Question 1

On Green Island, the demand for pencils is perfectly elastic and the supply of pencils is perfectly inelastic. If a sales tax on pencils is introduced

Accepted Answer

A)  the tax is split evenly between the buyers and sellers. 
B)  the buyers pay the entire tax. 
C)  no one pays the tax. 
D)  the sellers pay the entire tax. 
A)  the tax is split evenly between the buyers and sellers. 
B)  the buyers pay the entire tax. 
C)  no one pays the tax. 
D)  the sellers pay the entire tax.

Question 2

-The above figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling of $1,000 per month, the ceiling will

Accepted Answer

A)  help all renters. 
B)  help some renters and hurt other renters. 
C)  help all landlords. 
D)  have no effect at all on the Bigtown rental market. 
A)  help all renters. 
B)  help some renters and hurt other renters. 
C)  help all landlords. 
D)  have no effect at all on the Bigtown rental market.

Question 3

When a tax is imposed on sellers of a good, the resulting rise in the equilibrium price is usually less than the amount of the tax itself. Why doesn't the equilibrium price rise by the full amount of the tax?

Accepted Answer

Because firms collect taxes from consume

Question 4

-In the above figure, if the government imposed a minimum wage of $8 per hour in this labor market, the increase in the hourly wage for those who are able to keep their jobs is

Accepted Answer

A)  $2 per hour. 
B)  $4 per hour. 
C)  $6 per hour. 
D)  $8 per hour. 
A)  $2 per hour. 
B)  $4 per hour. 
C)  $6 per hour. 
D)  $8 per hour.

Question 5

-In the above figure, the imposition of a $0.25 sales tax on sellers will

Accepted Answer

A)  raise the market price paid by buyers of hotdogs by $0.25. 
B)  lower the market price paid by buyers of hotdogs by $0.25. 
C)  raise the market price paid by buyers of hotdogs by $0.125. 
D)  have no effect on the market price of hot dogs. 
A)  raise the market price paid by buyers of hotdogs by $0.25. 
B)  lower the market price paid by buyers of hotdogs by $0.25. 
C)  raise the market price paid by buyers of hotdogs by $0.125. 
D)  have no effect on the market price of hot dogs.

Question 6

-In the table above, the market is in equilibrium. Then a minimum wage is set at $11 per hour. The number of unemployed workers will be

Accepted Answer

A)  0. 
B)  2 million. 
C)  4 million. 
D)  6 million. 
A)  0. 
B)  2 million. 
C)  4 million. 
D)  6 million.

Question 7

-In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month, which causes a shortage. Suppose that apartments are a normal good and incomes rise. The increase in income

Accepted Answer

A)  decreases the shortage. 
B)  has no effect on the shortage. 
C)  increases the shortage. 
D)  raises the rent. 
A)  decreases the shortage. 
B)  has no effect on the shortage. 
C)  increases the shortage. 
D)  raises the rent.

Question 8

If the elasticities of demand for alcohol, tobacco and gasoline are low and the elasticities of supply are high, then the burden of these taxes (excise taxes) falls more heavily on buyers than on sellers.

Accepted Answer

A) True 
 B)False

Question 9

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The amount of the tax paid by the buyers would be greater than shown in the figure

Accepted Answer

A)  only if the demand was more elastic. 
B)  only if the demand was more inelastic. 
C)  only if the supply was more elastic. 
D)  if either the demand was more inelastic or the supply more elastic. 
A)  only if the demand was more elastic. 
B)  only if the demand was more inelastic. 
C)  only if the supply was more elastic. 
D)  if either the demand was more inelastic or the supply more elastic.

Question 10

-In a supply and demand diagram, illustrate an effective price ceiling, that is, a price ceiling that changes the price and quantity. In the same diagram, also illustrate an effective price floor, that is, a price floor that changes the price and quantity.

Accepted Answer

@#IMG-DLM& As illustrated, an effective price ceil

Question 11

A student wrote: "A production quota is inefficient because it results in overproduction. At the quota quantity, marginal social cost is equal to the market price and marginal social benefit is less than the market price, so marginal social cost exceeds marginal social benefit." If you were the instructor, how would you correct this statement?

Accepted Answer

The student errs in several important re

Question 12

-In the above figure, a rent ceiling of $500 per month would

Accepted Answer

A)  not affect the equilibrium quantity. 
B)  create a shortage. 
C)  raise the rent and cause a surplus. 
D)  reduce the rent and create a surplus. 
A)  not affect the equilibrium quantity. 
B)  create a shortage. 
C)  raise the rent and cause a surplus. 
D)  reduce the rent and create a surplus.

On Green Island, the demand for pencils is perfectly elastic and the supply of pencils is perfectly inelastic. If a sales tax on pencils is introduced

-The above figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling of $1,000 per month, the ceiling will

When a tax is imposed on sellers of a good, the resulting rise in the equilibrium price is usually less than the amount of the tax itself. Why doesn't the equilibrium price rise by the full amount of the tax?

-In the above figure, if the government imposed a minimum wage of $8 per hour in this labor market, the increase in the hourly wage for those who are able to keep their jobs is

-In the above figure, the imposition of a $0.25 sales tax on sellers will

-In the table above, the market is in equilibrium. Then a minimum wage is set at $11 per hour. The number of unemployed workers will be

If the elasticities of demand for alcohol, tobacco and gasoline are low and the elasticities of supply are high, then the burden of these taxes (excise taxes) falls more heavily on buyers than on sellers.

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The amount of the tax paid by the buyers would be greater than shown in the figure

-In a supply and demand diagram, illustrate an effective price ceiling, that is, a price ceiling that changes the price and quantity. In the same diagram, also illustrate an effective price floor, that is, a price floor that changes the price and quantity.

-In the above figure, a rent ceiling of $500 per month would

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 6: Government Actions in Markets

On Green Island, the demand for pencils is perfectly elastic and the supply of pencils is perfectly inelastic. If a sales tax on pencils is introduced

-The above figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling of $1,000 per month, the ceiling will

When a tax is imposed on sellers of a good, the resulting rise in the equilibrium price is usually less than the amount of the tax itself. Why doesn't the equilibrium price rise by the full amount of the tax?

-In the above figure, if the government imposed a minimum wage of $8 per hour in this labor market, the increase in the hourly wage for those who are able to keep their jobs is

-In the above figure, the imposition of a $0.25 sales tax on sellers will

-In the table above, the market is in equilibrium. Then a minimum wage is set at $11 per hour. The number of unemployed workers will be

If the elasticities of demand for alcohol, tobacco and gasoline are low and the elasticities of supply are high, then the burden of these taxes (excise taxes) falls more heavily on buyers than on sellers.

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The amount of the tax paid by the buyers would be greater than shown in the figure

-In a supply and demand diagram, illustrate an effective price ceiling, that is, a price ceiling that changes the price and quantity. In the same diagram, also illustrate an effective price floor, that is, a price floor that changes the price and quantity.

-In the above figure, a rent ceiling of $500 per month would

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters