Question 1

What effect will a tax on sellers of trampolines have on the price the buyers pay and the effective price the sellers receive

Accepted Answer

A) The price the buyers pay and the effective price the sellers receive will rise. 
B) The price the buyers pay and the effective price the sellers receive will fall. 
C) The price the buyers pay will rise, and the effective price the sellers receive will fall. 
D) The price the buyers pay will fall, and the effective price the sellers receive will rise. 
A) The price the buyers pay and the effective price the sellers receive will rise. 
B) The price the buyers pay and the effective price the sellers receive will fall. 
C) The price the buyers pay will rise, and the effective price the sellers receive will fall. 
D) The price the buyers pay will fall, and the effective price the sellers receive will rise.

Question 2

Figure 6-13
  
-Refer to Figure 6-13.What is the amount of the tax per unit imposed

Accepted Answer

A) $6 
B) $8 
C) $14 
D) $16 
A) $6 
B) $8 
C) $14 
D) $16

Question 3

What results from a tax placed on the sellers of blueberries

Accepted Answer

A) It increases costs, lowers profit, and shifts supply to the left (upward). 
B) It increases costs, lowers profit, and shifts supply to the right (downward). 
C) It reduces costs, raises profit, and shifts supply to the left (upward). 
D) It reduces costs, lowers profit, and shifts supply to the right (downward). 
A) It increases costs, lowers profit, and shifts supply to the left (upward). 
B) It increases costs, lowers profit, and shifts supply to the right (downward). 
C) It reduces costs, raises profit, and shifts supply to the left (upward). 
D) It reduces costs, lowers profit, and shifts supply to the right (downward).

Question 4

A binding minimum wage in a competitive labour market creates unemployment.

Accepted Answer

A) True 
 B)False

Question 5

Figure 6-9
  
-Refer to Figure 6-9.What is the share of the tax burden per unit that buyers would pay

Accepted Answer

A) $4.00 
B) $6.00 
C) $8.00 
D) $10.0 
A) $4.00 
B) $6.00 
C) $8.00 
D) $10.0

Question 6

In Canada,when minimum wage laws are established,what must employers do

Accepted Answer

A) pay the going (equilibrium) wage in the market 
B) pay a wage equal to or higher than the minimum wage 
C) hire a minimum number of employees that is set by the government 
D) hire only those workers who will work for the established minimum wage 
A) pay the going (equilibrium) wage in the market 
B) pay a wage equal to or higher than the minimum wage 
C) hire a minimum number of employees that is set by the government 
D) hire only those workers who will work for the established minimum wage

Question 7

Market demand is given as QD = 45 - P.Market supply is given as QS = P + 15.Which legally imposed price would constitute a binding price floor

Accepted Answer

A) $5 
B) $15 
C) $50 
D) $80 
A) $5 
B) $15 
C) $50 
D) $80

Question 8

Since half of the EI 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 9

What is NOT a function of prices in a market system

Accepted Answer

A) Prices have the crucial role of balancing supply and demand. 
B) Prices send signals to buyers and sellers to help them make rational economic decisions. 
C) Prices coordinate economic activity. 
D) Prices make an equitable distribution of goods and services among consumers possible. 
A) Prices have the crucial role of balancing supply and demand. 
B) Prices send signals to buyers and sellers to help them make rational economic decisions. 
C) Prices coordinate economic activity. 
D) Prices make an equitable distribution of goods and services among consumers possible.

Question 10

Figure 6-12
  
-Refer to Figure 6-12.What is the per-unit burden of the tax on buyers

Accepted Answer

A) P₂ minus P₀ 
B) P₂ minus P₁ 
C) P₁ minus P₀ 
D) Q₁ minus Q₀ 
A) P₂ minus P₀ 
B) P₂ minus P₁ 
C) P₁ minus P₀ 
D) Q₁ minus Q₀

Question 11

What is one disadvantage of government subsidies over price controls

Accepted Answer

A) Subsidies cause disequilibrium in the market in which they are imposed. 
B) Subsidies require higher taxes. 
C) Subsidies cause lower prices to suppliers. 
D) Subsidies cause unemployment. 
A) Subsidies cause disequilibrium in the market in which they are imposed. 
B) Subsidies require higher taxes. 
C) Subsidies cause lower prices to suppliers. 
D) Subsidies cause unemployment.

Question 12

Market demand is given as QD = 150 - 3P.Market supply is given as QS = 2P + 50.Which legally imposed price would constitute a binding price floor

Accepted Answer

A) $10 
B) $20 
C) $50 
D) $55 
A) $10 
B) $20 
C) $50 
D) $55

Question 13

Figure 6-3
  
-Refer to Figure 6-3.At which price would a binding price ceiling exist

Accepted Answer

A) $5.00 
B) $6.00 
C) $7.00 
D) $8.00 
A) $5.00 
B) $6.00 
C) $7.00 
D) $8.00

Question 14

What is a result of binding price ceilings

Accepted Answer

A) market efficiency 
B) shortages 
C) buyer bias 
D) surpluses 
A) market efficiency 
B) shortages 
C) buyer bias 
D) surpluses

Question 15

In general,on which side of the market does a tax burden fall more heavily

Accepted Answer

A) on the side of the market that is perfectly elastic 
B) on the side of the market that is more elastic 
C) on the side of the market that is unit elastic 
D) on the side of the market that is less elastic 
A) on the side of the market that is perfectly elastic 
B) on the side of the market that is more elastic 
C) on the side of the market that is unit elastic 
D) on the side of the market that is less elastic

Question 16

Why are policymakers led to control prices

Accepted Answer

A) They view the market's outcome as inefficient. 
B) They view the market's outcome as inequitable. 
C) Price control policies actually help the average hardworking Canadian. 
D) They are required to do so under the Employment Act of 1946. 
A) They view the market's outcome as inefficient. 
B) They view the market's outcome as inequitable. 
C) Price control policies actually help the average hardworking Canadian. 
D) They are required to do so under the Employment Act of 1946.

Question 17

What technique can most efficiently lessen water shortages caused by droughts

Accepted Answer

A) allowing price to equate the quantity demanded of water with the quantity supplied of water 
B) restricting water usage of consumers 
C) creating a website where "water wasters" can be reported 
D) imposing tight price controls on water 
A) allowing price to equate the quantity demanded of water with the quantity supplied of water 
B) restricting water usage of consumers 
C) creating a website where "water wasters" can be reported 
D) imposing tight price controls on water

Question 18

If a price ceiling is not binding,it will have no effect on the market.

Accepted Answer

A) True 
 B)False

Question 19

Using the graph shown below,answer the following questions.
a.What was the equilibrium price in this market before the tax
b.What is the amount of the tax
c.How much of the tax will the buyers pay
d.How much of the tax will the sellers pay
e.How much will the buyer pay for the product after the tax is imposed
f.How much will the seller receive after the tax is imposed
g.As a result of the tax,what has happened to the level of market activity

Accepted Answer

a. $10
b. $3
c. $1
d. $2
e. $1

Question 20

Suppose that a tax is placed on books.If the buyer pays the majority of the tax,what do we know

Accepted Answer

A) The supply curve is more inelastic than the demand curve. 
B) The demand curve is more inelastic than the supply curve. 
C) The government has placed the tax on the seller. 
D) The government has placed the tax on the buyer. 
A) The supply curve is more inelastic than the demand curve. 
B) The demand curve is more inelastic than the supply curve. 
C) The government has placed the tax on the seller. 
D) The government has placed the tax on the buyer.

Exam 6: Supply, demand, and Government Policies

What effect will a tax on sellers of trampolines have on the price the buyers pay and the effective price the sellers receive

Figure 6-13 -Refer to Figure 6-13.What is the amount of the tax per unit imposed

What results from a tax placed on the sellers of blueberries

A binding minimum wage in a competitive labour market creates unemployment.

Figure 6-9 -Refer to Figure 6-9.What is the share of the tax burden per unit that buyers would pay

In Canada,when minimum wage laws are established,what must employers do

Market demand is given as QD = 45 - P.Market supply is given as QS = P + 15.Which legally imposed price would constitute a binding price floor

Since half of the EI 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.

What is NOT a function of prices in a market system

Figure 6-12 -Refer to Figure 6-12.What is the per-unit burden of the tax on buyers

What is one disadvantage of government subsidies over price controls

Market demand is given as QD = 150 - 3P.Market supply is given as QS = 2P + 50.Which legally imposed price would constitute a binding price floor

Figure 6-3 -Refer to Figure 6-3.At which price would a binding price ceiling exist

What is a result of binding price ceilings

In general,on which side of the market does a tax burden fall more heavily

Why are policymakers led to control prices

What technique can most efficiently lessen water shortages caused by droughts

If a price ceiling is not binding,it will have no effect on the market.

Suppose that a tax is placed on books.If the buyer pays the majority of the tax,what do we know

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 Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters

Market demand is given as Q_D= 45 - P.Market supply is given as Q_S= P + 15.Which legally imposed price would constitute a binding price floor

Market demand is given as Q_D= 150 - 3P.Market supply is given as Q_S= 2P + 50.Which legally imposed price would constitute a binding price floor