Question 1

In the housing market, if a rent ceiling of $600.00 is imposed when the equilibrium rent is $500.00, why will nothing change?

Accepted Answer

A rent ceiling is the maximum legal rent

Question 2

-In the above figure, a price ceiling of $2 would

Accepted Answer

A)  create a shortage. 
B)  create a surplus. 
C)  have no effect. 
D)  cause the demand curve to shift leftward. 
A)  create a shortage. 
B)  create a surplus. 
C)  have no effect. 
D)  cause the demand curve to shift leftward.

Question 3

A good has a perfectly inelastic supply and a downward sloping demand curve. Imposing a sales tax of $1 per unit on the sellers of the good

Accepted Answer

A)  raises the price paid by demanders by more than $1.00. 
B)  raises the price paid by demanders by $1.00. 
C)  raises the price paid by demanders by less than $1.00. 
D)  does not change the price paid by demanders. 
A)  raises the price paid by demanders by more than $1.00. 
B)  raises the price paid by demanders by $1.00. 
C)  raises the price paid by demanders by less than $1.00. 
D)  does not change the price paid by demanders.

Question 4

"The tax on insulin in the Philippines is anywhere between 10 and 20 percent. If you are rich and living in the Philippines, this is not a problem, but if you are poor, then insulin becomes something that you cannot afford." If the government places the tax on sellers, what is the most likely tax incidence?

Accepted Answer

A)  The vast majority of the tax is paid by buyers. 
B)  The vast majority of the tax is paid by sellers. 
C)  The tax is split equally between buyers and sellers. 
D)  Sellers pay all the tax. 
A)  The vast majority of the tax is paid by buyers. 
B)  The vast majority of the tax is paid by sellers. 
C)  The tax is split equally between buyers and sellers. 
D)  Sellers pay all the tax.

Question 5

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The tax decreases consumption by

Accepted Answer

A)  1,000 blouses. 
B)  2,000 blouses. 
C)  3,000 blouses. 
D)  4,000 blouses. 
A)  1,000 blouses. 
B)  2,000 blouses. 
C)  3,000 blouses. 
D)  4,000 blouses.

Question 6

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The amount of the tax paid by the buyers would be greater than shown in the figure

Accepted Answer

A)  only if the demand was more elastic. 
B)  only if the demand was more inelastic. 
C)  only if the supply was more elastic. 
D)  if either the demand was more inelastic or the supply more elastic. 
A)  only if the demand was more elastic. 
B)  only if the demand was more inelastic. 
C)  only if the supply was more elastic. 
D)  if either the demand was more inelastic or the supply more elastic.

Question 7

If penalties are imposed on both the buyers and the sellers of illegal goods or services, then an effect in the market for the illegal good or service would definitely be

Accepted Answer

A)  an increase in the equilibrium price. 
B)  a decrease in the equilibrium price. 
C)  a decrease in the equilibrium quantity. 
D)  an increase in the equilibrium quantity. 
A)  an increase in the equilibrium price. 
B)  a decrease in the equilibrium price. 
C)  a decrease in the equilibrium quantity. 
D)  an increase in the equilibrium quantity.

Question 8

Most economists believe that raising the minimum wage decreases the employment opportunities for low-skilled workers.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following leads to the demanders paying all of a tax?

Accepted Answer

A)  The supply is unit elastic. 
B)  The supply is perfectly inelastic. 
C)  The demand is perfectly elastic. 
D)  The demand is perfectly inelastic. 
A)  The supply is unit elastic. 
B)  The supply is perfectly inelastic. 
C)  The demand is perfectly elastic. 
D)  The demand is perfectly inelastic.

Question 10

Rather than prohibiting a good or service, the government might tax it. Imposing such a tax on a good or service ________ the equilibrium price and ________ the equilibrium quantity.

Accepted Answer

A)  raises; increases 
B)  raises; decreases 
C)  lowers; increases 
D)  lowers; decreases 
A)  raises; increases 
B)  raises; decreases 
C)  lowers; increases 
D)  lowers; decreases

Question 11

A rent ceiling set below the equilibrium rent will

Accepted Answer

A)  increase search activity. 
B)  decrease search activity. 
C)  have no effect on search activity. 
D)  shift the housing supply curve rightward. 
A)  increase search activity. 
B)  decrease search activity. 
C)  have no effect on search activity. 
D)  shift the housing supply curve rightward.

Question 12

In general, a fine on buying a product leads to the

Accepted Answer

A)  supply curve shifting rightward. 
B)  supply curve shifting leftward. 
C)  demand curve shifting rightward. 
D)  demand curve shifting leftward. 
A)  supply curve shifting rightward. 
B)  supply curve shifting leftward. 
C)  demand curve shifting rightward. 
D)  demand curve shifting leftward.

Question 13

-Of the $3 per pizza tax illustrated in the above figure, the

Accepted Answer

A)  consumers pay $2 of the $3 per pizza tax. 
B)  sellers pay $1 of the $3 per pizza tax. 
C)  government collects $120 thousand in revenue from the pizza tax. 
D)  All of the above answers are correct. 
A)  consumers pay $2 of the $3 per pizza tax. 
B)  sellers pay $1 of the $3 per pizza tax. 
C)  government collects $120 thousand in revenue from the pizza tax. 
D)  All of the above answers are correct.

Question 14

After a $3 per-unit tax on watching movies in theaters is imposed, attendance falls from 4,000 a week to 3,000 a week. The revenue from the tax is

Accepted Answer

A)  less than $9,000 a week. 
B)  $9,000 a week. 
C)  between $9,000 a week and $12,000 a week. 
D)  some amount that cannot be calculated without more information. 
A)  less than $9,000 a week. 
B)  $9,000 a week. 
C)  between $9,000 a week and $12,000 a week. 
D)  some amount that cannot be calculated without more information.

Question 15

A minimum wage set above the equilibrium wage rate has no effect.

Accepted Answer

A) True 
 B)False

Question 16

A sales tax imposed on sellers shifts the supply curve leftward for the taxed good because the

Accepted Answer

A)  tax is paid by the seller to the government and is, therefore, like a cost of production. 
B)  tax is actually shifted entirely onto the buyer who can afford only a smaller supply. 
C)  higher price causes entry into the market. 
D)  tax shifts the demand curve leftward. 
A)  tax is paid by the seller to the government and is, therefore, like a cost of production. 
B)  tax is actually shifted entirely onto the buyer who can afford only a smaller supply. 
C)  higher price causes entry into the market. 
D)  tax shifts the demand curve leftward.

Question 17

-The above figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling of $1,000 per month, the ceiling will

Accepted Answer

A)  help all renters. 
B)  help some renters and hurt other renters. 
C)  help all landlords. 
D)  have no effect at all on the Bigtown rental market. 
A)  help all renters. 
B)  help some renters and hurt other renters. 
C)  help all landlords. 
D)  have no effect at all on the Bigtown rental market.

Question 18

A sales tax is divided so that buyers pay the full amount if

Accepted Answer

A)  demand has unitary elasticity. 
B)  supply has unitary elasticity. 
C)  demand is perfectly inelastic. 
D)  supply is perfectly inelastic. 
A)  demand has unitary elasticity. 
B)  supply has unitary elasticity. 
C)  demand is perfectly inelastic. 
D)  supply is perfectly inelastic.

Question 19

-In the above figure, CBL is the cost of breaking the law. If it is illegal to buy, but not illegal to sell, then the price per unit will be

Accepted Answer

A)  $500. 
B)  $400. 
C)  $300. 
D)  $200. 
A)  $500. 
B)  $400. 
C)  $300. 
D)  $200.

Question 20

-In the figure above, if a tax of $2 per widget is imposed on sellers, then the after-tax amount per widget received by the seller will be

Accepted Answer

A)  more than or equal to $8. 
B)  between $8 and $6. 
C)  $6. 
D)  less than $6. 
A)  more than or equal to $8. 
B)  between $8 and $6. 
C)  $6. 
D)  less than $6.

In the housing market, if a rent ceiling of $600.00 is imposed when the equilibrium rent is $500.00, why will nothing change?

-In the above figure, a price ceiling of $2 would

A good has a perfectly inelastic supply and a downward sloping demand curve. Imposing a sales tax of $1 per unit on the sellers of the good

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The tax decreases consumption by

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The amount of the tax paid by the buyers would be greater than shown in the figure

If penalties are imposed on both the buyers and the sellers of illegal goods or services, then an effect in the market for the illegal good or service would definitely be

Most economists believe that raising the minimum wage decreases the employment opportunities for low-skilled workers.

Which of the following leads to the demanders paying all of a tax?

Rather than prohibiting a good or service, the government might tax it. Imposing such a tax on a good or service the equilibrium price and the equilibrium quantity.

A rent ceiling set below the equilibrium rent will

In general, a fine on buying a product leads to the

-Of the $3 per pizza tax illustrated in the above figure, the

After a $3 per-unit tax on watching movies in theaters is imposed, attendance falls from 4,000 a week to 3,000 a week. The revenue from the tax is

A minimum wage set above the equilibrium wage rate has no effect.

A sales tax imposed on sellers shifts the supply curve leftward for the taxed good because the

-The above figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling of $1,000 per month, the ceiling will

A sales tax is divided so that buyers pay the full amount if

-In the above figure, CBL is the cost of breaking the law. If it is illegal to buy, but not illegal to sell, then the price per unit will be

-In the figure above, if a tax of $2 per widget is imposed on sellers, then the after-tax amount per widget received by the seller will be

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 6: Government Actions in Markets

In the housing market, if a rent ceiling of $600.00 is imposed when the equilibrium rent is $500.00, why will nothing change?

-In the above figure, a price ceiling of $2 would

A good has a perfectly inelastic supply and a downward sloping demand curve. Imposing a sales tax of $1 per unit on the sellers of the good

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The tax decreases consumption by

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The amount of the tax paid by the buyers would be greater than shown in the figure

If penalties are imposed on both the buyers and the sellers of illegal goods or services, then an effect in the market for the illegal good or service would definitely be

Most economists believe that raising the minimum wage decreases the employment opportunities for low-skilled workers.

Which of the following leads to the demanders paying all of a tax?

Rather than prohibiting a good or service, the government might tax it. Imposing such a tax on a good or service ________ the equilibrium price and ________ the equilibrium quantity.

A rent ceiling set below the equilibrium rent will

In general, a fine on buying a product leads to the

-Of the $3 per pizza tax illustrated in the above figure, the

After a $3 per-unit tax on watching movies in theaters is imposed, attendance falls from 4,000 a week to 3,000 a week. The revenue from the tax is

A minimum wage set above the equilibrium wage rate has no effect.

A sales tax imposed on sellers shifts the supply curve leftward for the taxed good because the

-The above figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling of $1,000 per month, the ceiling will

A sales tax is divided so that buyers pay the full amount if

-In the above figure, CBL is the cost of breaking the law. If it is illegal to buy, but not illegal to sell, then the price per unit will be

-In the figure above, if a tax of $2 per widget is imposed on sellers, then the after-tax amount per widget received by the seller will be

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Rather than prohibiting a good or service, the government might tax it. Imposing such a tax on a good or service the equilibrium price and the equilibrium quantity.