Question 1

A binding price floor causes quantity supplied to be less than quantity demanded.

Accepted Answer

A) True 
 B)False

Question 2

If the government removes a binding price ceiling from a market,then the price received by sellers will

Accepted Answer

A)  decrease, and the quantity sold in the market will decrease. 
B)  decrease, and the quantity sold in the market will increase. 
C)  increase, and the quantity sold in the market will decrease. 
D)  increase, and the quantity sold in the market will increase. 
A)  decrease, and the quantity sold in the market will decrease. 
B)  decrease, and the quantity sold in the market will increase. 
C)  increase, and the quantity sold in the market will decrease. 
D)  increase, and the quantity sold in the market will increase.

Question 3

Even though federal law mandates that workers and firms each pay half of the total FICA tax,the tax burden may not fall equally on workers and firms.

Accepted Answer

A) True 
 B)False

Question 4

To be binding,a price ceiling must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 5

A tax imposed on the buyers of a good will raise the

Accepted Answer

A)  price paid by buyers and lower the equilibrium quantity. 
B)  price paid by buyers and raise the equilibrium quantity. 
C)  effective price received by sellers and lower the equilibrium quantity. 
D)  effective price received by sellers and raise the equilibrium quantity. 
A)  price paid by buyers and lower the equilibrium quantity. 
B)  price paid by buyers and raise the equilibrium quantity. 
C)  effective price received by sellers and lower the equilibrium quantity. 
D)  effective price received by sellers and raise the equilibrium quantity.

Question 6

Figure 6-21
  
-Refer to Figure 6-22.As the figure is drawn,who sends the tax payment to the government?

Accepted Answer

A)  The buyers send the tax payment. 
B)  The sellers send the tax payment. 
C)  A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers. 
D)  The question of who sends the tax payment cannot be determined from the figure. 
A)  The buyers send the tax payment. 
B)  The sellers send the tax payment. 
C)  A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers. 
D)  The question of who sends the tax payment cannot be determined from the figure.

Question 7

In an unregulated labor market,the wage adjusts to balance labor supply and labor demand.

Accepted Answer

A) True 
 B)False

Question 8

Figure 6-5
  
-Refer to Figure 6-5.If the horizontal line on the graph represents a price ceiling,then the price ceiling is

Accepted Answer

A)  binding and creates a surplus of 40 units of the good. 
B)  binding and creates a surplus of 90 units of the good. 
C)  not binding but creates a surplus of 40 units of the good. 
D)  not binding, and there will be no surplus or shortage of the good. 
A)  binding and creates a surplus of 40 units of the good. 
B)  binding and creates a surplus of 90 units of the good. 
C)  not binding but creates a surplus of 40 units of the good. 
D)  not binding, and there will be no surplus or shortage of the good.

Question 9

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

Accepted Answer

A)  supply of gasoline to decrease. 
B)  quantity of gasoline demanded to decrease. 
C)  equilibrium price of gasoline to increase. 
D)  All of the above are correct. 
A)  supply of gasoline to decrease. 
B)  quantity of gasoline demanded to decrease. 
C)  equilibrium price of gasoline to increase. 
D)  All of the above are correct.

Question 10

A binding price ceiling may not help all consumers,but it does not hurt any consumers.

Accepted Answer

A) True 
 B)False

Question 11

If a tax is imposed on a market with inelastic demand and elastic supply,then

Accepted Answer

A)  buyers will bear most of the burden of the tax. 
B)  sellers will bear most of the burden of the tax. 
C)  the burden of the tax will be shared equally between buyers and sellers. 
D)  it is impossible to determine how the burden of the tax will be shared. 
A)  buyers will bear most of the burden of the tax. 
B)  sellers will bear most of the burden of the tax. 
C)  the burden of the tax will be shared equally between buyers and sellers. 
D)  it is impossible to determine how the burden of the tax will be shared.

Question 12

If a tax is levied on the sellers of flour,then

Accepted Answer

A)  buyers will bear the entire burden of the tax. 
B)  sellers will bear the entire burden of the tax. 
C)  buyers and sellers will share the burden of the tax. 
D)  the government will bear the entire burden of the tax. 
A)  buyers will bear the entire burden of the tax. 
B)  sellers will bear the entire burden of the tax. 
C)  buyers and sellers will share the burden of the tax. 
D)  the government will bear the entire burden of the tax.

Question 13

A binding price ceiling causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-21
  
-Refer to Figure 6-22.The effective price that sellers receive 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 15

The price paid by buyers in a market will decrease if the government

Accepted Answer

A)  imposes a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  increases a tax on the good sold in that market. 
D)  decreases a binding price floor in that market. 
A)  imposes a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  increases a tax on the good sold in that market. 
D)  decreases a binding price floor in that market.

Question 16

The incidence of a tax falls more heavily on

Accepted Answer

A)  consumers than producers if demand is more inelastic than supply. 
B)  producers than consumers if supply is more inelastic than demand. 
C)  consumers than producers if supply is more elastic than demand. 
D)  All of the above are correct. 
A)  consumers than producers if demand is more inelastic than supply. 
B)  producers than consumers if supply is more inelastic than demand. 
C)  consumers than producers if supply is more elastic than demand. 
D)  All of the above are correct.

Question 17

If a tax is levied on the buyers of a product,then there will be a(n)

Accepted Answer

A)  downward shift of the supply curve. 
B)  upward shift of the supply curve. 
C)  movement up and to the right along the supply curve. 
D)  movement down and to the left along the supply curve. 
A)  downward shift of the supply curve. 
B)  upward shift of the supply curve. 
C)  movement up and to the right along the supply curve. 
D)  movement down and to the left along the supply curve.

Question 18

Which of the following is not correct?

Accepted Answer

A)  Some states in the U.S. mandate minimum wages above the federal level. 
B)  Most European nations have minimum-wage laws. 
C)  The U.S. minimum wage is significantly higher than the minimum wages in France and the United Kingdom. 
D)  The U.S. Congress first instituted a minimum wage with the Fair Labor Standards Act. 
A)  Some states in the U.S. mandate minimum wages above the federal level. 
B)  Most European nations have minimum-wage laws. 
C)  The U.S. minimum wage is significantly higher than the minimum wages in France and the United Kingdom. 
D)  The U.S. Congress first instituted a minimum wage with the Fair Labor Standards Act.

Question 19

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

Accepted Answer

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

Question 20

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

Exam 6: Supply, Demand, And Government Policies.

A binding price floor causes quantity supplied to be less than quantity demanded.

If the government removes a binding price ceiling from a market,then the price received by sellers will

Even though federal law mandates that workers and firms each pay half of the total FICA tax,the tax burden may not fall equally on workers and firms.

To be binding,a price ceiling must be set above the equilibrium price.

A tax imposed on the buyers of a good will raise the

Figure 6-21 -Refer to Figure 6-22.As the figure is drawn,who sends the tax payment to the government?

In an unregulated labor market,the wage adjusts to balance labor supply and labor demand.

Figure 6-5 -Refer to Figure 6-5.If the horizontal line on the graph represents a price ceiling,then the price ceiling is

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

A binding price ceiling may not help all consumers,but it does not hurt any consumers.

If a tax is imposed on a market with inelastic demand and elastic supply,then

If a tax is levied on the sellers of flour,then

A binding price ceiling causes a shortage in the market.

Figure 6-21 -Refer to Figure 6-22.The effective price that sellers receive after the tax is imposed is

The price paid by buyers in a market will decrease if the government

The incidence of a tax falls more heavily on

If a tax is levied on the buyers of a product,then there will be a(n)

Which of the following is not correct?

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

A nonbinding 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.

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