Question 1

When a binding price floor is imposed on a market to benefit sellers,

Accepted Answer

A)  every seller in the market benefits. 
B)  all buyers and sellers benefit. 
C)  every seller who wants to sell the good will be able to do so, but only if he appeals to the personal biases of the buyers. 
D)  some sellers will not be able to sell any amount of the good. 
A)  every seller in the market benefits. 
B)  all buyers and sellers benefit. 
C)  every seller who wants to sell the good will be able to do so, but only if he appeals to the personal biases of the buyers. 
D)  some sellers will not be able to sell any amount of the good.

Question 2

An outcome that can result from either a price ceiling or a price floor is

Accepted Answer

A)  a surplus in the market. 
B)  a shortage in the market. 
C)  a nonbinding price control. 
D)  long lines of frustrated buyers. 
A)  a surplus in the market. 
B)  a shortage in the market. 
C)  a nonbinding price control. 
D)  long lines of frustrated buyers.

Question 3

The mayor of Workerville proposes a local payroll tax to fund a new water park for the city.The mayor proposes to collect half the tax from workers and half the tax from firms.The mayor will be able to successfully divide the burden of the tax equally if the

Accepted Answer

A)  demand for labor is more elastic than the supply of labor. 
B)  supply of labor is more elastic than the demand for labor. 
C)  demand for labor and supply of labor are equally elastic. 
D)  It is not possible for the tax burden to fall equally on firms and workers. 
A)  demand for labor is more elastic than the supply of labor. 
B)  supply of labor is more elastic than the demand for labor. 
C)  demand for labor and supply of labor are equally elastic. 
D)  It is not possible for the tax burden to fall equally on firms and workers.

Question 4

Since half of the FICA tax is paid by firms and the other half is paid by workers,the burden of the tax must fall equally on firms and workers.

Accepted Answer

A) True 
 B)False

Question 5

States in the U.S.may mandate minimum wages above the federal level.

Accepted Answer

A) True 
 B)False

Question 6

Figure 6-26
  
-Refer to Figure 6-26.A price floor set at $40 would create a surplus of 20 units.

Accepted Answer

A) True 
 B)False

Question 7

Figure 6-15
  
-Refer to Figure 6-15.Suppose a tax of $2 per unit is imposed on this market.How much will buyers pay 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 8

Figure 6-3

-Refer to Figure 6-3.A binding price floor is shown in

Accepted Answer

A)  both panel (a) and panel (b). 
B)  panel (a) only. 
C)  panel (b) only. 
D)  neither panel (a) nor panel (b). 
A)  both panel (a) and panel (b). 
B)  panel (a) only. 
C)  panel (b) only. 
D)  neither panel (a) nor panel (b).

Question 9

Which of the following is correct?

Accepted Answer

A)  Rent control and the minimum wage are both examples of price ceilings. 
B)  Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor. 
C)  Rent control is an example of a price floor, and the minimum wage is an example of a price ceiling. 
D)  Rent control and the minimum wage are both examples of price floors. 
A)  Rent control and the minimum wage are both examples of price ceilings. 
B)  Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor. 
C)  Rent control is an example of a price floor, and the minimum wage is an example of a price ceiling. 
D)  Rent control and the minimum wage are both examples of price floors.

Question 10

Table 6-1
  
-Refer to Table 6-1.Which of the following price floors would be binding in this market?

Accepted Answer

A)  $1 
B)  $2 
C)  $3 
D)  $4 
A)  $1 
B)  $2 
C)  $3 
D)  $4

Question 11

Suppose that the demand for digital cameras is elastic,and the supply of digital cameras is inelastic.A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

Accepted Answer

A)  less than $10. 
B)  $10. 
C)  between $10 and $20. 
D)  $20. 
A)  less than $10. 
B)  $10. 
C)  between $10 and $20. 
D)  $20.

Question 12

Figure 6-6
  
-Refer to Figure 6-6.If the government imposes a price ceiling of $12 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 13

Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-4
  
-Refer to Figure 6-4.A government-imposed price of $6 in this market is an example of a

Accepted Answer

A)  binding price ceiling that creates a shortage. 
B)  non-binding price ceiling that creates a shortage. 
C)  binding price floor that creates a surplus. 
D)  non-binding price floor that creates a surplus. 
A)  binding price ceiling that creates a shortage. 
B)  non-binding price ceiling that creates a shortage. 
C)  binding price floor that creates a surplus. 
D)  non-binding price floor that creates a surplus.

Question 15

The minimum wage was instituted to ensure workers

Accepted Answer

A)  a middle-class standard of living. 
B)  employment. 
C)  a minimally adequate standard of living. 
D)  unemployment compensation. 
A)  a middle-class standard of living. 
B)  employment. 
C)  a minimally adequate standard of living. 
D)  unemployment compensation.

Question 16

When policymakers set prices by legal decree,they obscure the signals that normally guide the allocation of society's resources.

Accepted Answer

A) True 
 B)False

Question 17

Figure 6-4
  
-Refer to Figure 6-4.A government-imposed price of $12 in this market is an example of a

Accepted Answer

A)  binding price ceiling that creates a shortage. 
B)  non-binding price ceiling that creates a shortage. 
C)  binding price floor that creates a surplus. 
D)  non-binding price floor that creates a surplus. 
A)  binding price ceiling that creates a shortage. 
B)  non-binding price ceiling that creates a shortage. 
C)  binding price floor that creates a surplus. 
D)  non-binding price floor that creates a surplus.

Question 18

Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?

Accepted Answer

A)  Policymakers have studied the effects of the price ceiling carefully, and they recognize that the price ceiling is advantageous for society as a whole. 
B)  Buyers of milk, recognizing that the price ceiling is good for them, have pressured policymakers into imposing the price ceiling. 
C)  Sellers of milk, recognizing that the price ceiling is good for them, have pressured policymakers into imposing the price ceiling. 
D)  Buyers and sellers of milk have agreed that the price ceiling is good for both of them and have therefore pressured policymakers into imposing the price ceiling. 
A)  Policymakers have studied the effects of the price ceiling carefully, and they recognize that the price ceiling is advantageous for society as a whole. 
B)  Buyers of milk, recognizing that the price ceiling is good for them, have pressured policymakers into imposing the price ceiling. 
C)  Sellers of milk, recognizing that the price ceiling is good for them, have pressured policymakers into imposing the price ceiling. 
D)  Buyers and sellers of milk have agreed that the price ceiling is good for both of them and have therefore pressured policymakers into imposing the price ceiling.

Question 19

Figure 6-25

-Refer to Figure 6-25.In which market will the tax burden be most equally divided between buyers and 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

Price ceilings are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, And Government Policies.

When a binding price floor is imposed on a market to benefit sellers,

An outcome that can result from either a price ceiling or a price floor is

The mayor of Workerville proposes a local payroll tax to fund a new water park for the city.The mayor proposes to collect half the tax from workers and half the tax from firms.The mayor will be able to successfully divide the burden of the tax equally if the

Since half of the FICA tax is paid by firms and the other half is paid by workers,the burden of the tax must fall equally on firms and workers.

States in the U.S.may mandate minimum wages above the federal level.

Figure 6-26 -Refer to Figure 6-26.A price floor set at $40 would create a surplus of 20 units.

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

Figure 6-3 -Refer to Figure 6-3.A binding price floor is shown in

Which of the following is correct?

Table 6-1 -Refer to Table 6-1.Which of the following price floors would be binding in this market?

Suppose that the demand for digital cameras is elastic,and the supply of digital cameras is inelastic.A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

Figure 6-6 -Refer to Figure 6-6.If the government imposes a price ceiling of $12 on this market,then there will be

Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $6 in this market is an example of a

The minimum wage was instituted to ensure workers

When policymakers set prices by legal decree,they obscure the signals that normally guide the allocation of society's resources.

Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $12 in this market is an example of a

Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?

Figure 6-25 -Refer to Figure 6-25.In which market will the tax burden be most equally divided between buyers and sellers?

Price ceilings are typically imposed to benefit sellers.

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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