Question 1

Under rent control,tenants can expect

Accepted Answer

A)  lower rent and higher quality housing. 
B)  lower rent and lower quality housing. 
C)  higher rent and a shortage of rental housing. 
D)  higher rent and a surplus of rental housing. 
A)  lower rent and higher quality housing. 
B)  lower rent and lower quality housing. 
C)  higher rent and a shortage of rental housing. 
D)  higher rent and a surplus of rental housing.

Question 2

Figure 6-13
  
-Refer to Figure 6-13.In this market,a minimum wage of $7.25 creates a labor

Accepted Answer

A)  shortage of 2,250 workers. 
B)  shortage of 4,500 workers. 
C)  surplus of 2,250 workers. 
D)  surplus of 4,500 workers. 
A)  shortage of 2,250 workers. 
B)  shortage of 4,500 workers. 
C)  surplus of 2,250 workers. 
D)  surplus of 4,500 workers.

Question 3

Which of the following statements about the effects of rent control is correct?

Accepted Answer

A)  The short-run effect of rent control is a surplus of apartments, and the long-run effect of rent control is a shortage of apartments. 
B)  The short-run effect of rent control is a relatively small shortage of apartments, and the long-run effect of rent control is a larger shortage of apartments. 
C)  In the long run, rent control leads to a shortage of apartments and an improvement in the quality of available apartments. 
D)  The effects of rent control are very noticeable to the public in the short run because the primary effects of rent control occur very quickly. 
A)  The short-run effect of rent control is a surplus of apartments, and the long-run effect of rent control is a shortage of apartments. 
B)  The short-run effect of rent control is a relatively small shortage of apartments, and the long-run effect of rent control is a larger shortage of apartments. 
C)  In the long run, rent control leads to a shortage of apartments and an improvement in the quality of available apartments. 
D)  The effects of rent control are very noticeable to the public in the short run because the primary effects of rent control occur very quickly.

Question 4

The minimum wage has its greatest impact on the market for

Accepted Answer

A)  female labor. 
B)  older labor. 
C)  black labor. 
D)  teenage labor. 
A)  female labor. 
B)  older labor. 
C)  black labor. 
D)  teenage labor.

Question 5

Figure 6-18
  
-Refer to Figure 6-18.The equilibrium price in the market before the tax is imposed is

Accepted Answer

A)  $3.50. 
B)  $5. 
C)  $6. 
D)  $7. 
A)  $3.50. 
B)  $5. 
C)  $6. 
D)  $7.

Question 6

Figure 6-8
  
-Refer to Figure 6-8.When a certain price control is imposed on this market,the resulting quantity of the good that is actually bought and sold is such that buyers are willing and able to pay a maximum of P₁ dollars per unit for that quantity and sellers are willing and able to accept a minimum of P₂ dollars per unit for that quantity.If P₁ - P₂ = $3,then the price control is

Accepted Answer

A)  a price ceiling of $2.00. 
B)  a price ceiling of $5.00. 
C)  a price floor of $5.00. 
D)  either a price ceiling of $2.00 or a price floor of $5.00. 
A)  a price ceiling of $2.00. 
B)  a price ceiling of $5.00. 
C)  a price floor of $5.00. 
D)  either a price ceiling of $2.00 or a price floor of $5.00.

Question 7

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

Accepted Answer

A)  The effective price received by sellers is $0.40 per bottle less than it was before the tax. 
B)  Sixty percent of the burden of the tax falls on sellers. 
C)  This tax causes the demand curve for perfume to shift downward by $1.00 at each quantity of perfume. 
D)  All of the above are correct. 
A)  The effective price received by sellers is $0.40 per bottle less than it was before the tax. 
B)  Sixty percent of the burden of the tax falls on sellers. 
C)  This tax causes the demand curve for perfume to shift downward by $1.00 at each quantity of perfume. 
D)  All of the above are correct.

Question 8

Figure 6-23
  
-Refer to Figure 6-23.The effective price received by sellers after the tax is imposed is

Accepted Answer

A)  $8. 
B)  $10. 
C)  $14. 
D)  $18. 
A)  $8. 
B)  $10. 
C)  $14. 
D)  $18.

Question 9

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Accepted Answer

A) True 
 B)False

Question 10

Table 6-1
  
-Refer to Table 6-1.Suppose the government imposes a price floor of $1 on this market.What will be the size of the surplus in this market?

Accepted Answer

A)  0 units 
B)  2 units 
C)  8 units 
D)  10 units 
A)  0 units 
B)  2 units 
C)  8 units 
D)  10 units

Question 11

Suppose that the demand for picture frames is highly inelastic,and the supply of picture frames is highly elastic.A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

Accepted Answer

A)  less than $0.50. 
B)  $0.50. 
C)  between $0.50 and $1. 
D)  $1. 
A)  less than $0.50. 
B)  $0.50. 
C)  between $0.50 and $1. 
D)  $1.

Question 12

Table 6-3
The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market.
  
-Refer to Table 6-3.Following the imposition of a price floor $2 above the equilibrium price,irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor.The resulting market price is

Accepted Answer

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

Question 13

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

Accepted Answer

A)  1 to 3 percent. 
B)  5 to 7 percent. 
C)  10 percent. 
D)  None of the above is correct because studies show no decrease in teenage employment. 
A)  1 to 3 percent. 
B)  5 to 7 percent. 
C)  10 percent. 
D)  None of the above is correct because studies show no decrease in teenage employment.

Question 14

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

Accepted Answer

A)  waiting lists 
B)  race 
C)  price 
D)  bribes 
A)  waiting lists 
B)  race 
C)  price 
D)  bribes

Question 15

Figure 6-9
  
-Refer to Figure 6-9.At which price would a price ceiling be binding?

Accepted Answer

A)  $4 
B)  $5 
C)  $6 
D)  $7 
A)  $4 
B)  $5 
C)  $6 
D)  $7

Question 16

Figure 6-12
  
-Refer to Figure 6-12.Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

Accepted Answer

A)  Buyers of gasoline paid a price of P1 before 1973; they paid a price of P2 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price. 
B)  Buyers of gasoline paid a price of P1 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price. 
C)  Buyers of gasoline paid a price of P2 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, with no shortage of gasoline at that price. 
D)  The price ceiling was binding before 1973; the price ceiling was no longer binding after OPEC increased the price of crude oil in 1973. 
A)  Buyers of gasoline paid a price of P1 before 1973; they paid a price of P2 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price. 
B)  Buyers of gasoline paid a price of P1 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price. 
C)  Buyers of gasoline paid a price of P2 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, with no shortage of gasoline at that price. 
D)  The price ceiling was binding before 1973; the price ceiling was no longer binding after OPEC increased the price of crude oil in 1973.

Question 17

A price floor is binding when it is set

Accepted Answer

A)  above the equilibrium price, causing a shortage. 
B)  above the equilibrium price, causing a surplus. 
C)  below the equilibrium price, causing a shortage. 
D)  below the equilibrium price, causing a surplus. 
A)  above the equilibrium price, causing a shortage. 
B)  above the equilibrium price, causing a surplus. 
C)  below the equilibrium price, causing a shortage. 
D)  below the equilibrium price, causing a surplus.

Question 18

Suppose the demand for macaroni is inelastic,the supply of macaroni is elastic,the demand for cigarettes is inelastic,and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the burden of

Accepted Answer

A)  both taxes would fall more heavily on the buyers than on the sellers. 
B)  the macaroni tax would fall more heavily on the sellers than on the buyers, and the burden of the cigarette tax would fall more heavily on the buyers than on the sellers. 
C)  the macaroni tax would fall more heavily on the buyers than on the sellers, and the burden of the cigarette tax would fall more heavily on the sellers than on the buyers. 
D)  both taxes would fall more heavily on the sellers than on the buyers. 
A)  both taxes would fall more heavily on the buyers than on the sellers. 
B)  the macaroni tax would fall more heavily on the sellers than on the buyers, and the burden of the cigarette tax would fall more heavily on the buyers than on the sellers. 
C)  the macaroni tax would fall more heavily on the buyers than on the sellers, and the burden of the cigarette tax would fall more heavily on the sellers than on the buyers. 
D)  both taxes would fall more heavily on the sellers than on the buyers.

Question 19

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

Accepted Answer

A) True 
 B)False

Question 20

A binding price floor
(i)causes a surplus.
(ii)causes a shortage.
(iii)is set at a price above the equilibrium price.
(iv)is set at a price below the equilibrium price.

Accepted Answer

A)  (i) only 
B)  (iii) only 
C)  (i) and (iii) only 
D)  (ii) and (iv) only 
A)  (i) only 
B)  (iii) only 
C)  (i) and (iii) only 
D)  (ii) and (iv) only

Under rent control,tenants can expect

Figure 6-13 -Refer to Figure 6-13.In this market,a minimum wage of $7.25 creates a labor

Which of the following statements about the effects of rent control is correct?

The minimum wage has its greatest impact on the market for

Figure 6-18 -Refer to Figure 6-18.The equilibrium price in the market before the tax is imposed is

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

Figure 6-23 -Refer to Figure 6-23.The effective price received by sellers after the tax is imposed is

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Table 6-1 -Refer to Table 6-1.Suppose the government imposes a price floor of $1 on this market.What will be the size of the surplus in this market?

Suppose that the demand for picture frames is highly inelastic,and the supply of picture frames is highly elastic.A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

Figure 6-9 -Refer to Figure 6-9.At which price would a price ceiling be binding?

Figure 6-12 -Refer to Figure 6-12.Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

A price floor is binding when it is set

Suppose the demand for macaroni is inelastic,the supply of macaroni is elastic,the demand for cigarettes is inelastic,and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the burden of

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

A binding price floor (i)causes a surplus. (ii)causes a shortage. (iii)is set at a price above the equilibrium price. (iv)is set at a price below the equilibrium price.

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.

Filters

Exam 6: Supply, Demand, And Government Policies.

Under rent control,tenants can expect

Figure 6-13 -Refer to Figure 6-13.In this market,a minimum wage of $7.25 creates a labor

Which of the following statements about the effects of rent control is correct?

The minimum wage has its greatest impact on the market for

Figure 6-18 -Refer to Figure 6-18.The equilibrium price in the market before the tax is imposed is

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

Figure 6-23 -Refer to Figure 6-23.The effective price received by sellers after the tax is imposed is

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Table 6-1 -Refer to Table 6-1.Suppose the government imposes a price floor of $1 on this market.What will be the size of the surplus in this market?

Suppose that the demand for picture frames is highly inelastic,and the supply of picture frames is highly elastic.A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

Figure 6-9 -Refer to Figure 6-9.At which price would a price ceiling be binding?

Figure 6-12 -Refer to Figure 6-12.Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

A price floor is binding when it is set

Suppose the demand for macaroni is inelastic,the supply of macaroni is elastic,the demand for cigarettes is inelastic,and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the burden of

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

A binding price floor (i)causes a surplus. (ii)causes a shortage. (iii)is set at a price above the equilibrium price. (iv)is set at a price below the equilibrium price.

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.

Filters