Question 1

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

Accepted Answer

A)  binding price floor in that market. 
B)  binding price ceiling in that market. 
C)  tax on the good sold in that market. 
D)  None of the above is correct. 
A)  binding price floor in that market. 
B)  binding price ceiling in that market. 
C)  tax on the good sold in that market. 
D)  None of the above is correct.

Question 2

Price is the rationing mechanism in a free,competitive market.

Accepted Answer

A) True 
 B)False

Question 3

Buyers and sellers always share the burden of a tax equally.

Accepted Answer

A) True 
 B)False

Question 4

At the equilibrium price,the quantity that buyers want to buy exactly equals the quantity that sellers want to sell.

Accepted Answer

A) True 
 B)False

Question 5

A minimum wage that is set below a market's equilibrium wage will result in an excess

Accepted Answer

A)  demand for labor, that is, unemployment. 
B)  demand for labor, that is, a shortage of workers. 
C)  supply of labor, that is, unemployment. 
D)  None of the above is correct. 
A)  demand for labor, that is, unemployment. 
B)  demand for labor, that is, a shortage of workers. 
C)  supply of labor, that is, unemployment. 
D)  None of the above is correct.

Question 6

The burden of a luxury tax falls

Accepted Answer

A)  more on the rich than on the middle class. 
B)  more on the poor than on the rich. 
C)  more on the middle class than on the rich. 
D)  equally on the rich, the middle class, and the poor. 
A)  more on the rich than on the middle class. 
B)  more on the poor than on the rich. 
C)  more on the middle class than on the rich. 
D)  equally on the rich, the middle class, and the poor.

Question 7

The proportion of minimum-wage earners who are in families with incomes below the poverty line is

Accepted Answer

A)  less than one-third. 
B)  between one-third and one-half. 
C)  between one-half and two-thirds. 
D)  greater than two-thirds. 
A)  less than one-third. 
B)  between one-third and one-half. 
C)  between one-half and two-thirds. 
D)  greater than two-thirds.

Question 8

A tax on sellers increases supply.

Accepted Answer

A) True 
 B)False

Question 9

Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Accepted Answer

A) True 
 B)False

Question 10

Figure 6-17
  
-Refer to Figure 6-17.The price that buyers pay after the tax is imposed is

Accepted Answer

A)  $8.00. 
B)  $9.00. 
C)  $10.50. 
D)  $12.00. 
A)  $8.00. 
B)  $9.00. 
C)  $10.50. 
D)  $12.00.

Question 11

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

Accepted Answer

A)  a smaller quantity of the good is bought and sold. 
B)  a smaller quantity of the good is demanded. 
C)  a larger quantity of the good is supplied. 
D)  the price rises above the previous equilibrium. 
A)  a smaller quantity of the good is bought and sold. 
B)  a smaller quantity of the good is demanded. 
C)  a larger quantity of the good is supplied. 
D)  the price rises above the previous equilibrium.

Question 12

The burden of a luxury tax most likely falls more heavily on sellers because demand is more elastic and supply is more inelastic.

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-19
  
-Refer to Figure 6-19.The effective price received by sellers after the tax is imposed is

Accepted Answer

A)  $3. 
B)  $4. 
C)  $5. 
D)  $7. 
A)  $3. 
B)  $4. 
C)  $5. 
D)  $7.

Question 14

Figure 6-25

-Refer to Figure 6-25.In which market will the majority of the tax burden fall on buyers?

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 15

Figure 6-1

-Refer to Figure 6-1.The price ceiling shown in panel (a)

Accepted Answer

A)  is not binding. 
B)  creates a surplus. 
C)  creates a shortage. 
D)  Both a) and b) are correct. 
A)  is not binding. 
B)  creates a surplus. 
C)  creates a shortage. 
D)  Both a) and b) are correct.

Question 16

Figure 6-6
  
-Refer to Figure 6-6.In which of the following cases would sellers have to develop a rationing mechanism?

Accepted Answer

A)  a price ceiling set at $8 
B)  a price ceiling set at $12 
C)  a price floor set at $8 
D)  a price floor set at $12 
A)  a price ceiling set at $8 
B)  a price ceiling set at $12 
C)  a price floor set at $8 
D)  a price floor set at $12

Question 17

If the government levies a $2 tax per DVD on buyers of DVDs,then the price received by sellers of DVDs would

Accepted Answer

A)  decrease by more than $2. 
B)  decrease by exactly $2. 
C)  decrease by less than $2. 
D)  increase by an indeterminate amount. 
A)  decrease by more than $2. 
B)  decrease by exactly $2. 
C)  decrease by less than $2. 
D)  increase by an indeterminate amount.

Question 18

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

Accepted Answer

A)  no workers. 
B)  only those workers who cannot find jobs. 
C)  only those workers whose jobs would pay less than the minimum wage if it didn't exist. 
D)  all workers. 
A)  no workers. 
B)  only those workers who cannot find jobs. 
C)  only those workers whose jobs would pay less than the minimum wage if it didn't exist. 
D)  all workers.

Question 19

If a price floor is not binding,then

Accepted Answer

A)  there will be a surplus in the market. 
B)  there will be a shortage in the market. 
C)  there will be no effect on the market price or quantity sold. 
D)  the market will be less efficient than it would be without the price floor. 
A)  there will be a surplus in the market. 
B)  there will be a shortage in the market. 
C)  there will be no effect on the market price or quantity sold. 
D)  the market will be less efficient than it would be without the price floor.

Question 20

The impact of the minimum wage depends on the skill and experience of the worker.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, And Government Policies.

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

Price is the rationing mechanism in a free,competitive market.

Buyers and sellers always share the burden of a tax equally.

At the equilibrium price,the quantity that buyers want to buy exactly equals the quantity that sellers want to sell.

A minimum wage that is set below a market's equilibrium wage will result in an excess

The burden of a luxury tax falls

The proportion of minimum-wage earners who are in families with incomes below the poverty line is

A tax on sellers increases supply.

Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Figure 6-17 -Refer to Figure 6-17.The price that buyers pay after the tax is imposed is

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

The burden of a luxury tax most likely falls more heavily on sellers because demand is more elastic and supply is more inelastic.

Figure 6-19 -Refer to Figure 6-19.The effective price received by sellers after the tax is imposed is

Figure 6-25 -Refer to Figure 6-25.In which market will the majority of the tax burden fall on buyers?

Figure 6-1 -Refer to Figure 6-1.The price ceiling shown in panel (a)

Figure 6-6 -Refer to Figure 6-6.In which of the following cases would sellers have to develop a rationing mechanism?

If the government levies a $2 tax per DVD on buyers of DVDs,then the price received by sellers of DVDs would

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

If a price floor is not binding,then

The impact of the minimum wage depends on the skill and experience of the worker.

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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