Question 1

If a price floor is a binding constraint on a market,then

Accepted Answer

A)  the equilibrium price must be above the price floor. 
B)  the quantity demanded must exceed the quantity supplied. 
C)  sellers cannot sell all they want to sell at the price floor. 
D)  buyers cannot buy all they want to buy at the price floor. 
A)  the equilibrium price must be above the price floor. 
B)  the quantity demanded must exceed the quantity supplied. 
C)  sellers cannot sell all they want to sell at the price floor. 
D)  buyers cannot buy all they want to buy at the price floor.

Question 2

If a price ceiling is not binding,then it will have no effect on the market.

Accepted Answer

A) True 
 B)False

Question 3

The United States is the only country in the world with minimum-wage laws.

Accepted Answer

A) True 
 B)False

Question 4

Figure 6-18
  
-Refer to Figure 6-18.Buyers pay how much of the tax per unit?

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 5

Suppose the government imposes a 20-cent tax on the sellers of iced tea.Which of the following is not correct? The tax would

Accepted Answer

A)  shift the supply curve upward by 20 cents. 
B)  raise the equilibrium price by 20 cents. 
C)  reduce the equilibrium quantity. 
D)  discourage market activity. 
A)  shift the supply curve upward by 20 cents. 
B)  raise the equilibrium price by 20 cents. 
C)  reduce the equilibrium quantity. 
D)  discourage market activity.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

A tax on buyers shifts the demand curve and the supply curve.

Accepted Answer

A) True 
 B)False

Question 8

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Accepted Answer

A) True 
 B)False

Question 9

Figure 6-18
  
-Refer to Figure 6-18.The price paid by buyers after the tax is imposed is

Accepted Answer

A)  $2.50. 
B)  $3.50. 
C)  $5.00. 
D)  $6.00. 
A)  $2.50. 
B)  $3.50. 
C)  $5.00. 
D)  $6.00.

Question 10

Figure 6-12
  
-Refer to Figure 6-12.When the price ceiling applies in this market,and the supply curve for gasoline shifts from S₁ to S₂,

Accepted Answer

A)  the market price will increase to P3. 
B)  a surplus will occur at the new market price of P2. 
C)  the market price will stay at P1. 
D)  a shortage will occur at the new market price of P2. 
A)  the market price will increase to P3. 
B)  a surplus will occur at the new market price of P2. 
C)  the market price will stay at P1. 
D)  a shortage will occur at the new market price of P2.

Question 11

Suppose the equilibrium price of a physical examination ("physical")by a doctor is $200,and the government imposes a price ceiling of $150 per physical.As a result of the price ceiling,the

Accepted Answer

A)  demand curve for physicals shifts to the right. 
B)  supply curve for physicals shifts to the left. 
C)  quantity demanded of physicals increases, and the quantity supplied of physicals decreases. 
D)  number of physicals performed stays the same. 
A)  demand curve for physicals shifts to the right. 
B)  supply curve for physicals shifts to the left. 
C)  quantity demanded of physicals increases, and the quantity supplied of physicals decreases. 
D)  number of physicals performed stays the same.

Question 12

Figure 6-18
  
-Refer to Figure 6-18.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 graph. 
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 graph.

Question 13

If a tax is imposed on a market with inelastic supply and elastic demand,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 14

Figure 6-12
  
-Refer to Figure 6-12.When the price ceiling applies in this market,and the supply curve for gasoline shifts from S₁ to S₂,the resulting quantity of gasoline that is bought and sold is

Accepted Answer

A)  less than Q3. 
B)  Q3. 
C)  between Q1 and Q3. 
D)  at least Q1. 
A)  less than Q3. 
B)  Q3. 
C)  between Q1 and Q3. 
D)  at least Q1.

Question 15

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.How many units of the good are sold after the imposition of the price floor?

Accepted Answer

A)  5 
B)  9 
C)  10 
D)  15 
A)  5 
B)  9 
C)  10 
D)  15

Question 16

Which of the following is not correct?

Accepted Answer

A)  The economy contains many labor markets for different types of workers. 
B)  The impact of the minimum wage depends on the skill and experience of the worker. 
C)  The minimum wage is binding for workers with high skills and much experience. 
D)  The minimum wage is not binding when the equilibrium wage is above the minimum wage. 
A)  The economy contains many labor markets for different types of workers. 
B)  The impact of the minimum wage depends on the skill and experience of the worker. 
C)  The minimum wage is binding for workers with high skills and much experience. 
D)  The minimum wage is not binding when the equilibrium wage is above the minimum wage.

Question 17

Figure 6-20
  
-Refer to Figure 6-20.Suppose sellers,rather than buyers,were required to pay this tax (in the same amount per unit as shown in the graph).Relative to the tax on buyers,the tax on sellers would result in

Accepted Answer

A)  buyers bearing the same share of the tax burden. 
B)  sellers bearing the same share of the tax burden. 
C)  the same amount of tax revenue for the government. 
D)  All of the above are correct. 
A)  buyers bearing the same share of the tax burden. 
B)  sellers bearing the same share of the tax burden. 
C)  the same amount of tax revenue for the government. 
D)  All of the above are correct.

Question 18

If the government levies a $5 tax per ticket on buyers of NFL game tickets,then the price paid by buyers of NFL game tickets would

Accepted Answer

A)  increase by less than $5. 
B)  increase by exactly $5. 
C)  increase by more than $5. 
D)  decrease by an indeterminate amount. 
A)  increase by less than $5. 
B)  increase by exactly $5. 
C)  increase by more than $5. 
D)  decrease by an indeterminate amount.

Question 19

A price ceiling is binding when it is set

Accepted Answer

A)  above the equilibrium price, causing a shortage. 
B)  above the equilibrium price, causing a surplus. 
C)  below the equilibrium price, causing a shortage. 
D)  below the equilibrium price, causing a surplus. 
A)  above the equilibrium price, causing a shortage. 
B)  above the equilibrium price, causing a surplus. 
C)  below the equilibrium price, causing a shortage. 
D)  below the equilibrium price, causing a surplus.

Question 20

Suppose there is currently a tax of $50 per ticket on airline tickets.Sellers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $30 per ticket,then the

Accepted Answer

A)  demand curve will shift upward by $20, and the effective price received by sellers will increase by $20. 
B)  demand curve will shift upward by $20, and the effective price received by sellers will increase by less than $20. 
C)  supply curve will shift downward by $20, and the price paid by buyers will decrease by $20. 
D)  supply curve will shift downward by $20, and the price paid by buyers will decrease by less than $20. 
A)  demand curve will shift upward by $20, and the effective price received by sellers will increase by $20. 
B)  demand curve will shift upward by $20, and the effective price received by sellers will increase by less than $20. 
C)  supply curve will shift downward by $20, and the price paid by buyers will decrease by $20. 
D)  supply curve will shift downward by $20, and the price paid by buyers will decrease by less than $20.

Exam 6: Supply, Demand, And Government Policies.

If a price floor is a binding constraint on a market,then

If a price ceiling is not binding,then it will have no effect on the market.

The United States is the only country in the world with minimum-wage laws.

Figure 6-18 -Refer to Figure 6-18.Buyers pay how much of the tax per unit?

Suppose the government imposes a 20-cent tax on the sellers of iced tea.Which of the following is not correct? The tax would

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

A tax on buyers shifts the demand curve and the supply curve.

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Figure 6-18 -Refer to Figure 6-18.The price paid by buyers after the tax is imposed is

Figure 6-12 -Refer to Figure 6-12.When the price ceiling applies in this market,and the supply curve for gasoline shifts from S₁ to S₂,

Suppose the equilibrium price of a physical examination ("physical")by a doctor is $200,and the government imposes a price ceiling of $150 per physical.As a result of the price ceiling,the

Figure 6-18 -Refer to Figure 6-18.As the figure is drawn,who sends the tax payment to the government?

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

Figure 6-12 -Refer to Figure 6-12.When the price ceiling applies in this market,and the supply curve for gasoline shifts from S₁ to S₂,the resulting quantity of gasoline that is bought and sold is

Which of the following is not correct?

Figure 6-20 -Refer to Figure 6-20.Suppose sellers,rather than buyers,were required to pay this tax (in the same amount per unit as shown in the graph).Relative to the tax on buyers,the tax on sellers would result in

If the government levies a $5 tax per ticket on buyers of NFL game tickets,then the price paid by buyers of NFL game tickets would

A price ceiling is binding when it is set

Suppose there is currently a tax of $50 per ticket on airline tickets.Sellers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $30 per ticket,then the

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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