Question 1

Which of the following would be the least likely result of a binding price ceiling imposed on the market for rental cars?

Accepted Answer

A)  an accumulation of dirt in the interior of rental cars 
B)  poor engine maintenance in rental cars 
C)  free gasoline given to people as an incentive to a rent a car 
D)  slow replacement of old rental cars with newer ones 
A)  an accumulation of dirt in the interior of rental cars 
B)  poor engine maintenance in rental cars 
C)  free gasoline given to people as an incentive to a rent a car 
D)  slow replacement of old rental cars with newer ones

Question 2

Suppose that in a particular market,the demand curve is highly elastic,and the supply 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 3

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

Accepted Answer

A) True 
 B)False

Question 4

A price ceiling will be binding only if it is set

Accepted Answer

A)  equal to the equilibrium price. 
B)  above the equilibrium price. 
C)  below the equilibrium price. 
D)  either above or below the equilibrium price. 
A)  equal to the equilibrium price. 
B)  above the equilibrium price. 
C)  below the equilibrium price. 
D)  either above or below the equilibrium price.

Question 5

Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms.Labor economists believe that

Accepted Answer

A)  lawmakers may have actually achieved their goal because statistics show that the tax burden is currently equally divided. 
B)  the tax raises too little revenue for the government, so it should be eliminated. 
C)  firms bear most of the burden of the tax. 
D)  workers bear most of the burden of the tax. 
A)  lawmakers may have actually achieved their goal because statistics show that the tax burden is currently equally divided. 
B)  the tax raises too little revenue for the government, so it should be eliminated. 
C)  firms bear most of the burden of the tax. 
D)  workers bear most of the burden of the tax.

Question 6

Figure 6-24
Suppose the government imposes a $2 on this market.
  
-Refer to Figure 6-24.Suppose D1 represents the demand curve for paperback novels,D2 represents the demand curve for gasoline,and S1 represents the supply curve for paperback novels and gasoline.After the imposition of the $2 on paperback novels and on gasoline,the

Accepted Answer

A)  buyers of gasoline bear a higher burden of the $2 tax than buyers of paperback novels. 
B)  sellers of gasoline bear a higher burden of the $2 tax than sellers of paperback novels. 
C)  buyers of gasoline bear an equal burden of the $2 tax as buyers of paperback novels. 
D)  Both a) and b) are correct. 
A)  buyers of gasoline bear a higher burden of the $2 tax than buyers of paperback novels. 
B)  sellers of gasoline bear a higher burden of the $2 tax than sellers of paperback novels. 
C)  buyers of gasoline bear an equal burden of the $2 tax as buyers of paperback novels. 
D)  Both a) and b) are correct.

Question 7

The economy contains many labor markets for different types of workers.

Accepted Answer

A) True 
 B)False

Question 8

The minimum wage,if it is binding,lowers the incomes of

Accepted Answer

A)  no workers. 
B)  only those workers who become unemployed. 
C)  only those workers who have jobs. 
D)  all workers. 
A)  no workers. 
B)  only those workers who become unemployed. 
C)  only those workers who have jobs. 
D)  all workers.

Question 9

Figure 6-2
  
-Refer to Figure 6-2.The price ceiling

Accepted Answer

A)  is binding. 
B)  causes a shortage. 
C)  causes the quantity demanded to exceed the quantity supplied. 
D)  All of the above are correct. 
A)  is binding. 
B)  causes a shortage. 
C)  causes the quantity demanded to exceed the quantity supplied. 
D)  All of the above are correct.

Question 10

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 11

A tax burden falls more heavily on the side of the market that

Accepted Answer

A)  has a fewer number of participants. 
B)  is more inelastic. 
C)  is closer to unit elastic. 
D)  is less inelastic. 
A)  has a fewer number of participants. 
B)  is more inelastic. 
C)  is closer to unit elastic. 
D)  is less inelastic.

Question 12

When a tax is placed on the buyers 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 13

A tax on sellers shifts the supply curve to the left.

Accepted Answer

A) True 
 B)False

Question 14

When a tax is placed on the buyers of tennis racquets,the size of the tennis racquet market

Accepted Answer

A)  and the price paid by buyers both decrease. 
B)  decreases, but the price paid by buyers increases. 
C)  increases, but the price paid by buyers decreases. 
D)  and the price paid by buyers both increase. 
A)  and the price paid by buyers both decrease. 
B)  decreases, but the price paid by buyers increases. 
C)  increases, but the price paid by buyers decreases. 
D)  and the price paid by buyers both increase.

Question 15

Figure 6-8
  
-Refer to Figure 6-8.If the government imposes a price floor of $5 on this market,then there will be

Accepted Answer

A)  no surplus of the good. 
B)  a surplus of 20 units of the good. 
C)  a surplus of 30 units of the good. 
D)  a surplus of 55 units of the good. 
A)  no surplus of the good. 
B)  a surplus of 20 units of the good. 
C)  a surplus of 30 units of the good. 
D)  a surplus of 55 units of the good.

Question 16

A tax on the buyers of sofas

Accepted Answer

A)  increases the size of the sofa market. 
B)  decreases the size of the sofa market. 
C)  has no effect on the size of the sofa market. 
D)  may increase, decrease, or have no effect on the size of the sofa market. 
A)  increases the size of the sofa market. 
B)  decreases the size of the sofa market. 
C)  has no effect on the size of the sofa market. 
D)  may increase, decrease, or have no effect on the size of the sofa market.

Question 17

Which of the following is correct?

Accepted Answer

A)  Workers determine the supply of labor, and firms determine the demand for labor. 
B)  Workers determine the demand for labor, and firms determine the supply of labor. 
C)  The labor market is a single market for all different types of workers. 
D)  The price of the product produced by labor adjusts to balance the supply of labor and the demand for labor. 
A)  Workers determine the supply of labor, and firms determine the demand for labor. 
B)  Workers determine the demand for labor, and firms determine the supply of labor. 
C)  The labor market is a single market for all different types of workers. 
D)  The price of the product produced by labor adjusts to balance the supply of labor and the demand for labor.

Which of the following would be the least likely result of a binding price ceiling imposed on the market for rental cars?

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

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

A price ceiling will be binding only if it is set

Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms.Labor economists believe that

The economy contains many labor markets for different types of workers.

The minimum wage,if it is binding,lowers the incomes of

Figure 6-2 -Refer to Figure 6-2.The price ceiling

A price ceiling is a legal minimum on the price at which a good or service can be sold.

A tax burden falls more heavily on the side of the market that

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

A tax on sellers shifts the supply curve to the left.

When a tax is placed on the buyers of tennis racquets,the size of the tennis racquet market

Figure 6-8 -Refer to Figure 6-8.If the government imposes a price floor of $5 on this market,then there will be

A tax on the buyers of sofas

Which of the following is 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.

Filters

Exam 6: Supply, Demand, And Government Policies.

Which of the following would be the least likely result of a binding price ceiling imposed on the market for rental cars?

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

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

A price ceiling will be binding only if it is set

Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms.Labor economists believe that

The economy contains many labor markets for different types of workers.

The minimum wage,if it is binding,lowers the incomes of

Figure 6-2 -Refer to Figure 6-2.The price ceiling

A price ceiling is a legal minimum on the price at which a good or service can be sold.

A tax burden falls more heavily on the side of the market that

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

A tax on sellers shifts the supply curve to the left.

When a tax is placed on the buyers of tennis racquets,the size of the tennis racquet market

Figure 6-8 -Refer to Figure 6-8.If the government imposes a price floor of $5 on this market,then there will be

A tax on the buyers of sofas

Which of the following is 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.

Filters