Question 1

Suppose the government imposes a $40 tax on the buyers of refrigerators.The tax would

Accepted Answer

A)  shift the demand curve downward by less than $40. 
B)  raise the equilibrium price by $40. 
C)  create a $20 tax burden each for buyers and sellers. 
D)  discourage market activity. 
A)  shift the demand curve downward by less than $40. 
B)  raise the equilibrium price by $40. 
C)  create a $20 tax burden each for buyers and sellers. 
D)  discourage market activity.

Question 2

If a price ceiling of $1.50 per gallon is imposed on gasoline,and the market equilibrium price is $2,then the price ceiling is a binding constraint on the market.

Accepted Answer

A) True 
 B)False

Question 3

A tax imposed on the buyers of a good will lower 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 4

Figure 6-23
  
-Refer to Figure 6-23.The per-unit burden of the tax is

Accepted Answer

A)  $4 for buyers and $6 for sellers. 
B)  $5 for buyers and $5 for sellers. 
C)  $6 for buyers and $4 for sellers. 
D)  $10 for buyers and $0 for sellers. 
A)  $4 for buyers and $6 for sellers. 
B)  $5 for buyers and $5 for sellers. 
C)  $6 for buyers and $4 for sellers. 
D)  $10 for buyers and $0 for sellers.

Question 5

A tax on buyers shifts the demand curve to the right.

Accepted Answer

A) True 
 B)False

Question 6

Using the graph shown,answer the following questions.
a.What was the equilibrium price in this market before the tax?
b.What is the amount of the tax?
c.How much of the tax will the buyers pay?
d.How much of the tax will the sellers pay?
 How much will the buyer pay for the product after the tax is imposed?
 How much will the seller receive after the tax is imposed?
 As a result of the tax,what has happened to the level of market activity?

Accepted Answer

a.$5
b.$3
c.$2
d.$1
e.$7
f.$4

Question 7

Under rent control,bribery is a mechanism to

Accepted Answer

A)  bring the total price of an apartment (including the bribe) closer to the equilibrium price. 
B)  allocate housing to the poorest individuals in the market. 
C)  force the total price of an apartment (including the bribe) to be less than the market price. 
D)  allocate housing to the most deserving tenants. 
A)  bring the total price of an apartment (including the bribe) closer to the equilibrium price. 
B)  allocate housing to the poorest individuals in the market. 
C)  force the total price of an apartment (including the bribe) to be less than the market price. 
D)  allocate housing to the most deserving tenants.

Question 8

Figure 6-11
  
-Refer to Figure 6-11.If the government imposes a price floor at $9,it would be

Accepted Answer

A)  binding if market demand is Demand A or Demand B. 
B)  non-binding if market demand is Demand A or Demand B. 
C)  binding if market demand is Demand A and non-binding if market demand is Demand B. 
D)  non-binding if market demand is Demand A and binding if market demand is Demand B. 
A)  binding if market demand is Demand A or Demand B. 
B)  non-binding if market demand is Demand A or Demand B. 
C)  binding if market demand is Demand A and non-binding if market demand is Demand B. 
D)  non-binding if market demand is Demand A and binding if market demand is Demand B.

Question 9

Workers,rather than firms,bear most of the burden of the payroll tax.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following causes a surplus of a good?

Accepted Answer

A)  a binding price floor 
B)  a binding price ceiling 
C)  a tax on the good 
D)  More than one of the above is correct. 
A)  a binding price floor 
B)  a binding price ceiling 
C)  a tax on the good 
D)  More than one of the above is correct.

Question 11

Which of the following causes a shortage of a good?

Accepted Answer

A)  a binding price floor 
B)  a binding price ceiling 
C)  a tax on the good 
D)  None of the above is correct. 
A)  a binding price floor 
B)  a binding price ceiling 
C)  a tax on the good 
D)  None of the above is correct.

Question 12

A tax on golf clubs will cause buyers of golf clubs to pay a higher price,sellers of golf clubs to receive a lower price,and fewer golf clubs to be sold.

Accepted Answer

A) True 
 B)False

Question 13

When government imposes a price ceiling or a price floor on a market,

Accepted Answer

A)  price no longer serves as a rationing device. 
B)  efficiency in the market is enhanced. 
C)  shortages and surpluses are eliminated. 
D)  both buyers and sellers become better off. 
A)  price no longer serves as a rationing device. 
B)  efficiency in the market is enhanced. 
C)  shortages and surpluses are eliminated. 
D)  both buyers and sellers become better off.

Question 14

Figure 6-27
  
-Refer to Figure 6-27.If the government places a $2 tax in the market,the seller bears $2 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 15

The price received by sellers in a market will decrease if the government

Accepted Answer

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

Question 16

When a tax is placed on the sellers of a product,the

Accepted Answer

A)  size of the market decreases. 
B)  effective price received by sellers decreases, and the price paid by buyers increases. 
C)  supply of the product decreases. 
D)  All of the above are correct. 
A)  size of the market decreases. 
B)  effective price received by sellers decreases, and the price paid by buyers increases. 
C)  supply of the product decreases. 
D)  All of the above are correct.

Question 17

A tax imposed on the sellers of a good will

Accepted Answer

A)  raise both the price buyers pay and the effective price sellers receive. 
B)  raise the price buyers pay and lower the effective price sellers receive. 
C)  lower the price buyers pay and raise the effective price sellers receive. 
D)  lower both the price buyers pay and the effective price sellers receive. 
A)  raise both the price buyers pay and the effective price sellers receive. 
B)  raise the price buyers pay and lower the effective price sellers receive. 
C)  lower the price buyers pay and raise the effective price sellers receive. 
D)  lower both the price buyers pay and the effective price sellers receive.

Question 18

Figure 6-8
  
-Refer to Figure 6-8.If the government imposes a price ceiling of $2 on this market,then there will be

Accepted Answer

A)  no shortage of the good. 
B)  a shortage of 40 units of the good. 
C)  a shortage of 60 units of the good. 
D)  a shortage of 85 units of the good. 
A)  no shortage of the good. 
B)  a shortage of 40 units of the good. 
C)  a shortage of 60 units of the good. 
D)  a shortage of 85 units of the good.

Question 19

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages.The tax would shift

Accepted Answer

A)  demand, raising both the equilibrium price and quantity in the market for artificially-sweetened beverages. 
B)  demand, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages. 
C)  supply, raising the equilibrium price and lowering the equilibrium quantity in the market for artificially-sweetened beverages. 
D)  supply, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages. 
A)  demand, raising both the equilibrium price and quantity in the market for artificially-sweetened beverages. 
B)  demand, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages. 
C)  supply, raising the equilibrium price and lowering the equilibrium quantity in the market for artificially-sweetened beverages. 
D)  supply, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages.

Question 20

Figure 6-23
  
-Refer to Figure 6-23.How much tax revenue does this tax produce for the government?

Accepted Answer

A)  $480 
B)  $600 
C)  $800 
D)  $1120 
A)  $480 
B)  $600 
C)  $800 
D)  $1120

Exam 6: Supply, Demand, And Government Policies.

Suppose the government imposes a $40 tax on the buyers of refrigerators.The tax would

If a price ceiling of $1.50 per gallon is imposed on gasoline,and the market equilibrium price is $2,then the price ceiling is a binding constraint on the market.

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

Figure 6-23 -Refer to Figure 6-23.The per-unit burden of the tax is

A tax on buyers shifts the demand curve to the right.

Under rent control,bribery is a mechanism to

Figure 6-11 -Refer to Figure 6-11.If the government imposes a price floor at $9,it would be

Workers,rather than firms,bear most of the burden of the payroll tax.

Which of the following causes a surplus of a good?

Which of the following causes a shortage of a good?

A tax on golf clubs will cause buyers of golf clubs to pay a higher price,sellers of golf clubs to receive a lower price,and fewer golf clubs to be sold.

When government imposes a price ceiling or a price floor on a market,

Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the seller bears $2 of the tax burden.

The price received by sellers in a market will decrease if the government

When a tax is placed on the sellers of a product,the

A tax imposed on the sellers of a good will

Figure 6-8 -Refer to Figure 6-8.If the government imposes a price ceiling of $2 on this market,then there will be

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages.The tax would shift

Figure 6-23 -Refer to Figure 6-23.How much tax revenue does this tax produce for the government?

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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