Question 1

Figure 6-19
  
-Refer to Figure 6-19.How much tax revenue does this tax produce for the government?

Accepted Answer

A)  $24 
B)  $30 
C)  $32 
D)  $56 
A)  $24 
B)  $30 
C)  $32 
D)  $56

Question 2

Figure 6-6
  
-Refer to Figure 6-6.Which of the following price floors would be binding in this market?

Accepted Answer

A)  $6 
B)  $8 
C)  $10 
D)  $12 
A)  $6 
B)  $8 
C)  $10 
D)  $12

Question 3

Suppose that a tax is placed on books.If the sellers pay the majority of the tax,then we know that the

Accepted Answer

A)  demand is more inelastic than the supply. 
B)  supply is more inelastic than the demand. 
C)  government has required that buyers remit the tax payments. 
D)  government has required that sellers remit the tax payments. 
A)  demand is more inelastic than the supply. 
B)  supply is more inelastic than the demand. 
C)  government has required that buyers remit the tax payments. 
D)  government has required that sellers remit the tax payments.

Question 4

If the equilibrium price of an airline ticket is $400 and the government imposes a price floor of $500 on airline tickets,then fewer airline tickets will be sold than at the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 5

If a tax is imposed on the sellers of a product,then the tax burden will fall entirely on the sellers.

Accepted Answer

A) True 
 B)False

Question 6

If the government removes a binding price floor from a market,then the price paid by buyers will

Accepted Answer

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

Question 7

Although lawmakers legislated a fifty-fifty division of the payment of the FICA tax,

Accepted Answer

A)  the actual tax incidence is unaffected by the legislated tax incidence. 
B)  the employer now is required by law to pay more than 50 percent of the tax. 
C)  the employee now is required by law to pay more than 50 percent of the tax. 
D)  employers are no longer required by law to pay any portion of the tax. 
A)  the actual tax incidence is unaffected by the legislated tax incidence. 
B)  the employer now is required by law to pay more than 50 percent of the tax. 
C)  the employee now is required by law to pay more than 50 percent of the tax. 
D)  employers are no longer required by law to pay any portion of the tax.

Question 8

Figure 6-1

-Refer to Figure 6-1.In which panel(s)of the figure would there be a shortage of the good at the price ceiling?

Accepted Answer

A)  panel (a) only 
B)  panel (b) only 
C)  both panel (a) and panel (b) 
D)  neither panel (a) nor panel (b) 
A)  panel (a) only 
B)  panel (b) only 
C)  both panel (a) and panel (b) 
D)  neither panel (a) nor panel (b)

Question 9

Tax incidence

Accepted Answer

A)  depends on the legislated burden. 
B)  is entirely random. 
C)  depends on the elasticities of supply and demand. 
D)  falls entirely on buyers or entirely on sellers. 
A)  depends on the legislated burden. 
B)  is entirely random. 
C)  depends on the elasticities of supply and demand. 
D)  falls entirely on buyers or entirely on sellers.

Question 10

FICA is an example of a payroll tax,which is a tax on the wages that firms pay their workers.

Accepted Answer

A) True 
 B)False

Question 11

The tax burden will fall most heavily on buyers of the good when the demand curve

Accepted Answer

A)  is relatively steep, and the supply curve is relatively flat. 
B)  is relatively flat, and the supply curve is relatively steep. 
C)  and the supply curve are both relatively flat. 
D)  and the supply curve are both relatively steep. 
A)  is relatively steep, and the supply curve is relatively flat. 
B)  is relatively flat, and the supply curve is relatively steep. 
C)  and the supply curve are both relatively flat. 
D)  and the supply curve are both relatively steep.

Question 12

If a tax is imposed on the buyers of a product,then the tax burden will fall entirely on the buyers.

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-9
  
-Refer to Figure 6-9.At which price would a price floor be nonbinding?

Accepted Answer

A)  $8 
B)  $7 
C)  $6 
D)  $5 
A)  $8 
B)  $7 
C)  $6 
D)  $5

Question 14

Price controls are usually enacted

Accepted Answer

A)  as a means of raising revenue for public purposes. 
B)  when policymakers believe that the market price of a good or service is unfair to buyers or sellers. 
C)  when policymakers detect inefficiencies in a market. 
D)  All of the above are correct. 
A)  as a means of raising revenue for public purposes. 
B)  when policymakers believe that the market price of a good or service is unfair to buyers or sellers. 
C)  when policymakers detect inefficiencies in a market. 
D)  All of the above are correct.

Question 15

A price floor set below the equilibrium price causes quantity supplied to exceed quantity demanded.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following was not a result of the luxury tax imposed by Congress in 1990?

Accepted Answer

A)  The larger part of the tax burden fell on sellers. 
B)  A larger part of the tax burden fell on the middle class than on the rich. 
C)  Even the wealthy demanded fewer luxury goods. 
D)  The tax was never repealed or even modified. 
A)  The larger part of the tax burden fell on sellers. 
B)  A larger part of the tax burden fell on the middle class than on the rich. 
C)  Even the wealthy demanded fewer luxury goods. 
D)  The tax was never repealed or even modified.

Question 17

Figure 6-7
  
-Refer to Figure 6-7.Which of the following price controls would cause a shortage of 20 units of the good?

Accepted Answer

A)  a price ceiling set at $4 
B)  a price ceiling set at $5 
C)  a price floor set at $7 
D)  a price floor set at $8 
A)  a price ceiling set at $4 
B)  a price ceiling set at $5 
C)  a price floor set at $7 
D)  a price floor set at $8

Question 18

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Accepted Answer

A)  Policymakers have studied the effects of the price floor carefully, and they recognize that the price floor is advantageous for society as a whole. 
B)  Buyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policy makers into imposing the price floor. 
C)  Buyers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor. 
D)  Sellers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor. 
A)  Policymakers have studied the effects of the price floor carefully, and they recognize that the price floor is advantageous for society as a whole. 
B)  Buyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policy makers into imposing the price floor. 
C)  Buyers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor. 
D)  Sellers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor.

Question 19

Figure 6-18
  
-Refer to Figure 6-18.The amount of the tax per unit is

Accepted Answer

A)  $1. 
B)  $1.50. 
C)  $2.50. 
D)  $3.50. 
A)  $1. 
B)  $1.50. 
C)  $2.50. 
D)  $3.50.

Question 20

Which of the following is correct? A tax burden

Accepted Answer

A)  falls more heavily on the side of the market that is more elastic. 
B)  falls more heavily on the side of the market that is less elastic. 
C)  falls more heavily on the side of the market that is closest to unit elastic. 
D)  is distributed independently of the relative elasticities of supply and demand. 
A)  falls more heavily on the side of the market that is more elastic. 
B)  falls more heavily on the side of the market that is less elastic. 
C)  falls more heavily on the side of the market that is closest to unit elastic. 
D)  is distributed independently of the relative elasticities of supply and demand.

Exam 6: Supply, Demand, And Government Policies.

Figure 6-19 -Refer to Figure 6-19.How much tax revenue does this tax produce for the government?

Figure 6-6 -Refer to Figure 6-6.Which of the following price floors would be binding in this market?

Suppose that a tax is placed on books.If the sellers pay the majority of the tax,then we know that the

If the equilibrium price of an airline ticket is $400 and the government imposes a price floor of $500 on airline tickets,then fewer airline tickets will be sold than at the market equilibrium.

If a tax is imposed on the sellers of a product,then the tax burden will fall entirely on the sellers.

If the government removes a binding price floor from a market,then the price paid by buyers will

Although lawmakers legislated a fifty-fifty division of the payment of the FICA tax,

Figure 6-1 -Refer to Figure 6-1.In which panel(s)of the figure would there be a shortage of the good at the price ceiling?

Tax incidence

FICA is an example of a payroll tax,which is a tax on the wages that firms pay their workers.

The tax burden will fall most heavily on buyers of the good when the demand curve

If a tax is imposed on the buyers of a product,then the tax burden will fall entirely on the buyers.

Figure 6-9 -Refer to Figure 6-9.At which price would a price floor be nonbinding?

Price controls are usually enacted

A price floor set below the equilibrium price causes quantity supplied to exceed quantity demanded.

Which of the following was not a result of the luxury tax imposed by Congress in 1990?

Figure 6-7 -Refer to Figure 6-7.Which of the following price controls would cause a shortage of 20 units of the good?

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Figure 6-18 -Refer to Figure 6-18.The amount of the tax per unit is

Which of the following is correct? A tax burden

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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