Question 1

Figure 6-2  
-Refer to Figure 6-2. The price ceiling

Accepted Answer

A) is binding. 
B) causes a shortage. 
C) causes the quantity demanded to exceed the quantity supplied. 
D) All of the above are correct. 
A) is binding. 
B) causes a shortage. 
C) causes the quantity demanded to exceed the quantity supplied. 
D) All of the above are correct.

Question 2

Price ceilings are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 3

A tax imposed on the sellers of a good will

Accepted Answer

A) raise both the price buyers pay and the effective price sellers receive. 
B) raise the price buyers pay and lower the effective price sellers receive. 
C) lower the price buyers pay and raise the effective price sellers receive. 
D) lower both the price buyers pay and the effective price sellers receive. 
A) raise both the price buyers pay and the effective price sellers receive. 
B) raise the price buyers pay and lower the effective price sellers receive. 
C) lower the price buyers pay and raise the effective price sellers receive. 
D) lower both the price buyers pay and the effective price sellers receive.

Question 4

Figure 6-4  
-Refer to Figure 6-4. A government-imposed price of $16 in this market could be an example of a (i)
Binding price ceiling.(ii)
Non-binding price ceiling.(iii)
Binding price floor.(iv)
Non-binding price floor.

Accepted Answer

A) (i) only 
B) (ii) only 
C) (i) and (iv) only 
D) (ii) and (iii) only 
A) (i) only 
B) (ii) only 
C) (i) and (iv) only 
D) (ii) and (iii) only

Question 5

When a tax is placed on the sellers of cell phones, the size of the cell phone market

Accepted Answer

A) and the effective price received by sellers both increase. 
B) increases, but the effective price received by sellers decreases. 
C) decreases, but the effective price received by sellers increases. 
D) and the effective price received by sellers both decrease. 
A) and the effective price received by sellers both increase. 
B) increases, but the effective price received by sellers decreases. 
C) decreases, but the effective price received by sellers increases. 
D) and the effective price received by sellers both decrease.

Question 6

How does elasticity affect the burden of a tax? Justify your answer using supply and demand diagrams.

Accepted Answer

@#IMG-DLM& The tax burden fall

Question 7

Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Accepted Answer

A) True 
 B)False

Question 8

Figure 6-20  
-Refer to Figure 6-20. The price paid by buyers after the tax is imposed is

Accepted Answer

A) $24. 
B) $21. 
C) $18. 
D) $16. 
A) $24. 
B) $21. 
C) $18. 
D) $16.

Question 9

Suppose that a tax is placed on books. If the buyers pay the majority of the tax, then we know that the

Accepted Answer

A) demand is more inelastic than the supply. 
B) supply is more inelastic than the demand. 
C) government has required that buyers remit the tax payments. 
D) government has required that sellers remit the tax payments. 
A) demand is more inelastic than the supply. 
B) supply is more inelastic than the demand. 
C) government has required that buyers remit the tax payments. 
D) government has required that sellers remit the tax payments.

Question 10

An outcome that can result from either a price ceiling or a price floor is

Accepted Answer

A) an enhancement of efficiency. 
B) undesirable rationing mechanisms. 
C) a surplus. 
D) a shortage. 
A) an enhancement of efficiency. 
B) undesirable rationing mechanisms. 
C) a surplus. 
D) a shortage.

Question 11

Under rent control, bribery is a mechanism to

Accepted Answer

A) bring the total price of an apartment (including the bribe) closer to the equilibrium price. 
B) allocate housing to the poorest individuals in the market. 
C) force the total price of an apartment (including the bribe) to be less than the market price. 
D) allocate housing to the most deserving tenants. 
A) bring the total price of an apartment (including the bribe) closer to the equilibrium price. 
B) allocate housing to the poorest individuals in the market. 
C) force the total price of an apartment (including the bribe) to be less than the market price. 
D) allocate housing to the most deserving tenants.

Question 12

The goal of rent control is to help the poor by making housing more affordable.

Accepted Answer

A) True 
 B)False

Question 13

To say that a price ceiling is nonbinding is to say that the price ceiling

Accepted Answer

A) results in a surplus. 
B) is set above the equilibrium price. 
C) causes quantity demanded to exceed quantity supplied. 
D) All of the above are correct. 
A) results in a surplus. 
B) is set above the equilibrium price. 
C) causes quantity demanded to exceed quantity supplied. 
D) All of the above are correct.

Question 14

A tax on buyers decreases demand.

Accepted Answer

A) True 
 B)False

Question 15

Table 6-1
 $$\begin{array} { | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Quantity } \
\text { Denanded }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Sugplied }
\end{array} \
\hline \$ [ 12 & 12 & 0 \
\hline \$ 1 & 10 & 2 \
\hline \$ 2 & 8 & 4 \
\hline \$ 3 & 6 & 6 \
\hline \$ 4 & 4 & 8 \
\hline \$ 5 & 2 & 10 \
\hline \$ 6 & 0 & 12 \
\hline
\end{array}$$
-Refer to Table 6-1. Which of the following price floors would be binding in this market?

Accepted Answer

A) $1 
B) $2 
C) $3 
D) $4 
A) $1 
B) $2 
C) $3 
D) $4

Question 16

Figure 6-21  
-Refer to Figure 6-21. The amount of the tax per unit is

Accepted Answer

A) $1. 
B) $1.50. 
C) $2. 
D) $3. 
A) $1. 
B) $1.50. 
C) $2. 
D) $3.

Question 17

A price floor will be binding only if it is set

Accepted Answer

A) equal to the equilibrium price. 
B) above the equilibrium price. 
C) below the equilibrium price. 
D) either above or below the equilibrium price. 
A) equal to the equilibrium price. 
B) above the equilibrium price. 
C) below the equilibrium price. 
D) either above or below the equilibrium price.

Question 18

One common example of a price floor is the minimum wage.

Accepted Answer

A) True 
 B)False

Question 19

The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor proposes to collect half the tax from workers and half the tax from firms. Workers will bear

Accepted Answer

A) an equal share of the tax in comparison to firms. 
B) a greater share of the tax in comparison to firms. 
C) a smaller share of the tax in comparison to firms. 
D) All of the above are possible. 
A) an equal share of the tax in comparison to firms. 
B) a greater share of the tax in comparison to firms. 
C) a smaller share of the tax in comparison to firms. 
D) All of the above are possible.

Question 20

The minimum wage has its greatest impact on the market for

Accepted Answer

A) female labor. 
B) older labor. 
C) black labor. 
D) teenage labor. 
A) female labor. 
B) older labor. 
C) black labor. 
D) teenage labor.

Exam 6: Supply, Demand, and Government Policies

Figure 6-2 -Refer to Figure 6-2. The price ceiling

Price ceilings are typically imposed to benefit sellers.

A tax imposed on the sellers of a good will

Figure 6-4 -Refer to Figure 6-4. A government-imposed price of $16 in this market could be an example of a (i) Binding price ceiling.(ii) Non-binding price ceiling.(iii) Binding price floor.(iv) Non-binding price floor.

When a tax is placed on the sellers of cell phones, the size of the cell phone market

How does elasticity affect the burden of a tax? Justify your answer using supply and demand diagrams.

Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Figure 6-20 -Refer to Figure 6-20. The price paid by buyers after the tax is imposed is

Suppose that a tax is placed on books. If the buyers pay the majority of the tax, then we know that the

An outcome that can result from either a price ceiling or a price floor is

Under rent control, bribery is a mechanism to

The goal of rent control is to help the poor by making housing more affordable.

To say that a price ceiling is nonbinding is to say that the price ceiling

A tax on buyers decreases demand.

Table 6-1 Price Quantity Denanded Quantity Sugplied \ [12 12 0 \ 1 10 2 \ 2 8 4 \ 3 6 6 \ 4 4 8 \ 5 2 10 \ 6 0 12 -Refer to Table 6-1. Which of the following price floors would be binding in this market?

Figure 6-21 -Refer to Figure 6-21. The amount of the tax per unit is

A price floor will be binding only if it is set

One common example of a price floor is the minimum wage.

The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor proposes to collect half the tax from workers and half the tax from firms. Workers will bear

The minimum wage has its greatest impact on the market for

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

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 Macroeconomic Models

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

Six Debates Over Macroeconomic Policy

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