Question 1

The quantity sold in a market will decrease if the government decreases a

Accepted Answer

A)  binding price floor in that market. 
B)  binding price ceiling in that market. 
C)  tax on the good sold in that market. 
D)  All of the above are correct. 
A)  binding price floor in that market. 
B)  binding price ceiling in that market. 
C)  tax on the good sold in that market. 
D)  All of the above are correct.

Question 2

If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars,then the price paid by buyers will

Accepted Answer

A)  not change, and the price received by sellers will not change. 
B)  not change, and the price received by sellers will decrease. 
C)  decrease, and the price received by sellers will not change. 
D)  decrease, and the price received by sellers will decrease. 
A)  not change, and the price received by sellers will not change. 
B)  not change, and the price received by sellers will decrease. 
C)  decrease, and the price received by sellers will not change. 
D)  decrease, and the price received by sellers will decrease.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)  increases a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  decreases a tax on the good sold in that market. 
D)  None of the above is correct. 
A)  increases a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  decreases a tax on the good sold in that market. 
D)  None of the above is correct.

Question 5

Table 6-3
The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market.
  
-Refer to Table 6-3.Following the imposition of a price floor $2 above the equilibrium price,irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor.The resulting shortage is

Accepted Answer

A)  0 units. 
B)  2 units. 
C)  5 units. 
D)  7 units. 
A)  0 units. 
B)  2 units. 
C)  5 units. 
D)  7 units.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Suppose that in a particular market,the supply curve is highly elastic and the demand curve is highly inelastic.If a tax is imposed in this market,then the

Accepted Answer

A)  buyers will bear a greater burden of the tax than the sellers. 
B)  sellers will bear a greater burden of the tax than the buyers. 
C)  buyers and sellers are likely to share the burden of the tax equally. 
D)  buyers and sellers will not share the burden equally, but it is impossible to determine who will bear the greater burden of the tax without more information. 
A)  buyers will bear a greater burden of the tax than the sellers. 
B)  sellers will bear a greater burden of the tax than the buyers. 
C)  buyers and sellers are likely to share the burden of the tax equally. 
D)  buyers and sellers will not share the burden equally, but it is impossible to determine who will bear the greater burden of the tax without more information.

Question 8

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

Accepted Answer

A)  more, and sellers receive more than they did before the tax. 
B)  more, and sellers receive less than they did before the tax. 
C)  less, and sellers receive more than they did before the tax. 
D)  less, and sellers receive less than they did before the tax. 
A)  more, and sellers receive more than they did before the tax. 
B)  more, and sellers receive less than they did before the tax. 
C)  less, and sellers receive more than they did before the tax. 
D)  less, and sellers receive less than they did before the tax.

Question 9

When a binding price floor is imposed on a market,

Accepted Answer

A)  price no longer serves as a rationing device. 
B)  the quantity supplied at the price floor exceeds the quantity that would have been supplied without the price floor. 
C)  only some sellers benefit. 
D)  All of the above are correct. 
A)  price no longer serves as a rationing device. 
B)  the quantity supplied at the price floor exceeds the quantity that would have been supplied without the price floor. 
C)  only some sellers benefit. 
D)  All of the above are correct.

Question 10

The imposition of a binding price floor on a market causes quantity demanded to be

Accepted Answer

A)  greater than quantity supplied. 
B)  less than quantity supplied. 
C)  equal to quantity supplied. 
D)  Both a) and b) are possible. 
A)  greater than quantity supplied. 
B)  less than quantity supplied. 
C)  equal to quantity supplied. 
D)  Both a) and b) are possible.

Question 11

If a tax is levied on the buyers of dog food,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 12

Figure 6-7
  
-Refer to Figure 6-7.Which of the following price controls would cause a surplus 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 13

Rent control

Accepted Answer

A)  is an example of a price ceiling. 
B)  leads to a larger shortage of apartments in the long run than in the short run. 
C)  leads to lower rents and, in the long run, to lower-quality housing. 
D)  All of the above are correct. 
A)  is an example of a price ceiling. 
B)  leads to a larger shortage of apartments in the long run than in the short run. 
C)  leads to lower rents and, in the long run, to lower-quality housing. 
D)  All of the above are correct.

Question 14

Figure 6-15
  
-Refer to Figure 6-15.Suppose a tax of $2 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

Accepted Answer

A)  $3 
B)  between $3 and $5 
C)  between $5 and $7 
D)  $7 
A)  $3 
B)  between $3 and $5 
C)  between $5 and $7 
D)  $7

Question 15

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

Accepted Answer

A)  $2 
B)  $3 
C)  $4 
D)  $6 
A)  $2 
B)  $3 
C)  $4 
D)  $6

Question 16

In the housing market,supply and demand are

Accepted Answer

A)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
B)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
C)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
D)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
A)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
B)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
C)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
D)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.

Question 17

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

Accepted Answer

A)  no shortage. 
B)  a shortage of 10 units. 
C)  a shortage of 20 units. 
D)  a shortage of 40 units. 
A)  no shortage. 
B)  a shortage of 10 units. 
C)  a shortage of 20 units. 
D)  a shortage of 40 units.

Question 18

Figure 6-20
  
-Refer to Figure 6-20.The price paid by buyers after the tax is imposed is

Accepted Answer

A)  $24. 
B)  $21. 
C)  $18. 
D)  $16. 
A)  $24. 
B)  $21. 
C)  $18. 
D)  $16.

Question 19

Figure 6-25

-Refer to Figure 6-25.In which market will the majority of the tax burden fall on sellers?

Accepted Answer

A)  market (a) 
B)  market (b) 
C)  market (c) 
D)  All of the above are correct. 
A)  market (a) 
B)  market (b) 
C)  market (c) 
D)  All of the above are correct.

Question 20

Rent control

Accepted Answer

A)  serves as an example of how a social problem can be alleviated or even solved by government policies. 
B)  serves as an example of a price ceiling. 
C)  is regarded by most economists as an efficient way of helping the poor. 
D)  is the most efficient way to allocate scarce housing resources. 
A)  serves as an example of how a social problem can be alleviated or even solved by government policies. 
B)  serves as an example of a price ceiling. 
C)  is regarded by most economists as an efficient way of helping the poor. 
D)  is the most efficient way to allocate scarce housing resources.

Exam 6: Supply, Demand, And Government Policies.

The quantity sold in a market will decrease if the government decreases a

If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars,then the price paid by buyers will

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

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

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

Suppose that in a particular market,the supply curve is highly elastic and the demand curve is highly inelastic.If a tax is imposed in this market,then the

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

When a binding price floor is imposed on a market,

The imposition of a binding price floor on a market causes quantity demanded to be

If a tax is levied on the buyers of dog food,then

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

Rent control

Figure 6-15 -Refer to Figure 6-15.Suppose a tax of $2 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

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

In the housing market,supply and demand are

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

Figure 6-20 -Refer to Figure 6-20.The price paid by buyers after the tax is imposed is

Figure 6-25 -Refer to Figure 6-25.In which market will the majority of the tax burden fall on sellers?

Rent control

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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