Question 1

Suppose that the government sets a maximum price for insulin below the equilibrium price.In this situation,

Accepted Answer

A)  there will be an efficient level of insulin produced. 
B)  there will be excess supply of insulin. 
C)  total surplus will be lower than it would be at the market equilibrium price. 
D)  total surplus will be greater than it would be at the market equilibrium price. 
A)  there will be an efficient level of insulin produced. 
B)  there will be excess supply of insulin. 
C)  total surplus will be lower than it would be at the market equilibrium price. 
D)  total surplus will be greater than it would be at the market equilibrium price.

Question 2

The licensing of taxis through the use of medallions decreases the price of taxi service.

Accepted Answer

A) True 
 B)False

Question 3

A burden of a tax on a good will not always be borne entirely by the seller.

Accepted Answer

A) True 
 B)False

Question 4

-Figure 6.8 shows the market for taxicab services in a small town.If the government limits taxicab services to 20 per day,then producer surplus will

Accepted Answer

A)  increase by $10.00. 
B)  increase by $6.25. 
C)  decrease by $3.75. 
D)  increase by $20.00. 
A)  increase by $10.00. 
B)  increase by $6.25. 
C)  decrease by $3.75. 
D)  increase by $20.00.

Question 5

Suppose that you are willing to pay $25 for a new shirt and the market price is $35.In this case

Accepted Answer

A)  you will not buy the good. 
B)  you will buy the good and receive a consumer surplus of $5. 
C)  you will buy the good and receive a consumer surplus of -$10. 
D)  you will buy the good and receive a consumer surplus of -$35. 
A)  you will not buy the good. 
B)  you will buy the good and receive a consumer surplus of $5. 
C)  you will buy the good and receive a consumer surplus of -$10. 
D)  you will buy the good and receive a consumer surplus of -$35.

Question 6

-Figure 6.7 shows the supply and demand curves for human kidneys.Because the government does not allow a person to sell a kidney,

Accepted Answer

A)  50 kidneys are donated. 
B)  30 kidneys are donated. 
C)  20 kidneys are donated. 
D)  0 kidneys are donated. 
A)  50 kidneys are donated. 
B)  30 kidneys are donated. 
C)  20 kidneys are donated. 
D)  0 kidneys are donated.

Question 7

6.3 Controlling Prices-Maximum and Minimum Prices
   
Figure 6.6
-Refer to Figure 6.6.If the government will not allow landlords to charge more than $400 for an apartment,which of the following will happen?

Accepted Answer

A)  Demand must eventually decrease so that the market will come into equilibrium at a price of $400. 
B)  Supply must eventually increase so that the market will come into equilibrium at a price of $400. 
C)  There will be an excess demand for apartments. 
D)  The market will be in equilibrium at a price of $400. 
A)  Demand must eventually decrease so that the market will come into equilibrium at a price of $400. 
B)  Supply must eventually increase so that the market will come into equilibrium at a price of $400. 
C)  There will be an excess demand for apartments. 
D)  The market will be in equilibrium at a price of $400.

Question 8

-Figure 6.9 shows the market for tobacco.If the government has no restrictions on imported tobacco,what will be the price of tobacco and the level of tobacco produced? If the government passes a law banning tobacco imports,what happens to the price of tobacco and the quantity of tobacco sold?

Accepted Answer

If there are no laws limiting tobacco im

Question 9

Figure 6.1
  
-Refer to Figure 6.1.If the price of a donut is $ 0.75,consumer surplus is

Accepted Answer

A)  $1.75. 
B)  $1.50. 
C)  $0.75. 
D)  $0.50. 
A)  $1.75. 
B)  $1.50. 
C)  $0.75. 
D)  $0.50.

Question 10

Recall the Application about Japanese and American consumers' willingness to pay for Internet service to answer the following question(s). In the United States, the average willingness to pay for Internet service is $85 per month, and the average monthly price of Internet service is $40 per month.
-According to the Application,as a percentage of the price,consumer surplus from Internet service is

Accepted Answer

A)  lower in Japan than in the Unites States. 
B)  lower in the United States than in Japan. 
C)  about the same in both the United States and Japan. 
D)  positive in Japan and negative in the United States. 
A)  lower in Japan than in the Unites States. 
B)  lower in the United States than in Japan. 
C)  about the same in both the United States and Japan. 
D)  positive in Japan and negative in the United States.

Question 11

A tax on a good or service generally creates a deadweight loss.

Accepted Answer

A) True 
 B)False

Question 12

Recall the Application about taxes on luxury goods to answer the following question(s).
-Recall the Application.If the demand for yachts is elastic,we could predict the luxury tax will

Accepted Answer

A)  decrease the sales of yachts. 
B)  increase the sales of yachts. 
C)  benefit only sellers. 
D)  none of the above 
A)  decrease the sales of yachts. 
B)  increase the sales of yachts. 
C)  benefit only sellers. 
D)  none of the above

Question 13

Consumer surplus is the difference between the price that a buyer pays and the price a seller requires.

Accepted Answer

A) True 
 B)False

Question 14

What determines the size of the deadweight loss of a tax?

Accepted Answer

The larger the distortion that

Question 15

-Figure 6.8 shows the market for taxicab services in a small town.If the government limits taxicab services to 20 per day,the price per mile traveled will be

Accepted Answer

A)  $1.00. 
B)  $1.50. 
C)  $2.00. 
D)  It is impossible to determine. 
A)  $1.00. 
B)  $1.50. 
C)  $2.00. 
D)  It is impossible to determine.

Question 16

What is consumer surplus?

Accepted Answer

Consumer surplus is the differ

Question 17

The difference between the maximum amount a person is willing to pay for a good and its current market price is known as

Accepted Answer

A)  the paradox of value. 
B)  profits. 
C)  revealed preferences. 
D)  consumer surplus. 
A)  the paradox of value. 
B)  profits. 
C)  revealed preferences. 
D)  consumer surplus.

Question 18

All else equal,if demand is relatively elastic and supply is relatively inelastic,a tax on a product will cause

Accepted Answer

A)  buyers to bear a larger portion of the tax burden. 
B)  sellers to bear a larger portion of the tax burden. 
C)  buyers and sellers to share the tax burden equally. 
D)  It is impossible to tell from this information who will bear the greater tax burden. 
A)  buyers to bear a larger portion of the tax burden. 
B)  sellers to bear a larger portion of the tax burden. 
C)  buyers and sellers to share the tax burden equally. 
D)  It is impossible to tell from this information who will bear the greater tax burden.

Question 19

Figure 6.3
  
-Refer to Figure 6.3.If the price of one hour of tutoring falls from $30 to $20,then producer surplus will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  not change. 
D)  cease to exist. 
A)  increase. 
B)  decrease. 
C)  not change. 
D)  cease to exist.

Question 20

Consider a market with a downward-sloping demand curve and an upward-sloping supply curve.A $50 tax levied on the producer of the good will cause the market price to

Accepted Answer

A)  increase by $50. 
B)  decrease by $50. 
C)  increase by less than $50. 
D)  increase by more than $50. 
A)  increase by $50. 
B)  decrease by $50. 
C)  increase by less than $50. 
D)  increase by more than $50.

Suppose that the government sets a maximum price for insulin below the equilibrium price.In this situation,

The licensing of taxis through the use of medallions decreases the price of taxi service.

A burden of a tax on a good will not always be borne entirely by the seller.

-Figure 6.8 shows the market for taxicab services in a small town.If the government limits taxicab services to 20 per day,then producer surplus will

Suppose that you are willing to pay $25 for a new shirt and the market price is $35.In this case

-Figure 6.7 shows the supply and demand curves for human kidneys.Because the government does not allow a person to sell a kidney,

6.3 Controlling Prices-Maximum and Minimum Prices Figure 6.6 -Refer to Figure 6.6.If the government will not allow landlords to charge more than $400 for an apartment,which of the following will happen?

-Figure 6.9 shows the market for tobacco.If the government has no restrictions on imported tobacco,what will be the price of tobacco and the level of tobacco produced? If the government passes a law banning tobacco imports,what happens to the price of tobacco and the quantity of tobacco sold?

Figure 6.1 -Refer to Figure 6.1.If the price of a donut is $ 0.75,consumer surplus is

A tax on a good or service generally creates a deadweight loss.

Recall the Application about taxes on luxury goods to answer the following question(s). -Recall the Application.If the demand for yachts is elastic,we could predict the luxury tax will

Consumer surplus is the difference between the price that a buyer pays and the price a seller requires.

What determines the size of the deadweight loss of a tax?

-Figure 6.8 shows the market for taxicab services in a small town.If the government limits taxicab services to 20 per day,the price per mile traveled will be

What is consumer surplus?

The difference between the maximum amount a person is willing to pay for a good and its current market price is known as

All else equal,if demand is relatively elastic and supply is relatively inelastic,a tax on a product will cause

Figure 6.3 -Refer to Figure 6.3.If the price of one hour of tutoring falls from $30 to $20,then producer surplus will

Consider a market with a downward-sloping demand curve and an upward-sloping supply curve.A $50 tax levied on the producer of the good will cause the market price to

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 6: Market Efficiency and Government Intervention

Suppose that the government sets a maximum price for insulin below the equilibrium price.In this situation,

The licensing of taxis through the use of medallions decreases the price of taxi service.

A burden of a tax on a good will not always be borne entirely by the seller.

-Figure 6.8 shows the market for taxicab services in a small town.If the government limits taxicab services to 20 per day,then producer surplus will

Suppose that you are willing to pay $25 for a new shirt and the market price is $35.In this case

-Figure 6.7 shows the supply and demand curves for human kidneys.Because the government does not allow a person to sell a kidney,

6.3 Controlling Prices-Maximum and Minimum Prices Figure 6.6 -Refer to Figure 6.6.If the government will not allow landlords to charge more than $400 for an apartment,which of the following will happen?

-Figure 6.9 shows the market for tobacco.If the government has no restrictions on imported tobacco,what will be the price of tobacco and the level of tobacco produced? If the government passes a law banning tobacco imports,what happens to the price of tobacco and the quantity of tobacco sold?

Figure 6.1 -Refer to Figure 6.1.If the price of a donut is $ 0.75,consumer surplus is

A tax on a good or service generally creates a deadweight loss.

Recall the Application about taxes on luxury goods to answer the following question(s). -Recall the Application.If the demand for yachts is elastic,we could predict the luxury tax will

Consumer surplus is the difference between the price that a buyer pays and the price a seller requires.

What determines the size of the deadweight loss of a tax?

-Figure 6.8 shows the market for taxicab services in a small town.If the government limits taxicab services to 20 per day,the price per mile traveled will be

What is consumer surplus?

The difference between the maximum amount a person is willing to pay for a good and its current market price is known as

All else equal,if demand is relatively elastic and supply is relatively inelastic,a tax on a product will cause

Figure 6.3 -Refer to Figure 6.3.If the price of one hour of tutoring falls from $30 to $20,then producer surplus will

Consider a market with a downward-sloping demand curve and an upward-sloping supply curve.A $50 tax levied on the producer of the good will cause the market price to

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters