Question 1

Table 6-1
  
-Refer to Table 6-1.Which of the following price ceilings would be binding in this market?

Accepted Answer

A)  $2 
B)  $3 
C)  $4 
D)  $5 
A)  $2 
B)  $3 
C)  $4 
D)  $5

Question 2

The minimum wage is more often binding for teenagers than for other members of the labor force.

Accepted Answer

A) True 
 B)False

Question 3

The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run.

Accepted Answer

A) True 
 B)False

Question 4

Figure 6-21
  
-Refer to Figure 6-22.The price that buyers pay after the tax is imposed is

Accepted Answer

A)  $5. 
B)  $6. 
C)  $7. 
D)  $8. 
A)  $5. 
B)  $6. 
C)  $7. 
D)  $8.

Question 5

The primary effect of rent control in the short run is to reduce rents.

Accepted Answer

A) True 
 B)False

Question 6

The tax incidence depends on whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 7

Unlike minimum wage laws,wage subsidies

Accepted Answer

A)  discourage firms from hiring the working poor. 
B)  cause unemployment. 
C)  help only wealthy workers. 
D)  raise the living standards of the working poor without creating unemployment. 
A)  discourage firms from hiring the working poor. 
B)  cause unemployment. 
C)  help only wealthy workers. 
D)  raise the living standards of the working poor without creating unemployment.

Question 8

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

Accepted Answer

A)  nonbinding price floor on gasoline to become binding. 
B)  binding price floor on gasoline to become nonbinding. 
C)  nonbinding price ceiling on gasoline to become binding. 
D)  binding price ceiling on gasoline to become nonbinding. 
A)  nonbinding price floor on gasoline to become binding. 
B)  binding price floor on gasoline to become nonbinding. 
C)  nonbinding price ceiling on gasoline to become binding. 
D)  binding price ceiling on gasoline to become nonbinding.

Question 9

An outcome that can result from either a price ceiling or a price floor is

Accepted Answer

A)  an enhancement of efficiency. 
B)  undesirable rationing mechanisms. 
C)  a surplus. 
D)  a shortage. 
A)  an enhancement of efficiency. 
B)  undesirable rationing mechanisms. 
C)  a surplus. 
D)  a shortage.

Question 10

If the government removes a tax on a good,then the quantity of the good sold will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  not change. 
D)  All of the above are possible. 
A)  increase. 
B)  decrease. 
C)  not change. 
D)  All of the above are possible.

Question 11

Figure 6-16
  
-Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.Which of the following is correct?

Accepted Answer

A)  Buyers and sellers will share the burden of the tax equally. 
B)  Buyers will bear more of the burden of the tax than sellers will. 
C)  Sellers will bear more of the burden of the tax than buyers will. 
D)  Any of the above is possible. 
A)  Buyers and sellers will share the burden of the tax equally. 
B)  Buyers will bear more of the burden of the tax than sellers will. 
C)  Sellers will bear more of the burden of the tax than buyers will. 
D)  Any of the above is possible.

Question 12

The goal of rent control is to help the poor by making housing more affordable.

Accepted Answer

A) True 
 B)False

Question 13

Economic policies often have effects that their architects did not intend or anticipate.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-17
  
-Refer to Figure 6-17.In the after-tax equilibrium,how much revenue does the government collect from the tax on this good?

Accepted Answer

A)  $210 
B)  $345 
C)  $420 
D)  $480 
A)  $210 
B)  $345 
C)  $420 
D)  $480

Question 15

If a price ceiling is not binding,then

Accepted Answer

A)  the equilibrium price is above the price ceiling. 
B)  the equilibrium price is below the price ceiling. 
C)  it has no legal enforcement mechanism. 
D)  None of the above is correct because all price ceilings must be binding. 
A)  the equilibrium price is above the price ceiling. 
B)  the equilibrium price is below the price ceiling. 
C)  it has no legal enforcement mechanism. 
D)  None of the above is correct because all price ceilings must be binding.

Question 16

Which of the following is not correct?

Accepted Answer

A)  Economists have two roles: scientist and policy adviser. 
B)  As scientists, economists develop and test theories to explain the world around them. 
C)  Economic policies rarely have effects that their architects did not intend or anticipate. 
D)  As policy advisers, economists use their theories to help change the world for the better. 
A)  Economists have two roles: scientist and policy adviser. 
B)  As scientists, economists develop and test theories to explain the world around them. 
C)  Economic policies rarely have effects that their architects did not intend or anticipate. 
D)  As policy advisers, economists use their theories to help change the world for the better.

Question 17

When a tax is placed on the buyers of cell phones,the size of the cell phone market

Accepted Answer

A)  and the effective price received by sellers both decrease. 
B)  decreases, but the effective price received by sellers increases. 
C)  increases, but the effective price received by sellers decreases. 
D)  and the effective price received by sellers both increase. 
A)  and the effective price received by sellers both decrease. 
B)  decreases, but the effective price received by sellers increases. 
C)  increases, but the effective price received by sellers decreases. 
D)  and the effective price received by sellers both increase.

Question 18

Suppose the government imposes a 25-cent tax on the buyers of incandescent light bulbs.Which of the following is not correct? The tax would

Accepted Answer

A)  shift the demand curve downward by 25 cents. 
B)  lower the equilibrium price by 25 cents. 
C)  reduce the equilibrium quantity. 
D)  discourage market activity. 
A)  shift the demand curve downward by 25 cents. 
B)  lower the equilibrium price by 25 cents. 
C)  reduce the equilibrium quantity. 
D)  discourage market activity.

Question 19

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

Accepted Answer

A) True 
 B)False

Question 20

An example of a price floor is

Accepted Answer

A)  the regulation of gasoline prices in the U.S. in the 1970s. 
B)  rent control. 
C)  the minimum wage. 
D)  any restriction on price that leads to a shortage. 
A)  the regulation of gasoline prices in the U.S. in the 1970s. 
B)  rent control. 
C)  the minimum wage. 
D)  any restriction on price that leads to a shortage.

Exam 6: Supply, Demand, And Government Policies.

Table 6-1 -Refer to Table 6-1.Which of the following price ceilings would be binding in this market?

The minimum wage is more often binding for teenagers than for other members of the labor force.

The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run.

Figure 6-21 -Refer to Figure 6-22.The price that buyers pay after the tax is imposed is

The primary effect of rent control in the short run is to reduce rents.

The tax incidence depends on whether the tax is levied on buyers or sellers.

Unlike minimum wage laws,wage subsidies

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

An outcome that can result from either a price ceiling or a price floor is

If the government removes a tax on a good,then the quantity of the good sold will

Figure 6-16 -Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.Which of the following is correct?

The goal of rent control is to help the poor by making housing more affordable.

Economic policies often have effects that their architects did not intend or anticipate.

Figure 6-17 -Refer to Figure 6-17.In the after-tax equilibrium,how much revenue does the government collect from the tax on this good?

If a price ceiling is not binding,then

Which of the following is not correct?

When a tax is placed on the buyers of cell phones,the size of the cell phone market

Suppose the government imposes a 25-cent tax on the buyers of incandescent light bulbs.Which of the following is not correct? The tax would

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

An example of a price floor 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.

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.

Oligopoly.

The Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

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