Question 1

If a tax is levied on the sellers of a product, then the demand curve will

Accepted Answer

A) shift down. 
B) shift up. 
C) become flatter. 
D) not shift. 
A) shift down. 
B) shift up. 
C) become flatter. 
D) not shift.

Question 2

The distribution of the burden of a tax depends strictly on the elasticity of demand.
​

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

When free markets ration goods with prices, it is both efficient and impersonal.

Accepted Answer

A) True 
 B)False

Question 5

The minimum wage was instituted to ensure workers

Accepted Answer

A) a middle-class standard of living. 
B) employment. 
C) a minimally adequate standard of living. 
D) unemployment compensation. 
A) a middle-class standard of living. 
B) employment. 
C) a minimally adequate standard of living. 
D) unemployment compensation.

Question 6

Figure 6-16
​
   ​
-Refer to Figure 6-16. A price ceiling set at $30 would create a shortage of 20 units.

Accepted Answer

A) True 
 B)False

Question 7

In the housing market, supply and demand are

Accepted Answer

A) more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
B) more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
C) more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
D) more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
A) more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
B) more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
C) more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
D) more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.

Question 8

Which of the following is not correct?

Accepted Answer

A) The economy contains many labor markets for different types of workers. 
B) The impact of a minimum wage depends on the skill and experience of the worker. 
C) A minimum wage would be binding for workers with high skills and much experience. 
D) A minimum wage would not be binding if the equilibrium wage was above the minimum wage. 
A) The economy contains many labor markets for different types of workers. 
B) The impact of a minimum wage depends on the skill and experience of the worker. 
C) A minimum wage would be binding for workers with high skills and much experience. 
D) A minimum wage would not be binding if the equilibrium wage was above the minimum wage.

Question 9

A tax on buyers shifts the demand curve to the right.

Accepted Answer

A) True 
 B)False

Question 10

Figure 6-18
   ​
-Refer to Figure 6-18. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

There woul

Question 11

To be binding, a price floor must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 12

When OPEC raised the price of crude oil in the 1970s, it caused the

Accepted Answer

A) demand for gasoline to increase. 
B) demand for gasoline to decrease. 
C) supply of gasoline to increase. 
D) supply of gasoline to decrease. 
A) demand for gasoline to increase. 
B) demand for gasoline to decrease. 
C) supply of gasoline to increase. 
D) supply of gasoline to decrease.

Question 13

Scenario 6-2
Suppose demand for a product is given by the equation
QS1U1P1D S1S1P0= 120 - 4P
and supply for the product is given by the equation
QS1U1P1S S1S1P0= 4P
-Refer to Scenario 6-2. Suppose the government sets a price ceiling at $12 for this product. Is this price ceiling binding, and what will be the size of the shortage/surplus in this market?

Accepted Answer

The price ceiling wi

Question 14

A surplus results when a

Accepted Answer

A) nonbinding price floor is imposed on a market. 
B) nonbinding price floor is removed from a market. 
C) binding price floor is imposed on a market. 
D) binding price floor is removed from a market. 
A) nonbinding price floor is imposed on a market. 
B) nonbinding price floor is removed from a market. 
C) binding price floor is imposed on a market. 
D) binding price floor is removed from a market.

Question 15

Consider the U.S. market for chocolate, a market in which the government has imposed a nonbinding price ceiling. Which of the following events could convert the price ceiling from a nonbinding to a binding price ceiling?

Accepted Answer

A) A government study that shows that consuming chocolate increases the incidence of cancer. 
B) A large increase in the size of the cocoa bean crop; cocoa beans are used to produce chocolate. 
C) South American cocoa bean producers refuse to ship to chocolate producers in the United States. 
D) A sharp drop in consumer income; chocolate is a normal good. 
A) A government study that shows that consuming chocolate increases the incidence of cancer. 
B) A large increase in the size of the cocoa bean crop; cocoa beans are used to produce chocolate. 
C) South American cocoa bean producers refuse to ship to chocolate producers in the United States. 
D) A sharp drop in consumer income; chocolate is a normal good.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Buyers and sellers always share the burden of a tax equally.

Accepted Answer

A) True 
 B)False

Question 19

When a binding price ceiling is imposed on a market for a good, some people who want to buy the good cannot do so.

Accepted Answer

A) True 
 B)False

Question 20

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply.
​

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

If a tax is levied on the sellers of a product, then the demand curve will

The distribution of the burden of a tax depends strictly on the elasticity of demand. ​

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

When free markets ration goods with prices, it is both efficient and impersonal.

The minimum wage was instituted to ensure workers

Figure 6-16 ​ ​ -Refer to Figure 6-16. A price ceiling set at $30 would create a shortage of 20 units.

In the housing market, supply and demand are

Which of the following is not correct?

A tax on buyers shifts the demand curve to the right.

Figure 6-18 ​ -Refer to Figure 6-18. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

To be binding, a price floor must be set above the equilibrium price.

When OPEC raised the price of crude oil in the 1970s, it caused the

A surplus results when a

Consider the U.S. market for chocolate, a market in which the government has imposed a nonbinding price ceiling. Which of the following events could convert the price ceiling from a nonbinding to a binding price ceiling?

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

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

Buyers and sellers always share the burden of a tax equally.

When a binding price ceiling is imposed on a market for a good, some people who want to buy the good cannot do so.

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply. ​

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

The distribution of the burden of a tax depends strictly on the elasticity of demand.

Figure 6-16 -Refer to Figure 6-16. A price ceiling set at $30 would create a shortage of 20 units.

Figure 6-18 -Refer to Figure 6-18. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply.