Question 1

The effects of rent control in the long run include lower rents and lower-quality housing.

Accepted Answer

A) True 
 B)False

Question 2

A price floor set above the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

Accepted Answer

A) demand, raising both the equilibrium price and quantity in the market for artificially sweetened beverages. 
B) demand, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially sweetened beverages. 
C) supply, raising the equilibrium price and lowering the equilibrium quantity in the market for artificially sweetened beverages. 
D) supply, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially sweetened beverages. 
A) demand, raising both the equilibrium price and quantity in the market for artificially sweetened beverages. 
B) demand, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially sweetened beverages. 
C) supply, raising the equilibrium price and lowering the equilibrium quantity in the market for artificially sweetened beverages. 
D) supply, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially sweetened beverages.

Question 6

The tax burden falls more heavily on the side of the market that is more inelastic.

Accepted Answer

A) True 
 B)False

Question 7

When a tax is imposed on a good, the result is always a shortage of the good.

Accepted Answer

A) True 
 B)False

Question 8

If a nonbinding price floor 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

Since half of the FICA tax is paid by firms and the other half is paid by workers, the burden of the tax must fall equally on firms and workers.

Accepted Answer

A) True 
 B)False

Question 10

Price floors are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 11

A tax on sellers and an increase in input prices affect the supply curve in the same way.

Accepted Answer

A) True 
 B)False

Question 12

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 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
-The following table shows the demand and supply schedules in a particular market.
If the government sets a price floor $2 above the equilibrium price, how many units will be sold in this market?
 $$\begin{array} { | l | l | l | } 
\hline \text { Price } & \begin{array} { l } 
\text { Quantity } \
\text { Demanded }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { Supplied }
\end{array} \
\hline \$ 1 & 8 & 3 \
\hline \$ 3 & 6 & 6 \
\hline \$ 5 & 4 & 9 \
\hline \$ 7 & 2 & 12 \
\hline \$ 9 & 0 & 15 \
\hline
\end{array}$$

Accepted Answer

The equilibrium price is $3, so the pric

Question 14

​Price ceilings are never binding when set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 15

A tax on the buyers of smart watches encourages

Accepted Answer

A) sellers to supply a smaller quantity at every price. 
B) buyers to demand a smaller quantity at every price. 
C) sellers to supply a larger quantity at every price. 
D) buyers to demand a larger quantity at every price. 
A) sellers to supply a smaller quantity at every price. 
B) buyers to demand a smaller quantity at every price. 
C) sellers to supply a larger quantity at every price. 
D) buyers to demand a larger quantity at every price.

Question 16

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

Accepted Answer

A) increases 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) increases a tax on the good sold in that market. 
A) increases 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) increases a tax on the good sold in that market.

Question 17

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

Accepted Answer

A) causes a shortage of 60 units of the good. 
B) makes it necessary for sellers to ration the good using a mechanism other than price. 
C) is not binding because it is set below the equilibrium price. 
D) causes a shortage of 30 units of the good. 
A) causes a shortage of 60 units of the good. 
B) makes it necessary for sellers to ration the good using a mechanism other than price. 
C) is not binding because it is set below the equilibrium price. 
D) causes a shortage of 30 units of the good.

Question 18

Figure 6-20
   ​
-Refer to Figure 6-20. 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 19

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

Accepted Answer

A) True 
 B)False

Question 20

Since a tax imposed on buyers of a product only affects demand, such a tax has no impact on sellers in that market.
​

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

The effects of rent control in the long run include lower rents and lower-quality housing.

A price floor set above the equilibrium price causes a surplus in the market.

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

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

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

The tax burden falls more heavily on the side of the market that is more inelastic.

When a tax is imposed on a good, the result is always a shortage of the good.

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

Since half of the FICA tax is paid by firms and the other half is paid by workers, the burden of the tax must fall equally on firms and workers.

Price floors are typically imposed to benefit sellers.

A tax on sellers and an increase in input prices affect the supply curve in the same way.

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

​Price ceilings are never binding when set above the equilibrium price.

A tax on the buyers of smart watches encourages

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

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

Figure 6-20 ​ -Refer to Figure 6-20. 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?

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

Since a tax imposed on buyers of a product only affects demand, such a tax has no impact on sellers in that market. ​

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

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

Price ceilings are never binding when set above the equilibrium price.

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

Figure 6-20 -Refer to Figure 6-20. 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?

Since a tax imposed on buyers of a product only affects demand, such a tax has no impact on sellers in that market.