Question 1

What is a legal minimum price at which a good can be sold

Accepted Answer

A) a price cut 
B) a price stabilization 
C) a price ceiling 
D) a price floor 
A) a price cut 
B) a price stabilization 
C) a price ceiling 
D) a price floor

Question 2

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

Accepted Answer

A) It depends on the supply and demand of that product. 
B) It depends on how lawmakers decide the burden should be placed. 
C) It usually falls more heavily on the buyer. 
D) It usually falls more heavily on the seller. 
A) It depends on the supply and demand of that product. 
B) It depends on how lawmakers decide the burden should be placed. 
C) It usually falls more heavily on the buyer. 
D) It usually falls more heavily on the seller.

Question 3

What is EI an example of

Accepted Answer

A) a payroll tax 
B) a sales tax 
C) a farm subsidy 
D) fire insurance 
A) a payroll tax 
B) a sales tax 
C) a farm subsidy 
D) fire insurance

Question 4

Unlike minimum-wage laws,what do wage subsidies do

Accepted Answer

A) They discourage firms from hiring the working poor. 
B) They cause unemployment. 
C) They help only wealthy workers. 
D) They raise living standards of the working poor without creating unemployment. 
A) They discourage firms from hiring the working poor. 
B) They cause unemployment. 
C) They help only wealthy workers. 
D) They raise living standards of the working poor without creating unemployment.

Question 5

Market demand is given as QD = 100 - P.Market supply is given as QS = 4P.Which legally imposed price would constitute a binding price ceiling

Accepted Answer

A) $10 
B) $30 
C) $60 
D) $120 
A) $10 
B) $30 
C) $60 
D) $120

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

How is rent control best characterized

Accepted Answer

A) as a common example of a social problem solved by government regulation 
B) as a common example of a price ceiling 
C) as the most effective way to provide affordable housing 
D) as the most efficient way to allocate housing 
A) as a common example of a social problem solved by government regulation 
B) as a common example of a price ceiling 
C) as the most effective way to provide affordable housing 
D) as the most efficient way to allocate housing

Question 8

What is the minimum wage an example of

Accepted Answer

A) a price ceiling 
B) a price floor 
C) a free-market process 
D) an efficient labour allocation mechanism 
A) a price ceiling 
B) a price floor 
C) a free-market process 
D) an efficient labour allocation mechanism

Question 9

Figure 6-2
  
-Refer to Figure 6-2.At what price would there be a binding price floor

Accepted Answer

A) a price of $8.00 
B) a price of $10.00 
C) any price below $7.00 
D) any price above $10.00 
A) a price of $8.00 
B) a price of $10.00 
C) any price below $7.00 
D) any price above $10.00

Question 10

If a tax is imposed on a market with inelastic demand,how is the burden of the tax distributed

Accepted Answer

A) Buyers will bear most of the burden of the tax if the supply is elastic. 
B) Sellers will bear most of the burden of the tax if the supply is elastic. 
C) Buyers will bear most of the burden of the tax if the supply is inelastic. 
D) Sellers will bear most of the burden of the tax if the supply is inelastic. 
A) Buyers will bear most of the burden of the tax if the supply is elastic. 
B) Sellers will bear most of the burden of the tax if the supply is elastic. 
C) Buyers will bear most of the burden of the tax if the supply is inelastic. 
D) Sellers will bear most of the burden of the tax if the supply is inelastic.

Question 11

What happens if a binding price ceiling is imposed in a market

Accepted Answer

A) There will be a surplus in the market. 
B) The price will be legally forced toward equilibrium price. 
C) There will be a shortage in the market. 
D) Market forces will guarantee that the price will be at equilibrium. 
A) There will be a surplus in the market. 
B) The price will be legally forced toward equilibrium price. 
C) There will be a shortage in the market. 
D) Market forces will guarantee that the price will be at equilibrium.

Question 12

Which statement best describes a price ceiling

Accepted Answer

A) A price ceiling is a legal maximum on the price at which a good can be sold. 
B) A price ceiling is a legal minimum on the price at which a good can be sold. 
C) A price ceiling occurs when the price in the market is temporarily above equilibrium. 
D) A price ceiling occurs when the price in the market is subsidized by the government. 
A) A price ceiling is a legal maximum on the price at which a good can be sold. 
B) A price ceiling is a legal minimum on the price at which a good can be sold. 
C) A price ceiling occurs when the price in the market is temporarily above equilibrium. 
D) A price ceiling occurs when the price in the market is subsidized by the government.

Question 13

Market demand is given as QD = 400 - 2P.Market supply is given as QS = 2P.Which legally imposed price would constitute a binding price ceiling

Accepted Answer

A) $80 
B) $120 
C) $160 
D) $200 
A) $80 
B) $120 
C) $160 
D) $200

Question 14

Economic policies often have effects that their architects did not intend or anticipate.

Accepted Answer

A) True 
 B)False

Question 15

Figure 6-8
  
-Refer to Figure 6-8.What is the share of the tax burden that sellers would pay

Accepted Answer

A) $1.00 per unit 
B) $1.50 per unit 
C) $2.00 per unit 
D) $3.00 per unit 
A) $1.00 per unit 
B) $1.50 per unit 
C) $2.00 per unit 
D) $3.00 per unit

Question 16

Using the equations shown below,answer the following questions.
QD = a - bP
QS = c + dP
a.What is the equilibrium price and quantity in this market
b.Assuming a tax of T is imposed on the seller side,what is the equilibrium price and quantity after the tax
c.What is the effective price the sellers receive

Accepted Answer

a. Equilibrium price is (a – c) / (b + d

Question 17

What effect will a tax on the buyers of organic tea have on the prices paid and received

Accepted Answer

A) The price the buyer pays and the price the seller receives will rise. 
B) The price the buyer pays and the price the seller receives will fall. 
C) The price the buyer pays will rise and the price the seller receives will fall. 
D) The price the buyer pays will fall and the price the seller receives will rise. 
A) The price the buyer pays and the price the seller receives will rise. 
B) The price the buyer pays and the price the seller receives will fall. 
C) The price the buyer pays will rise and the price the seller receives will fall. 
D) The price the buyer pays will fall and the price the seller receives will rise.

Question 18

On which side of the market does a tax burden fall most heavily

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 more inelastic. 
C) A tax burden falls most heavily on the side of the market that is closer to unit elastic. 
D) A tax burden falls most heavily on the side of the market that is closer to perfect elastic. 
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 more inelastic. 
C) A tax burden falls most heavily on the side of the market that is closer to unit elastic. 
D) A tax burden falls most heavily on the side of the market that is closer to perfect elastic.

Question 19

What is a payroll tax

Accepted Answer

A) a tax on the wages firms pay their workers 
B) a tax each firm must pay to the government to hire workers and operate a business 
C) a fixed per-worker amount each firm pays to the government 
D) a tax on all wages above minimum wage 
A) a tax on the wages firms pay their workers 
B) a tax each firm must pay to the government to hire workers and operate a business 
C) a fixed per-worker amount each firm pays to the government 
D) a tax on all wages above minimum wage

Question 20

What effect will a tax on sellers of hockey skates have on equilibrium price and quantity

Accepted Answer

A) It will reduce the equilibrium price of tires and increase the equilibrium quantity. 
B) It will reduce the equilibrium price of tires and reduce the equilibrium quantity. 
C) It will increase the equilibrium price of tires and increase the equilibrium quantity. 
D) It will increase the equilibrium price of tires and reduce the equilibrium quantity. 
A) It will reduce the equilibrium price of tires and increase the equilibrium quantity. 
B) It will reduce the equilibrium price of tires and reduce the equilibrium quantity. 
C) It will increase the equilibrium price of tires and increase the equilibrium quantity. 
D) It will increase the equilibrium price of tires and reduce the equilibrium quantity.

Exam 6: Supply, demand, and Government Policies

What is a legal minimum price at which a good can be sold

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

What is EI an example of

Unlike minimum-wage laws,what do wage subsidies do

Market demand is given as QD = 100 - P.Market supply is given as QS = 4P.Which legally imposed price would constitute a binding price ceiling

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

How is rent control best characterized

What is the minimum wage an example of

Figure 6-2 -Refer to Figure 6-2.At what price would there be a binding price floor

If a tax is imposed on a market with inelastic demand,how is the burden of the tax distributed

What happens if a binding price ceiling is imposed in a market

Which statement best describes a price ceiling

Market demand is given as QD = 400 - 2P.Market supply is given as QS = 2P.Which legally imposed price would constitute a binding price ceiling

Economic policies often have effects that their architects did not intend or anticipate.

Figure 6-8 -Refer to Figure 6-8.What is the share of the tax burden that sellers would pay

What effect will a tax on the buyers of organic tea have on the prices paid and received

On which side of the market does a tax burden fall most heavily

What is a payroll tax

What effect will a tax on sellers of hockey skates have on equilibrium price and quantity

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= 100 - P.Market supply is given as Q_S= 4P.Which legally imposed price would constitute a binding price ceiling

Market demand is given as Q_D= 400 - 2P.Market supply is given as Q_S= 2P.Which legally imposed price would constitute a binding price ceiling