Question 1

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

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 2

Figure 6-13
  
-Refer to Figure 6-13.What is the per-unit burden of the tax on the sellers

Accepted Answer

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

Question 3

Market demand is given as QD = 280 - 4P.Market supply is given as QS = 2P + 40.Which legally imposed price would constitute a binding price floor

Accepted Answer

A) $10 
B) $20 
C) $40 
D) $50 
A) $10 
B) $20 
C) $40 
D) $50

Question 4

Although lawmakers designed the burden of the EI payroll tax to be split evenly between workers and firms,what do labour economists believe

Accepted Answer

A) The labour market is too distorted by the tax and should be eliminated. 
B) Firms bear most of the burden of the tax. 
C) Lawmakers may have achieved their goal because statistics show that the tax burden is currently equally divided. 
D) Workers bear most of the burden of the tax. 
A) The labour market is too distorted by the tax and should be eliminated. 
B) Firms bear most of the burden of the tax. 
C) Lawmakers may have achieved their goal because statistics show that the tax burden is currently equally divided. 
D) Workers bear most of the burden of the tax.

Question 5

If buyers of a product are required to pay a tax,the demand curve for the product will shift downward by exactly the size of the tax.

Accepted Answer

A) True 
 B)False

Question 6

Lawmakers can decide whether the buyer or the seller must send a tax to the government,but they cannot legislate the true burden of a tax.

Accepted Answer

A) True 
 B)False

Question 7

Which statement is the best explanation for the imposition of a price floor in the market for corn

Accepted Answer

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

Question 8

Market demand is given as QD = 210 - 5P.Market supply is given as QS = 2P.Which legally imposed price would constitute a binding price ceiling

Accepted Answer

A) $20 
B) $30 
C) $40 
D) $60 
A) $20 
B) $30 
C) $40 
D) $60

Question 9

Market demand is given as QD = 280 - 4P.Market supply is given as QS = 2P + 40.Which legally imposed price would constitute a binding price floor

Accepted Answer

A) $30 
B) $40 
C) $50 
D) $55 
A) $30 
B) $40 
C) $50 
D) $55

Question 10

Suppose that a tax is placed on music concerts.If the buyer ends up paying the majority of the tax,what do we know

Accepted Answer

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

Question 11

Figure 6-7
  
-Refer to Figure 6-7.If the government imposes a binding price floor of $5.00 in this market,what is the result

Accepted Answer

A) a surplus of 15 units 
B) a surplus of 20 units 
C) a surplus of 35 units 
D) a shortage of 20 units 
A) a surplus of 15 units 
B) a surplus of 20 units 
C) a surplus of 35 units 
D) a shortage of 20 units

Question 12

Figure 6-1

-Refer to Figure 6-1.Which of the above figures represent price control correctly

Accepted Answer

A) panel (a) and panel (c) 
B) panel (b) and panel (d) 
C) panel (a) and panel (d) 
D) panel (b) and panel (c) 
A) panel (a) and panel (c) 
B) panel (b) and panel (d) 
C) panel (a) and panel (d) 
D) panel (b) and panel (c)

Question 13

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 ceiling

Accepted Answer

A) $9 
B) $12 
C) $18 
D) $21 
A) $9 
B) $12 
C) $18 
D) $21

Question 14

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

Accepted Answer

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

Question 15

What is the most likely result of the imposition of a price floor in the market for rental cars

Accepted Answer

A) free gasoline given to people as an incentive to rent a car 
B) poor engine maintenance in rental cars 
C) an accumulation of dirt in the interior of rental cars 
D) slow replacement of old rental cars with new ones 
A) free gasoline given to people as an incentive to rent a car 
B) poor engine maintenance in rental cars 
C) an accumulation of dirt in the interior of rental cars 
D) slow replacement of old rental cars with new ones

Question 16

What do we know about price controls imposed by policymakers

Accepted Answer

A) They often harm those they are trying to help. 
B) They are designed to provide more stability in the market. 
C) They allow the market to equate quantity demanded and quantity supplied. 
D) They may improve market efficiency but may also cause greater inequity. 
A) They often harm those they are trying to help. 
B) They are designed to provide more stability in the market. 
C) They allow the market to equate quantity demanded and quantity supplied. 
D) They may improve market efficiency but may also cause greater inequity.

Question 17

What is a key result of a payroll tax

Accepted Answer

A) It becomes a tax on low-income households. 
B) It becomes a tax on corporations. 
C) It places a wedge between the wage that firms pay and the wage that workers receive. 
D) It does not affect equilibrium in labour markets. 
A) It becomes a tax on low-income households. 
B) It becomes a tax on corporations. 
C) It places a wedge between the wage that firms pay and the wage that workers receive. 
D) It does not affect equilibrium in labour markets.

Question 18

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

Accepted Answer

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

Question 19

When binding price ceilings are imposed to benefit buyers,what happens

Accepted Answer

A) Every buyer in the market benefits because of lower prices. 
B) Some buyers will not be able to buy any of the products. 
C) Sellers in the market will also benefit from price ceilings. 
D) The quantity sellers want to sell will equal the quantity buyers want to buy. 
A) Every buyer in the market benefits because of lower prices. 
B) Some buyers will not be able to buy any of the products. 
C) Sellers in the market will also benefit from price ceilings. 
D) The quantity sellers want to sell will equal the quantity buyers want to buy.

Question 20

If a tax is imposed on the buyer of a product,the tax incidence will fall entirely on the buyer,causing the buyer to pay more.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, demand, and Government Policies

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

Figure 6-13 -Refer to Figure 6-13.What is the per-unit burden of the tax on the sellers

Market demand is given as QD = 280 - 4P.Market supply is given as QS = 2P + 40.Which legally imposed price would constitute a binding price floor

Although lawmakers designed the burden of the EI payroll tax to be split evenly between workers and firms,what do labour economists believe

If buyers of a product are required to pay a tax,the demand curve for the product will shift downward by exactly the size of the tax.

Lawmakers can decide whether the buyer or the seller must send a tax to the government,but they cannot legislate the true burden of a tax.

Which statement is the best explanation for the imposition of a price floor in the market for corn

Market demand is given as QD = 210 - 5P.Market supply is given as QS = 2P.Which legally imposed price would constitute a binding price ceiling

Market demand is given as QD = 280 - 4P.Market supply is given as QS = 2P + 40.Which legally imposed price would constitute a binding price floor

Suppose that a tax is placed on music concerts.If the buyer ends up paying the majority of the tax,what do we know

Figure 6-7 -Refer to Figure 6-7.If the government imposes a binding price floor of $5.00 in this market,what is the result

Figure 6-1 -Refer to Figure 6-1.Which of the above figures represent price control correctly

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 ceiling

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

What is the most likely result of the imposition of a price floor in the market for rental cars

What do we know about price controls imposed by policymakers

What is a key result of a payroll tax

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

When binding price ceilings are imposed to benefit buyers,what happens

If a tax is imposed on the buyer of a product,the tax incidence will fall entirely on the buyer,causing the buyer to pay more.

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= 280 - 4P.Market supply is given as Q_S= 2P + 40.Which legally imposed price would constitute a binding price floor

Market demand is given as Q_D= 210 - 5P.Market supply is given as Q_S= 2P.Which legally imposed price would constitute a binding price ceiling

Market demand is given as Q_D= 280 - 4P.Market supply is given as Q_S= 2P + 40.Which legally imposed price would constitute a binding price floor

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 ceiling