) 125 units sold. 
C) 200 units sold. 
D) 275 units sold. 
A) 75 units sold. 
B) 125 units sold. 
C) 200 units sold. 
D) 275 units sold.

Question 20

One disadvantage of government subsidies over price controls is that subsidies

Accepted Answer

A) prevent the attainment of equilibrium in the markets in which they are imposed. 
B) make higher taxes necessary. 
C) are always unfair to those with low incomes. 
D) cause unemployment. 
A) prevent the attainment of equilibrium in the markets in which they are imposed. 
B) make higher taxes necessary. 
C) are always unfair to those with low incomes. 
D) cause unemployment.

Exam 6: Supply, Demand, and Government Policies

A tax on sellers increases the quantity of the good sold in the market.

Price floors are typically imposed to benefit buyers.

The minimum wage is more often binding for teenagers than for other members of the labor force.

Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The effective price that sellers receive after the tax is imposed is

The minimum wage has its greatest impact on the market for teenage labor.

Figure 6-35 -Refer to Figure 6-35. A price ceiling set at $70 would create a shortage of 40 units.

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the seller receives $4.

If a nonbinding price ceiling is imposed on a market, then the

Figure 6-4 -Refer to Figure 6-4. A government-imposed price of $6 in this market is an example of a

A price floor set above the equilibrium price is not binding.

Figure 6-22 -Refer to Figure 6-22. How much tax revenue does this tax generate for the government?

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 $6 on this market, then there will be

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. Which of the following is correct?

A binding price floor may not help all sellers, but it does not hurt any sellers.

If a price ceiling is not binding, then it will have no effect on the market.

If the supply curve is more price elastic than the demand curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Figure 6-8 -Refer to Figure 6-8. If the government imposes a price ceiling of $2 on this market, then there will be

A binding minimum wage may not help all workers, but it does not hurt any workers.

Table 6-2 -Refer to Table 6-2. A price floor set at $20 results in

One disadvantage of government subsidies over price controls is that subsidies

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

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