Question 1

Figure 6-19
  
-Refer to Figure 6-19.For every unit of the good that is sold,sellers are required to send

Accepted Answer

A)  one dollar to the government, and buyers are required to send two dollars to the government. 
B)  two dollars to the government, and buyers are required to send one dollar to the government. 
C)  three dollars to the government, and buyers are required to send nothing to the government. 
D)  nothing to the government, and buyers are required to send two dollars to the government. 
A)  one dollar to the government, and buyers are required to send two dollars to the government. 
B)  two dollars to the government, and buyers are required to send one dollar to the government. 
C)  three dollars to the government, and buyers are required to send nothing to the government. 
D)  nothing to the government, and buyers are required to send two dollars to the government.

Question 2

A price floor set below the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 3

When the government imposes a binding price ceiling on a competitive market,a surplus of the good arises,and sellers must ration the scarce goods among the large number of potential buyers.

Accepted Answer

A) True 
 B)False

Question 4

Figure 6-3

-Refer to Figure 6-3.In panel (a),there will be

Accepted Answer

A)  a shortage of wheat. 
B)  equilibrium in the market. 
C)  a surplus of wheat. 
D)  lines of people waiting to buy wheat. 
A)  a shortage of wheat. 
B)  equilibrium in the market. 
C)  a surplus of wheat. 
D)  lines of people waiting to buy wheat.

Question 5

Figure 6-6
  
-Refer to Figure 6-6.If the government imposes a price floor of $6 on this market,then there will be

Accepted Answer

A)  no surplus. 
B)  a surplus of 20 units. 
C)  a surplus of 30 units. 
D)  a surplus of 40 units. 
A)  no surplus. 
B)  a surplus of 20 units. 
C)  a surplus of 30 units. 
D)  a surplus of 40 units.

Question 6

Figure 6-10
  
-Refer to Figure 6-10.A price floor set at

Accepted Answer

A)  $6 will be binding and will result in a surplus of 8 units. 
B)  $6 will be binding and will result in a surplus of 4 units. 
C)  $16 will be binding and will result in a surplus of 12 units. 
D)  $16 will be binding and will result in a surplus of 6 units. 
A)  $6 will be binding and will result in a surplus of 8 units. 
B)  $6 will be binding and will result in a surplus of 4 units. 
C)  $16 will be binding and will result in a surplus of 12 units. 
D)  $16 will be binding and will result in a surplus of 6 units.

Question 7

All buyers benefit from a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 8

Table 6-2
  
-Refer to Table 6-2.A price ceiling set at $15 will

Accepted Answer

A)  be binding and will result in a shortage of 50 units. 
B)  be binding and will result in a shortage of 100 units. 
C)  be binding and will result in a shortage of 125 units. 
D)  not be binding. 
A)  be binding and will result in a shortage of 50 units. 
B)  be binding and will result in a shortage of 100 units. 
C)  be binding and will result in a shortage of 125 units. 
D)  not be binding.

Question 9

One disadvantage of government subsidies over price controls is that subsidies

Accepted Answer

A)  prevent the attainment of equilibrium in the markets in which they are imposed. 
B)  make higher taxes necessary. 
C)  are always unfair to those with low incomes. 
D)  cause unemployment. 
A)  prevent the attainment of equilibrium in the markets in which they are imposed. 
B)  make higher taxes necessary. 
C)  are always unfair to those with low incomes. 
D)  cause unemployment.

Question 10

A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

Accepted Answer

A) True 
 B)False

Question 11

A $0.10 tax levied on the sellers of chocolate bars will cause the

Accepted Answer

A)  supply curve for chocolate bars to shift down by $0.10. 
B)  supply curve for chocolate bars to shift up by $0.10. 
C)  demand curve for chocolate bars to shift down by $0.10. 
D)  demand curve for chocolate bars to shift up by $0.10. 
A)  supply curve for chocolate bars to shift down by $0.10. 
B)  supply curve for chocolate bars to shift up by $0.10. 
C)  demand curve for chocolate bars to shift down by $0.10. 
D)  demand curve for chocolate bars to shift up by $0.10.

Question 12

Figure 6-14
The vertical distance between points A and B represents the tax in the market.
  
-Refer to Figure 6-14.The amount of the tax per unit is

Accepted Answer

A)  $6. 
B)  $8. 
C)  $14. 
D)  $18. 
A)  $6. 
B)  $8. 
C)  $14. 
D)  $18.

Question 13

A tax on the buyers of cereal will increase the price of cereal paid by buyers,

Accepted Answer

A)  decrease the effective price of cereal received by sellers, and decrease the equilibrium quantity of cereal. 
B)  decrease the effective price of cereal received by sellers, and increase the equilibrium quantity of cereal. 
C)  increase the effective price of cereal received by sellers, and decrease the equilibrium quantity of cereal. 
D)  increase the effective price of cereal received by sellers, and increase the equilibrium quantity of cereal. 
A)  decrease the effective price of cereal received by sellers, and decrease the equilibrium quantity of cereal. 
B)  decrease the effective price of cereal received by sellers, and increase the equilibrium quantity of cereal. 
C)  increase the effective price of cereal received by sellers, and decrease the equilibrium quantity of cereal. 
D)  increase the effective price of cereal received by sellers, and increase the equilibrium quantity of cereal.

Question 14

Which of the following is not a result of rent control?

Accepted Answer

A)  fewer new apartments offered for rent 
B)  less maintenance provided by landlords 
C)  bribery 
D)  higher quality housing 
A)  fewer new apartments offered for rent 
B)  less maintenance provided by landlords 
C)  bribery 
D)  higher quality housing

Question 15

A tax on buyers decreases the quantity of the good sold in the market.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements is correct?

Accepted Answer

A)  A tax levied on buyers will never be partially paid by sellers. 
B)  Who actually pays a tax depends on the price elasticities of supply and demand. 
C)  Government can decide who actually pays a tax. 
D)  A tax levied on sellers always will be passed on completely to buyers. 
A)  A tax levied on buyers will never be partially paid by sellers. 
B)  Who actually pays a tax depends on the price elasticities of supply and demand. 
C)  Government can decide who actually pays a tax. 
D)  A tax levied on sellers always will be passed on completely to buyers.

Question 17

A minimum wage that is set above a market's equilibrium wage will result in an excess

Accepted Answer

A)  demand for labor, that is, unemployment. 
B)  demand for labor, that is, a shortage of workers. 
C)  supply of labor, that is, unemployment. 
D)  supply of labor, that is, a shortage of workers. 
A)  demand for labor, that is, unemployment. 
B)  demand for labor, that is, a shortage of workers. 
C)  supply of labor, that is, unemployment. 
D)  supply of labor, that is, a shortage of workers.

Question 18

Figure 6-21
  
-Refer to Figure 6-22.How much tax revenue does this tax generate for the government?

Accepted Answer

A)  $150 
B)  $180 
C)  $250 
D)  $300 
A)  $150 
B)  $180 
C)  $250 
D)  $300

Question 19

Figure 6-4
  
-Refer to Figure 6-4.A government-imposed price of $16 in this market could be an example of a
(i)binding price ceiling.
(ii)non-binding price ceiling.
(iii)binding price floor.
(iv)non-binding price floor.

Accepted Answer

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

Question 20

Figure 6-11
  
-Refer to Figure 6-11.Which of the following statements is not correct?

Accepted Answer

A)  A government-imposed price of $9 would be a binding price floor if market demand is Demand A and a binding price ceiling if market demand is Demand B. 
B)  A government-imposed price of $15 would be a binding price ceiling if market demand is either Demand A or Demand B. 
C)  A government-imposed price of $3 would be a binding price ceiling if market demand is either Demand A or Demand B. 
D)  A government-imposed price of $12 would be a binding price floor if market demand is Demand A and a non-binding price ceiling if market demand is Demand B. 
A)  A government-imposed price of $9 would be a binding price floor if market demand is Demand A and a binding price ceiling if market demand is Demand B. 
B)  A government-imposed price of $15 would be a binding price ceiling if market demand is either Demand A or Demand B. 
C)  A government-imposed price of $3 would be a binding price ceiling if market demand is either Demand A or Demand B. 
D)  A government-imposed price of $12 would be a binding price floor if market demand is Demand A and a non-binding price ceiling if market demand is Demand B.

Exam 6: Supply, Demand, And Government Policies.

Figure 6-19 -Refer to Figure 6-19.For every unit of the good that is sold,sellers are required to send

A price floor set below the equilibrium price causes a surplus in the market.

When the government imposes a binding price ceiling on a competitive market,a surplus of the good arises,and sellers must ration the scarce goods among the large number of potential buyers.

Figure 6-3 -Refer to Figure 6-3.In panel (a),there will be

Figure 6-6 -Refer to Figure 6-6.If the government imposes a price floor of $6 on this market,then there will be

Figure 6-10 -Refer to Figure 6-10.A price floor set at

All buyers benefit from a binding price ceiling.

Table 6-2 -Refer to Table 6-2.A price ceiling set at $15 will

One disadvantage of government subsidies over price controls is that subsidies

A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

A $0.10 tax levied on the sellers of chocolate bars will cause the

Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14.The amount of the tax per unit is

A tax on the buyers of cereal will increase the price of cereal paid by buyers,

Which of the following is not a result of rent control?

A tax on buyers decreases the quantity of the good sold in the market.

Which of the following statements is correct?

A minimum wage that is set above a market's equilibrium wage will result in an excess

Figure 6-21 -Refer to Figure 6-22.How much tax revenue does this tax generate for the government?

Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $16 in this market could be an example of a (i)binding price ceiling. (ii)non-binding price ceiling. (iii)binding price floor. (iv)non-binding price floor.

Figure 6-11 -Refer to Figure 6-11.Which of the following statements is not correct?

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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