Question 1

If the minimum wage exceeds the equilibrium wage,then

Accepted Answer

A)  the quantity demanded of labor will exceed the quantity supplied. 
B)  the quantity supplied of labor will exceed the quantity demanded. 
C)  the minimum wage will not be binding. 
D)  there will be no unemployment. 
A)  the quantity demanded of labor will exceed the quantity supplied. 
B)  the quantity supplied of labor will exceed the quantity demanded. 
C)  the minimum wage will not be binding. 
D)  there will be no unemployment.

Question 2

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

Accepted Answer

A)  size of the market decreases. 
B)  effective price received by sellers decreases, and the price paid by buyers increases. 
C)  demand for the product decreases. 
D)  All of the above are correct. 
A)  size of the market decreases. 
B)  effective price received by sellers decreases, and the price paid by buyers increases. 
C)  demand for the product decreases. 
D)  All of the above are correct.

Question 3

Figure 6-21
  
-Refer to Figure 6-22.The burden of the tax on sellers is

Accepted Answer

A)  $1 per unit. 
B)  $1.50 per unit. 
C)  $2 per unit. 
D)  $3 per unit. 
A)  $1 per unit. 
B)  $1.50 per unit. 
C)  $2 per unit. 
D)  $3 per unit.

Question 4

A binding minimum wage creates unemployment.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not correct?

Accepted Answer

A)  Taxes levied on sellers and taxes levied on buyers are not equivalent. 
B)  A tax places a wedge between the price that buyers pay and the price that sellers receive. 
C)  The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers. 
D)  In the new after-tax equilibrium, buyers and sellers share the burden of the tax. 
A)  Taxes levied on sellers and taxes levied on buyers are not equivalent. 
B)  A tax places a wedge between the price that buyers pay and the price that sellers receive. 
C)  The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers. 
D)  In the new after-tax equilibrium, buyers and sellers share the burden of the tax.

Question 6

A binding minimum wage may not help all workers,but it does not hurt any workers.

Accepted Answer

A) True 
 B)False

Question 7

Figure 6-26
  
-Refer to Figure 6-26.A price floor set at $60 would create a surplus of 20 units.

Accepted Answer

A) True 
 B)False

Question 8

If the government levies a $1,000 tax per boat on sellers of boats,then the price paid by buyers of boats would

Accepted Answer

A)  increase by more than $1,000. 
B)  increase by exactly $1,000. 
C)  increase by less than $1,000. 
D)  decrease by an indeterminate amount. 
A)  increase by more than $1,000. 
B)  increase by exactly $1,000. 
C)  increase by less than $1,000. 
D)  decrease by an indeterminate amount.

Question 9

Figure 6-7
  
-Refer to Figure 6-7.Suppose a price floor of $7 is imposed on this market.As a result,

Accepted Answer

A)  buyers' total expenditure on the good decreases by $20. 
B)  the supply curve shifts to the left so as to now pass through the point (quantity = 40, price = $7). 
C)  the quantity of the good demanded decreases by 20 units. 
D)  the price of the good continues to serve as the rationing mechanism. 
A)  buyers' total expenditure on the good decreases by $20. 
B)  the supply curve shifts to the left so as to now pass through the point (quantity = 40, price = $7). 
C)  the quantity of the good demanded decreases by 20 units. 
D)  the price of the good continues to serve as the rationing mechanism.

Question 10

The federal government uses the revenue from the FICA (Federal Insurance Contribution Act)tax to pay for

Accepted Answer

A)  unemployment compensation. 
B)  the salaries of members of Congress. 
C)  Social Security and Medicare. 
D)  housing subsidies for low-income people. 
A)  unemployment compensation. 
B)  the salaries of members of Congress. 
C)  Social Security and Medicare. 
D)  housing subsidies for low-income people.

Question 11

When OPEC raised the price of crude oil in the 1970s,it caused the

Accepted Answer

A)  demand for gasoline to increase. 
B)  demand for gasoline to decrease. 
C)  supply of gasoline to increase. 
D)  supply of gasoline to decrease. 
A)  demand for gasoline to increase. 
B)  demand for gasoline to decrease. 
C)  supply of gasoline to increase. 
D)  supply of gasoline to decrease.

Question 12

A price floor set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 13

If the government removes a $1 tax on sellers of gasoline and imposes the same $1 tax on buyers of gasoline,then the price paid by buyers will

Accepted Answer

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

Question 14

Table 6-2
  
-Refer to Table 6-2.A price floor set at $20 will

Accepted Answer

A)  be binding and will result in a surplus of 50 units. 
B)  be binding and will result in a surplus of 100 units. 
C)  be binding and will result in a surplus of 250 units. 
D)  not be binding. 
A)  be binding and will result in a surplus of 50 units. 
B)  be binding and will result in a surplus of 100 units. 
C)  be binding and will result in a surplus of 250 units. 
D)  not be binding.

Question 15

A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

Accepted Answer

A) True 
 B)False

Question 16

If the government removes a binding price floor from a market,then the price received by sellers will

Accepted Answer

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

Question 17

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

Accepted Answer

A) True 
 B)False

Question 18

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour,then a shortage of labor will exist.

Accepted Answer

A) True 
 B)False

Question 19

Over time,housing shortages caused by rent control

Accepted Answer

A)  increase, because the demand for and supply of housing are less elastic in the long run. 
B)  increase, because the demand for and supply of housing are more elastic in the long run. 
C)  decrease, because the demand for and supply of housing are less elastic in the long run. 
D)  decrease, because the demand for and supply of housing are more elastic in the long run. 
A)  increase, because the demand for and supply of housing are less elastic in the long run. 
B)  increase, because the demand for and supply of housing are more elastic in the long run. 
C)  decrease, because the demand for and supply of housing are less elastic in the long run. 
D)  decrease, because the demand for and supply of housing are more elastic in the long run.

Question 20

The goal of the minimum wage is to ensure workers a minimally adequate standard of living.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, And Government Policies.

If the minimum wage exceeds the equilibrium wage,then

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

Figure 6-21 -Refer to Figure 6-22.The burden of the tax on sellers is

A binding minimum wage creates unemployment.

Which of the following is not correct?

A binding minimum wage may not help all workers,but it does not hurt any workers.

Figure 6-26 -Refer to Figure 6-26.A price floor set at $60 would create a surplus of 20 units.

If the government levies a $1,000 tax per boat on sellers of boats,then the price paid by buyers of boats would

Figure 6-7 -Refer to Figure 6-7.Suppose a price floor of $7 is imposed on this market.As a result,

The federal government uses the revenue from the FICA (Federal Insurance Contribution Act)tax to pay for

When OPEC raised the price of crude oil in the 1970s,it caused the

A price floor set above the equilibrium price is not binding.

If the government removes a $1 tax on sellers of gasoline and imposes the same $1 tax on buyers of gasoline,then the price paid by buyers will

Table 6-2 -Refer to Table 6-2.A price floor set at $20 will

A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

If the government removes a binding price floor from a market,then the price received by sellers will

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour,then a shortage of labor will exist.

Over time,housing shortages caused by rent control

The goal of the minimum wage is to ensure workers a minimally adequate standard of living.

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