Question 1

What are common arguments offered for and against the minimum wage?

Accepted Answer

Advocates of the minimum wage often reco

Question 2

Russia has put on export tax on timber harvested from its Siberian forests into China.Given that Russian exporters are legally liable for the tax but Chinese buyers are not, is it true the incidence of tax falls entirely on the Russian exporters?

Accepted Answer

The incidence of taxation is the same ir

Question 3

If the minimum wage is below the equilibrium wage:

Accepted Answer

A) the quantity demanded of labour will be greater than the quantity supplied 
B) the quantity demanded of labour will equal the quantity supplied 
C) the quantity demanded of labour will be less than the quantity supplied 
D) anyone who wants a job at the minimum wage can find one 
A) the quantity demanded of labour will be greater than the quantity supplied 
B) the quantity demanded of labour will equal the quantity supplied 
C) the quantity demanded of labour will be less than the quantity supplied 
D) anyone who wants a job at the minimum wage can find one

Question 4

Which of the following is an example of a price-ceiling?

Accepted Answer

A) a minimum wage 
B) a sales tax 
C) none of the above 
D) a rent control 
A) a minimum wage 
B) a sales tax 
C) none of the above 
D) a rent control

Question 5

Graph 6-1  
-In which panel(s) in Graph 6-1 would there be a shortage for a good at the market price?

Accepted Answer

A) panel a 
B) panel b 
C) panel a and panel b 
D) neither panel a nor panel b 
A) panel a 
B) panel b 
C) panel a and panel b 
D) neither panel a nor panel b

Question 6

If a price ceiling results in a shortage of the good, which of the following will NOT ration the demand:

Accepted Answer

A) queuing mechanisms that get people to wait in long lines 
B) discrimination by the seller 
C) an increase in the price of the good 
D) none of the above 
A) queuing mechanisms that get people to wait in long lines 
B) discrimination by the seller 
C) an increase in the price of the good 
D) none of the above

Question 7

Which of the following is a correct statement about the labour market?

Accepted Answer

A) workers determine the supply of labour and firms determine the demand for labour 
B) workers determine the demand for labour and firms determine the supply of labour 
C) workers determine the supply of labour and government determines the demand for labour 
D) government determines the supply of labour and firms determine the supply of labour 
A) workers determine the supply of labour and firms determine the demand for labour 
B) workers determine the demand for labour and firms determine the supply of labour 
C) workers determine the supply of labour and government determines the demand for labour 
D) government determines the supply of labour and firms determine the supply of labour

Question 8

The benefits of the First Home Owners Grant scheme fall primarily to the sellers of housing.

Accepted Answer

A) True 
 B)False

Question 9

Taxes are employed by policy makers for two reasons.The first is to raise revenue.The second is to adjust market outcomes.

Accepted Answer

A) True 
 B)False

Question 10

Graph 6-9  
-Refer to Graph 6-9.In which market will the majority of a tax be paid by the buyer?

Accepted Answer

A) market a 
B) market b 
C) market c 
D) all of the above 
A) market a 
B) market b 
C) market c 
D) all of the above

Question 11

Rent controls create shortages in housing markets, however, the magnitude of these shortages differs between the long run and short run.What explains these differences?

Accepted Answer

In the short run, both demand and supply

Question 12

Market prices are an efficient and impersonal way to ration goods.

Accepted Answer

A) True 
 B)False

Question 13

If sellers are required to pay a $0.70 tax on each cup of coffee, the supply of coffee will shift:

Accepted Answer

A) right by $0.70 per cup 
B) left by $0.70 per cup 
C) up by $0.70 per cup 
D) down by $0.70 per cup 
A) right by $0.70 per cup 
B) left by $0.70 per cup 
C) up by $0.70 per cup 
D) down by $0.70 per cup

Question 14

Water shortages caused by droughts can be lessened by:

Accepted Answer

A) allowing price to equate the demand for water with the supply of water 
B) restricting water usage of consumers 
C) arresting anyone who wastes water 
D) imposing tight price controls on water 
A) allowing price to equate the demand for water with the supply of water 
B) restricting water usage of consumers 
C) arresting anyone who wastes water 
D) imposing tight price controls on water

Question 15

Which of the following is NOT a function of prices in a market system?

Accepted Answer

A) prices have the crucial job of balancing supply and demand 
B) prices send signals to buyers and sellers to help them make rational economic decisions 
C) prices coordinate economic activity 
D) prices make an equitable distribution of goods and services among consumers possible 
A) prices have the crucial job of balancing supply and demand 
B) prices send signals to buyers and sellers to help them make rational economic decisions 
C) prices coordinate economic activity 
D) prices make an equitable distribution of goods and services among consumers possible

Question 16

Graph 6-7  
-According to Graph 6-7, the price sellers receive after the tax is imposed is:

Accepted Answer

A) $8.00 
B) $6.00 
C) $5.00 
D) $3.50 
A) $8.00 
B) $6.00 
C) $5.00 
D) $3.50

Question 17

Lawmakers can decide whether the buyer or the seller must send a tax to the government but they cannot legislate the true burden of a tax.

Accepted Answer

A) True 
 B)False

Question 18

Graph 6-5  
-According to Graph 6-5, a binding price floor would exist at a price of:

Accepted Answer

A) $6.00 
B) $5.00 
C) $2.00 
D) none of the above 
A) $6.00 
B) $5.00 
C) $2.00 
D) none of the above

Question 19

The justification for the minimum wage is to:

Accepted Answer

A) increase the jobs available for workers 
B) reduce the jobs available for unskilled workers 
C) ensure all workers get an adequate standard of living 
D) provide benefits to middle-class part-time workers 
A) increase the jobs available for workers 
B) reduce the jobs available for unskilled workers 
C) ensure all workers get an adequate standard of living 
D) provide benefits to middle-class part-time workers

Question 20

Graph 6-3  
-According to Graph 6-3, which panel(s) best represent(s) a binding rent control in the short run?

Accepted Answer

A) panel a 
B) panel b 
C) neither panel 
D) both panels 
A) panel a 
B) panel b 
C) neither panel 
D) both panels

Exam 6: Supply, Demand and Government Policies

What are common arguments offered for and against the minimum wage?

Russia has put on export tax on timber harvested from its Siberian forests into China.Given that Russian exporters are legally liable for the tax but Chinese buyers are not, is it true the incidence of tax falls entirely on the Russian exporters?

If the minimum wage is below the equilibrium wage:

Which of the following is an example of a price-ceiling?

Graph 6-1 -In which panel(s) in Graph 6-1 would there be a shortage for a good at the market price?

If a price ceiling results in a shortage of the good, which of the following will NOT ration the demand:

Which of the following is a correct statement about the labour market?

The benefits of the First Home Owners Grant scheme fall primarily to the sellers of housing.

Taxes are employed by policy makers for two reasons.The first is to raise revenue.The second is to adjust market outcomes.

Graph 6-9 -Refer to Graph 6-9.In which market will the majority of a tax be paid by the buyer?

Rent controls create shortages in housing markets, however, the magnitude of these shortages differs between the long run and short run.What explains these differences?

Market prices are an efficient and impersonal way to ration goods.

If sellers are required to pay a $0.70 tax on each cup of coffee, the supply of coffee will shift:

Water shortages caused by droughts can be lessened by:

Which of the following is NOT a function of prices in a market system?

Graph 6-7 -According to Graph 6-7, the price sellers receive after the tax is imposed is:

Lawmakers can decide whether the buyer or the seller must send a tax to the government but they cannot legislate the true burden of a tax.

Graph 6-5 -According to Graph 6-5, a binding price floor would exist at a price of:

The justification for the minimum wage is to:

Graph 6-3 -According to Graph 6-3, which panel(s) best represent(s) a binding rent control in the short run?

Ten Lessons From 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

Application: 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

Business Strategy and Oligopoly

Competition Policy

The Markets for the Factors of Production

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

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 Trade-Off Between Inflation and Unemployment

Global Financial Crisis of 2008 and Beyond

Five Debates Over Macroeconomic Policy

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