Question 1

Although lawmakers legislated a fifty-fifty division in the payment of the FICA tax,

Accepted Answer

A) the same outcome, in terms of tax incidence, would occur even if the entire tax had been levied on only the workers or only on the firms. 
B) the employer now is required by law to pay more than 50 percent of the tax. 
C) the employee now is required by law to pay more than 50 percent of the tax. 
D) employers are no longer required by law to pay any portion of the tax. 
A) the same outcome, in terms of tax incidence, would occur even if the entire tax had been levied on only the workers or only on the firms. 
B) the employer now is required by law to pay more than 50 percent of the tax. 
C) the employee now is required by law to pay more than 50 percent of the tax. 
D) employers are no longer required by law to pay any portion of the tax.

Question 2

Economists blame the long lines at gasoline stations in the U.S.in the 1970s on

Accepted Answer

A) U.S.government regulations pertaining to the price of gasoline. 
B) the Organization of Petroleum Exporting Countries (OPE
C) . 
C) major oil companies operating in the U.S. 
D) consumers who bought gasoline frequently, even when their cars' gasoline tanks were nearly full. 
A) U.S.government regulations pertaining to the price of gasoline. 
B) the Organization of Petroleum Exporting Countries (OPE
C) . 
C) major oil companies operating in the U.S. 
D) consumers who bought gasoline frequently, even when their cars' gasoline tanks were nearly full.

Question 3

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 4

When government imposes a price ceiling or a price floor in a market,

Accepted Answer

A) price no longer serves as a rationing device. 
B) efficiency in the market is enhanced. 
C) shortages and surpluses are eliminated. 
D) buyers and sellers both become better off. 
A) price no longer serves as a rationing device. 
B) efficiency in the market is enhanced. 
C) shortages and surpluses are eliminated. 
D) buyers and sellers both become better off.

Question 5

Other than OPEC,the shortage of gasoline in the U.S.in the 1970s could also be blamed on

Accepted Answer

A) a sharp increase in the demand for gasoline that was brought on by the Vietnam War. 
B) the government's policy of maintaining a price ceiling on gasoline. 
C) an indifference among U.S.consumers toward conservation. 
D) the lack of substitutes for crude oil. 
A) a sharp increase in the demand for gasoline that was brought on by the Vietnam War. 
B) the government's policy of maintaining a price ceiling on gasoline. 
C) an indifference among U.S.consumers toward conservation. 
D) the lack of substitutes for crude oil.

Question 6

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

Accepted Answer

A) waiting lists 
B) race 
C) price 
D) bribes 
A) waiting lists 
B) race 
C) price 
D) bribes

Question 7

In general,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 elastic. 
C) is unit elastic. 
D) is less elastic. 
A) has a fewer number of participants. 
B) is more elastic. 
C) is unit elastic. 
D) is less elastic.

Question 8

Rent control may lead to lower rents for those who find housing,but the quality of the housing may also be lower.

Accepted Answer

A) True 
 B)False

Question 9

Figure 6-7
  
-Refer to Figure 6-7.Which panel(s)best represent(s)a non-binding rent control in the long run?

Accepted Answer

A) panel (a) 
B) panel (b) 
C) neither panel 
D) either panel (a) or panel (b), depending upon local housing conditions 
A) panel (a) 
B) panel (b) 
C) neither panel 
D) either panel (a) or panel (b), depending upon local housing conditions

Question 10

A minimum wage that is set above a market's equilibrium wage will result in

Accepted Answer

A) an excess demand for labor, that is, unemployment. 
B) an excess demand for labor, that is, a shortage of workers. 
C) an excess supply of labor, that is, unemployment. 
D) an excess supply of labor, that is, a shortage of workers. 
A) an excess demand for labor, that is, unemployment. 
B) an excess demand for labor, that is, a shortage of workers. 
C) an excess supply of labor, that is, unemployment. 
D) an excess supply of labor, that is, a shortage of workers.

Question 11

One disadvantage of government subsidies over price controls is that subsidies

Accepted Answer

A) prevent the attainment of equilibrium in the markets in which they are imposed. 
B) make higher taxes necessary. 
C) are always unfair to those with low incomes. 
D) cause unemployment. 
A) prevent the attainment of equilibrium in the markets in which they are imposed. 
B) make higher taxes necessary. 
C) are always unfair to those with low incomes. 
D) cause unemployment.

Question 12

In the housing market,rent control causes

Accepted Answer

A) quantity supplied to fall and quantity demanded to fall. 
B) quantity supplied to fall and quantity demanded to rise. 
C) quantity supplied to rise and quantity demanded to fall. 
D) quantity supplied to rise and quantity demanded to rise. 
A) quantity supplied to fall and quantity demanded to fall. 
B) quantity supplied to fall and quantity demanded to rise. 
C) quantity supplied to rise and quantity demanded to fall. 
D) quantity supplied to rise and quantity demanded to rise.

Question 13

Figure 6-14.
  
-Refer to Figure 6-14.The effective price that sellers receive after the tax is imposed is

Accepted Answer

A) $24. 
B) $14. 
C) $10. 
D) $8. 
A) $24. 
B) $14. 
C) $10. 
D) $8.

Question 14

Which of the following is the most correct statement about tax burdens?

Accepted Answer

A) A tax burden falls most heavily on the side of the market that is more elastic. 
B) A tax burden falls most heavily on the side of the market that is less elastic. 
C) A tax burden falls most heavily on the side of the market that is closer to unit elastic. 
D) A tax burden is distributed independently of relative elasticities of supply and demand. 
A) A tax burden falls most heavily on the side of the market that is more elastic. 
B) A tax burden falls most heavily on the side of the market that is less elastic. 
C) A tax burden falls most heavily on the side of the market that is closer to unit elastic. 
D) A tax burden is distributed independently of relative elasticities of supply and demand.

Question 15

A price ceiling is a legal minimum on the price of a good or service.

Accepted Answer

A) True 
 B)False

Question 16

One economist has argued that rent control is "the best way to destroy a city,other than bombing." Why would an economist say this?

Accepted Answer

A) He fears that low rents will cause low-income people to move into the city, reducing the quality of life for other people. 
B) He fears that rent control will benefit landlords at the expense of tenants, increasing inequality in the city. 
C) He fears that rent controls will cause a construction boom, which will make the city crowded and more polluted. 
D) He fears that rent control will eliminate the incentive to maintain buildings, leading to a deterioration of the city. 
A) He fears that low rents will cause low-income people to move into the city, reducing the quality of life for other people. 
B) He fears that rent control will benefit landlords at the expense of tenants, increasing inequality in the city. 
C) He fears that rent controls will cause a construction boom, which will make the city crowded and more polluted. 
D) He fears that rent control will eliminate the incentive to maintain buildings, leading to a deterioration of the city.

Question 17

Which of the following was not a result of the luxury tax imposed by Congress in 1990?

Accepted Answer

A) The larger part of the tax burden fell on sellers. 
B) The larger part of the tax burden fell more on the middle class than on the rich. 
C) Even the wealthy demanded fewer luxury goods. 
D) The tax was never repealed or even modified. 
A) The larger part of the tax burden fell on sellers. 
B) The larger part of the tax burden fell more on the middle class than on the rich. 
C) Even the wealthy demanded fewer luxury goods. 
D) The tax was never repealed or even modified.

Question 18

Figure 6-3
  
-Refer to Figure 6-3.Which of the panels represents a binding price floor?

Accepted Answer

A) panel (a) but not panel (b) 
B) panel (b) but not panel (a) 
C) panel (a) and panel (b) 
D) neither panel (a) nor panel (b) 
A) panel (a) but not panel (b) 
B) panel (b) but not panel (a) 
C) panel (a) and panel (b) 
D) neither panel (a) nor panel (b)

Question 19

Figure 6-11. On the graph below, the shift of the supply curve from S₁ to S₂ represents the imposition of a tax on a good. On the axes, Q represents the quantity of the good and P represents the price.
  
-Consider Figure 6-11.The amount of the tax per unit is

Accepted Answer

A) $1.50. 
B) $2.00. 
C) $2.50. 
D) $3.00. 
A) $1.50. 
B) $2.00. 
C) $2.50. 
D) $3.00.

Question 20

A tax of $0.10 per Snickers bar on the sellers of Snickers will cause the

Accepted Answer

A) supply curve for Snickers to shift down by $0.10. 
B) supply curve for Snickers to shift up by $0.10. 
C) supply curve for Snickers to shift down by $0.05. 
D) demand curve for Snickers to shift up by $0.10. 
A) supply curve for Snickers to shift down by $0.10. 
B) supply curve for Snickers to shift up by $0.10. 
C) supply curve for Snickers to shift down by $0.05. 
D) demand curve for Snickers to shift up by $0.10.

Exam 6: Supply, demand, and Government Policies

Although lawmakers legislated a fifty-fifty division in the payment of the FICA tax,

Economists blame the long lines at gasoline stations in the U.S.in the 1970s on

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

When government imposes a price ceiling or a price floor in a market,

Other than OPEC,the shortage of gasoline in the U.S.in the 1970s could also be blamed on

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

In general,a tax burden falls more heavily on the side of the market that

Rent control may lead to lower rents for those who find housing,but the quality of the housing may also be lower.

Figure 6-7 -Refer to Figure 6-7.Which panel(s)best represent(s)a non-binding rent control in the long run?

A minimum wage that is set above a market's equilibrium wage will result in

One disadvantage of government subsidies over price controls is that subsidies

In the housing market,rent control causes

Figure 6-14. -Refer to Figure 6-14.The effective price that sellers receive after the tax is imposed is

Which of the following is the most correct statement about tax burdens?

A price ceiling is a legal minimum on the price of a good or service.

One economist has argued that rent control is "the best way to destroy a city,other than bombing." Why would an economist say this?

Which of the following was not a result of the luxury tax imposed by Congress in 1990?

Figure 6-3 -Refer to Figure 6-3.Which of the panels represents a binding price floor?

Figure 6-11. On the graph below, the shift of the supply curve from S₁ to S₂ represents the imposition of a tax on a good. On the axes, Q represents the quantity of the good and P represents the price. -Consider Figure 6-11.The amount of the tax per unit is

A tax of $0.10 per Snickers bar on the sellers of Snickers will cause the

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

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

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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