Question 1

A binding minimum wage creates unemployment.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Figure 6-19
   ​
-Refer to Figure 6-19. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set

Question 4

Figure 6-2
   ​
-Refer to Figure 6-2. The price ceiling causes quantity

Accepted Answer

A) supplied to exceed quantity demanded by 60 units. 
B) supplied to exceed quantity demanded by 90 units. 
C) demanded to exceed quantity supplied by 30 units. 
D) demanded to exceed quantity supplied by 90 units. 
A) supplied to exceed quantity demanded by 60 units. 
B) supplied to exceed quantity demanded by 90 units. 
C) demanded to exceed quantity supplied by 30 units. 
D) demanded to exceed quantity supplied by 90 units.

Question 5

Figure 6-8
  
-Refer to Figure 6-8. When the price ceiling is enforced in this market and the supply curve for gasoline shifts from S1 to S2,

Accepted Answer

A) the market price will increase to P3. 
B) a surplus will occur at the new market price of P2. 
C) the market price will stay at P1. 
D) a shortage will occur at the new market price of P2. 
A) the market price will increase to P3. 
B) a surplus will occur at the new market price of P2. 
C) the market price will stay at P1. 
D) a shortage will occur at the new market price of P2.

Question 6

Suppose there is currently a tax of $100 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $100 per ticket to $80 per ticket, then the

Accepted Answer

A) demand curve will shift upward by $20, and the price paid by buyers will decrease by less than $20. 
B) demand curve will shift upward by $20, and the price paid by buyers will decrease by $20. 
C) supply curve will shift downward by $20, and the effective price received by sellers will increase by less than $20. 
D) supply curve will shift downward by $20, and the effective price received by sellers will increase by $20. 
A) demand curve will shift upward by $20, and the price paid by buyers will decrease by less than $20. 
B) demand curve will shift upward by $20, and the price paid by buyers will decrease by $20. 
C) supply curve will shift downward by $20, and the effective price received by sellers will increase by less than $20. 
D) supply curve will shift downward by $20, and the effective price received by sellers will increase by $20.

Question 7

Figure 6-11
​
  
-Refer to Figure 6-11. Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Accepted Answer

A) Less than 60 units 
B) 60 units 
C) Between 60 units and 100 units 
D) Greater than 100 units 
A) Less than 60 units 
B) 60 units 
C) Between 60 units and 100 units 
D) Greater than 100 units

Question 8

Define a price floor.

Accepted Answer

A price floor is a l

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Figure 6-5
  
-Refer to Figure 6-5. A government-imposed price of $12 in this market is an example of a

Accepted Answer

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

Question 11

When a free market for a good reaches equilibrium, anyone who is willing and able to pay the market price can buy the good.

Accepted Answer

A) True 
 B)False

Question 12

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-18
   ​
-Refer to Figure 6-18. If the government set a price floor at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at

Question 14

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

Accepted Answer

A) True 
 B)False

Question 15

Table 6-2
 $$\begin{array} { | l | l | l | } 
\hline \text { Price (\$) } & \begin{array} { l } 
\text { Quantity } \
\text { Demanded }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { Supplied }
\end{array} \
\hline 0 & 21 & 0 \
\hline 1 & 18 & 4 \
\hline 2 & 15 & 8 \
\hline 3 & 12 & 12 \
\hline 4 & 9 & 16 \
\hline 5 & 6 & 20 \
\hline 6 & 3 & 24 \
\hline 7 & 0 & 28 \
\hline
\end{array}$$
-Refer to Table 6-2. In this market, over what range of prices would a price ceiling set by the government be binding?

Accepted Answer

A price ceiling must be set be

Question 16

In a free market, the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

Accepted Answer

A) True 
 B)False

Question 17

Figure 6-17
   ​
-Refer to Figure 6-17. If the government places a $2 tax in the market, the seller bears $2 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 18

Taxes levied on sellers and taxes levied on buyers are equivalent.

Accepted Answer

A) True 
 B)False

Question 19

A payroll tax is a

Accepted Answer

A) fixed number of dollars that every firm must pay to the government for each worker that the firm hires. 
B) tax that each firm must pay to the government before the firm can hire workers and operate its business. 
C) tax on the wages that firms pay their workers. 
D) tax on all wages above the minimum wage. 
A) fixed number of dollars that every firm must pay to the government for each worker that the firm hires. 
B) tax that each firm must pay to the government before the firm can hire workers and operate its business. 
C) tax on the wages that firms pay their workers. 
D) tax on all wages above the minimum wage.

Question 20

Figure 6-10
The vertical distance between points A and B represents the tax in the market.
  
-Refer to Figure 6-10. The price that buyers pay after the tax is imposed is

Accepted Answer

A) $8. 
B) $10. 
C) $16. 
D) $24. 
A) $8. 
B) $10. 
C) $16. 
D) $24.

Exam 6: Supply, Demand, and Government Policies

A binding minimum wage creates unemployment.

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

Figure 6-19 ​ -Refer to Figure 6-19. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

Figure 6-2 ​ -Refer to Figure 6-2. The price ceiling causes quantity

Figure 6-8 -Refer to Figure 6-8. When the price ceiling is enforced in this market and the supply curve for gasoline shifts from S1 to S2,

Suppose there is currently a tax of $100 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $100 per ticket to $80 per ticket, then the

Figure 6-11 ​ -Refer to Figure 6-11. Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Define a price floor.

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

Figure 6-5 -Refer to Figure 6-5. A government-imposed price of $12 in this market is an example of a

When a free market for a good reaches equilibrium, anyone who is willing and able to pay the market price can buy the good.

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Figure 6-18 ​ -Refer to Figure 6-18. If the government set a price floor at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

In a free market, the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

Figure 6-17 ​ -Refer to Figure 6-17. If the government places a $2 tax in the market, the seller bears $2 of the tax burden.

Taxes levied on sellers and taxes levied on buyers are equivalent.

A payroll tax is a

Figure 6-10 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-10. The price that buyers pay after the tax is imposed is

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 Nations 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 6-19 -Refer to Figure 6-19. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

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

Figure 6-8 -Refer to Figure 6-8. When the price ceiling is enforced in this market and the supply curve for gasoline shifts from S₁ to S₂,

Figure 6-11 -Refer to Figure 6-11. Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Figure 6-18 -Refer to Figure 6-18. If the government set a price floor at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

Figure 6-17 -Refer to Figure 6-17. If the government places a $2 tax in the market, the seller bears $2 of the tax burden.