Question 1

A binding minimum wage

Accepted Answer

A)  alters both the quantity demanded and quantity supplied of labor. 
B)  affects only the quantity of labor demanded; it does not affect the quantity of labor supplied. 
C)  has no effect on the quantity of labor demanded or the quantity of labor supplied. 
D)  causes only temporary unemployment because the market will adjust and eliminate any temporary surplus of workers. 
A)  alters both the quantity demanded and quantity supplied of labor. 
B)  affects only the quantity of labor demanded; it does not affect the quantity of labor supplied. 
C)  has no effect on the quantity of labor demanded or the quantity of labor supplied. 
D)  causes only temporary unemployment because the market will adjust and eliminate any temporary surplus of workers.

Question 2

Most labor economists believe that the supply of labor is

Accepted Answer

A)  less elastic than the demand, and, therefore, firms bear most of the burden of the payroll tax. 
B)  less elastic than the demand, and, therefore, workers bear most of the burden of the payroll tax. 
C)  more elastic than the demand, and, therefore, workers bear most of the burden of the payroll tax. 
D)  more elastic than the demand, and, therefore, firms bear most of the burden of the payroll tax. 
A)  less elastic than the demand, and, therefore, firms bear most of the burden of the payroll tax. 
B)  less elastic than the demand, and, therefore, workers bear most of the burden of the payroll tax. 
C)  more elastic than the demand, and, therefore, workers bear most of the burden of the payroll tax. 
D)  more elastic than the demand, and, therefore, firms bear most of the burden of the payroll tax.

Question 3

A price ceiling caused the gasoline shortage of 1973 in the United States.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

The burden that results from a tax on yachts falls more heavily on the buyers of yachts than on the sellers of yachts.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would not interfere with market equilibria?

Accepted Answer

A)  a minimum wage 
B)  a rent control 
C)  a non-binding price floor 
D)  a binding price ceiling 
A)  a minimum wage 
B)  a rent control 
C)  a non-binding price floor 
D)  a binding price ceiling

Question 7

A binding minimum wage creates a surplus of labor.

Accepted Answer

A) True 
 B)False

Question 8

If the government removes a tax on a good,then the price paid by buyers will

Accepted Answer

A)  increase, and the price received by sellers will increase. 
B)  increase, and the price received by sellers will decrease. 
C)  decrease, and the price received by sellers will increase. 
D)  decrease, and the price received by sellers will decrease. 
A)  increase, and the price received by sellers will increase. 
B)  increase, and the price received by sellers will decrease. 
C)  decrease, and the price received by sellers will increase. 
D)  decrease, and the price received by sellers will decrease.

Question 9

If a tax is levied on the sellers of a product,then the demand curve will

Accepted Answer

A)  shift down. 
B)  shift up. 
C)  become flatter. 
D)  not shift. 
A)  shift down. 
B)  shift up. 
C)  become flatter. 
D)  not shift.

Question 10

Under rent control,landlords cease to be responsive to tenants' concerns about the quality of the housing because

Accepted Answer

A)  with rent control, the government guarantees landlords a minimum level of profit. 
B)  they become resigned to the fact that many of their apartments are going to be vacant at any given time. 
C)  with shortages and waiting lists, they have no incentive to maintain and improve their property. 
D)  with rent control, it becomes the government's responsibility to maintain rental housing. 
A)  with rent control, the government guarantees landlords a minimum level of profit. 
B)  they become resigned to the fact that many of their apartments are going to be vacant at any given time. 
C)  with shortages and waiting lists, they have no incentive to maintain and improve their property. 
D)  with rent control, it becomes the government's responsibility to maintain rental housing.

Question 11

Which of the following is not an example of a public policy?

Accepted Answer

A)  rent-control laws 
B)  minimum-wage laws 
C)  taxes 
D)  equilibrium laws 
A)  rent-control laws 
B)  minimum-wage laws 
C)  taxes 
D)  equilibrium laws

Question 12

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

Accepted Answer

A)  surplus of 40 units. 
B)  surplus of 85 units. 
C)  shortage of 45 units. 
D)  shortage of 85 units. 
A)  surplus of 40 units. 
B)  surplus of 85 units. 
C)  shortage of 45 units. 
D)  shortage of 85 units.

Question 13

When free markets ration goods with prices,it is both efficient and impersonal.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-6
  
-Refer to Figure 6-6.Which of the following statements is correct?

Accepted Answer

A)  A price ceiling set at $12 would be binding, but a price ceiling set at $8 would not be binding. 
B)  A price floor set at $8 would be binding, but a price ceiling set at $8 would not be binding. 
C)  A price ceiling set at $9 would result in a surplus. 
D)  A price floor set at $11 would result in a surplus. 
A)  A price ceiling set at $12 would be binding, but a price ceiling set at $8 would not be binding. 
B)  A price floor set at $8 would be binding, but a price ceiling set at $8 would not be binding. 
C)  A price ceiling set at $9 would result in a surplus. 
D)  A price floor set at $11 would result in a surplus.

Question 15

A tax of $1 on buyers always decreases the equilibrium price by $1.

Accepted Answer

A) True 
 B)False

Question 16

A large majority of economists favor eliminating the minimum wage.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)  supplied to exceed quantity demanded by 45 units. 
B)  supplied to exceed quantity demanded by 85 units. 
C)  demanded to exceed quantity supplied by 45 units. 
D)  demanded to exceed quantity supplied by 85 units. 
A)  supplied to exceed quantity demanded by 45 units. 
B)  supplied to exceed quantity demanded by 85 units. 
C)  demanded to exceed quantity supplied by 45 units. 
D)  demanded to exceed quantity supplied by 85 units.

Question 18

Taxes levied on sellers and taxes levied on buyers are equivalent.

Accepted Answer

A) True 
 B)False

Question 19

A tax on the sellers of cameras 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)  Both a) and b) are correct. 
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)  Both a) and b) are correct.

Question 20

Table 6-2
  
-Refer to Table 6-2.A price floor set at $5 will

Accepted Answer

A)  be binding and will result in a surplus of 50 units. 
B)  be binding and will result in a surplus of 75 units. 
C)  be binding and will result in a surplus of 125 units. 
D)  not be binding. 
A)  be binding and will result in a surplus of 50 units. 
B)  be binding and will result in a surplus of 75 units. 
C)  be binding and will result in a surplus of 125 units. 
D)  not be binding.

Exam 6: Supply, Demand, And Government Policies.

A binding minimum wage

Most labor economists believe that the supply of labor is

A price ceiling caused the gasoline shortage of 1973 in the United States.

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

The burden that results from a tax on yachts falls more heavily on the buyers of yachts than on the sellers of yachts.

Which of the following would not interfere with market equilibria?

A binding minimum wage creates a surplus of labor.

If the government removes a tax on a good,then the price paid by buyers will

If a tax is levied on the sellers of a product,then the demand curve will

Under rent control,landlords cease to be responsive to tenants' concerns about the quality of the housing because

Which of the following is not an example of a public policy?

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

When free markets ration goods with prices,it is both efficient and impersonal.

Figure 6-6 -Refer to Figure 6-6.Which of the following statements is correct?

A tax of $1 on buyers always decreases the equilibrium price by $1.

A large majority of economists favor eliminating the minimum wage.

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

Taxes levied on sellers and taxes levied on buyers are equivalent.

A tax on the sellers of cameras encourages

Table 6-2 -Refer to Table 6-2.A price floor set at $5 will

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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