Question 1

If the government wants to reduce the burning of fossil fuels,it should impose a tax on

Accepted Answer

A)  buyers of gasoline. 
B)  sellers of gasoline. 
C)  either buyers or sellers of gasoline. 
D)  whichever side of the market is less elastic. 
A)  buyers of gasoline. 
B)  sellers of gasoline. 
C)  either buyers or sellers of gasoline. 
D)  whichever side of the market is less elastic.

Question 2

If a price floor is not binding,then

Accepted Answer

A)  the equilibrium price is above the price floor. 
B)  the equilibrium price is below the price floor. 
C)  there will be a surplus in the market. 
D)  Both a) and c) are correct. 
A)  the equilibrium price is above the price floor. 
B)  the equilibrium price is below the price floor. 
C)  there will be a surplus in the market. 
D)  Both a) and c) are correct.

Question 3

To say that a price floor is binding is to say that the price floor

Accepted Answer

A)  results in a shortage. 
B)  is set below the equilibrium price. 
C)  causes quantity supplied to exceed quantity demanded. 
D)  All of the above are correct. 
A)  results in a shortage. 
B)  is set below the equilibrium price. 
C)  causes quantity supplied to exceed quantity demanded. 
D)  All of the above are correct.

Question 4

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

Accepted Answer

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

Question 5

Minimum-wage laws benefit society by creating a surplus of labor.

Accepted Answer

A) True 
 B)False

Question 6

Minimum-wage laws dictate the

Accepted Answer

A)  average price employers must pay for labor. 
B)  highest price employers may pay for labor. 
C)  lowest price employers may pay for labor. 
D)  the highest and lowest prices employers may pay for labor. 
A)  average price employers must pay for labor. 
B)  highest price employers may pay for labor. 
C)  lowest price employers may pay for labor. 
D)  the highest and lowest prices employers may pay for labor.

Question 7

Figure 6-27
  
-Refer to Figure 6-27.If the government places a $2 tax in the market,the buyer bears $1 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 8

Price controls

Accepted Answer

A)  always produce a fair outcome. 
B)  always produce an efficient outcome. 
C)  can generate inequities of their own. 
D)  All of the above are correct. 
A)  always produce a fair outcome. 
B)  always produce an efficient outcome. 
C)  can generate inequities of their own. 
D)  All of the above are correct.

Question 9

One common example of a price floor is the minimum wage.

Accepted Answer

A) True 
 B)False

Question 10

Figure 6-1

-Refer to Figure 6-1.A binding price ceiling is shown in

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 11

When a free market for a good reaches equilibrium,anyone who is willing and able to pay the market price can buy the good.

Accepted Answer

A) True 
 B)False

Question 12

Figure 6-27
  
-Refer to Figure 6-27.If the government places a $2 tax in the market,the seller receives $4.

Accepted Answer

A) True 
 B)False

Question 13

Price floors are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 14

The price paid by buyers 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)  All of the above are 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)  All of the above are correct.

Question 15

When a tax is imposed on a good,the result is always a shortage of the good.

Accepted Answer

A) True 
 B)False

Question 16

Rent control policies tend to cause

Accepted Answer

A)  relatively smaller shortages in the short run than in the long run because supply and demand tend to be more elastic in the short run than in the long run. 
B)  relatively larger shortages in the short run than in the long run because supply and demand tend to be more elastic in the short run than in the long run. 
C)  relatively larger shortages in the short run than in the long run because supply and demand tend to be more inelastic in the short run than in the long run. 
D)  relatively smaller shortages in the short run than in the long run because supply and demand tend to be more inelastic in the short run than in the long run. 
A)  relatively smaller shortages in the short run than in the long run because supply and demand tend to be more elastic in the short run than in the long run. 
B)  relatively larger shortages in the short run than in the long run because supply and demand tend to be more elastic in the short run than in the long run. 
C)  relatively larger shortages in the short run than in the long run because supply and demand tend to be more inelastic in the short run than in the long run. 
D)  relatively smaller shortages in the short run than in the long run because supply and demand tend to be more inelastic in the short run than in the long run.

Question 17

A tax on buyers will shift the

Accepted Answer

A)  demand curve upward by the amount of the tax. 
B)  demand curve downward by the amount of the tax. 
C)  supply curve upward by the amount of the tax. 
D)  supply curve downward by the amount of the tax. 
A)  demand curve upward by the amount of the tax. 
B)  demand curve downward by the amount of the tax. 
C)  supply curve upward by the amount of the tax. 
D)  supply curve downward by the amount of the tax.

Question 18

A tax imposed on the sellers 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 19

When a payroll tax is enacted,the wage received by workers

Accepted Answer

A)  falls, and the wage paid by firms rises. 
B)  falls, and the wage paid by firms falls. 
C)  rises, and the wage paid by firms falls. 
D)  rises, and the wage paid by firms rises. 
A)  falls, and the wage paid by firms rises. 
B)  falls, and the wage paid by firms falls. 
C)  rises, and the wage paid by firms falls. 
D)  rises, and the wage paid by firms rises.

Question 20

Figure 6-6
  
-Refer to Figure 6-6.Which of the following statements is not correct?

Accepted Answer

A)  A price ceiling set at $8 would be binding, but a price ceiling set at $12 would not be binding. 
B)  A price floor set at $14 would be binding, but a price floor set at $8 would not be binding. 
C)  A price ceiling set at $9 would result in a surplus. 
D)  A price floor set at $11 would result in a surplus. 
A)  A price ceiling set at $8 would be binding, but a price ceiling set at $12 would not be binding. 
B)  A price floor set at $14 would be binding, but a price floor set at $8 would not be binding. 
C)  A price ceiling set at $9 would result in a surplus. 
D)  A price floor set at $11 would result in a surplus.

Exam 6: Supply, Demand, And Government Policies.

If the government wants to reduce the burning of fossil fuels,it should impose a tax on

If a price floor is not binding,then

To say that a price floor is binding is to say that the price floor

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

Minimum-wage laws benefit society by creating a surplus of labor.

Minimum-wage laws dictate the

Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the buyer bears $1 of the tax burden.

Price controls

One common example of a price floor is the minimum wage.

Figure 6-1 -Refer to Figure 6-1.A binding price ceiling is shown in

When a free market for a good reaches equilibrium,anyone who is willing and able to pay the market price can buy the good.

Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the seller receives $4.

Price floors are typically imposed to benefit sellers.

The price paid by buyers in a market will decrease if the government

When a tax is imposed on a good,the result is always a shortage of the good.

Rent control policies tend to cause

A tax on buyers will shift the

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

When a payroll tax is enacted,the wage received by workers

Figure 6-6 -Refer to Figure 6-6.Which of the following statements is not 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.

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