Question 1

In the end, tax incidence:

Accepted Answer

A)  is determined by the policymakers 
B)  falls entirely on the buyers 
C)  depends on the relative elasticities of supply and demand 
D)  falls entirely on the sellers 
A)  is determined by the policymakers 
B)  falls entirely on the buyers 
C)  depends on the relative elasticities of supply and demand 
D)  falls entirely on the sellers

Question 2

The earned income tax credit is an example of:

Accepted Answer

A)  supply and demand 
B)  a policy designed to increase efficiency 
C)  a wage subsidy 
D)  a price control 
A)  supply and demand 
B)  a policy designed to increase efficiency 
C)  a wage subsidy 
D)  a price control

Question 3

Which is the most correct statement about the burden of a tax imposed on buyers of popcorn?

Accepted Answer

A)  buyers bear the entire burden of the tax 
B)  sellers bear the entire burden of the tax 
C)  buyers and sellers share the burden of the tax 
D)  the government bears the entire burden of the tax 
A)  buyers bear the entire burden of the tax 
B)  sellers bear the entire burden of the tax 
C)  buyers and sellers share the burden of the tax 
D)  the government bears the entire burden of the tax

Question 4

A tax on the sellers of coffee will:

Accepted Answer

A)  reduce the equilibrium price of coffee and increase the equilibrium quantity 
B)  increase the equilibrium price of coffee and reduce the equilibrium quantity 
C)  increase the equilibrium price of coffee and increase the equilibrium quantity 
D)  reduce the equilibrium price of coffee and reduce the equilibrium quantity 
A)  reduce the equilibrium price of coffee and increase the equilibrium quantity 
B)  increase the equilibrium price of coffee and reduce the equilibrium quantity 
C)  increase the equilibrium price of coffee and increase the equilibrium quantity 
D)  reduce the equilibrium price of coffee and reduce the equilibrium quantity

Question 5

If Russia puts an export tax on logs and the supply of logs is inelastic and the demand for logs in China is elastic then:

Accepted Answer

A)  Russian sellers will bear most of the burden of the tax 
B)  Chinese buyers will bear most of the burden of the tax 
C)  the Russian sellers and Chinese buyers will share the tax equally 
D)  it is impossible to determine how the burden of the tax will be shared 
A)  Russian sellers will bear most of the burden of the tax 
B)  Chinese buyers will bear most of the burden of the tax 
C)  the Russian sellers and Chinese buyers will share the tax equally 
D)  it is impossible to determine how the burden of the tax will be shared

Question 6

In general, advocates of the minimum wage:

Accepted Answer

A)  believe that there are no adverse effects of minimum-wage laws 
B)  believe that adverse effects are small, and generally a higher minimum wage makes the poor better off 
C)  believe that the minimum wage is the answer to society's economic problems 
D)  are socialists who want to replace the market system with central economic planning 
A)  believe that there are no adverse effects of minimum-wage laws 
B)  believe that adverse effects are small, and generally a higher minimum wage makes the poor better off 
C)  believe that the minimum wage is the answer to society's economic problems 
D)  are socialists who want to replace the market system with central economic planning

Question 7

Price controls are:

Accepted Answer

A)  usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers 
B)  used to make markets more efficient 
C)  nearly always effective in eliminating inequities 
D)  established by firms with monopoly power 
A)  usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers 
B)  used to make markets more efficient 
C)  nearly always effective in eliminating inequities 
D)  established by firms with monopoly power

Question 8

Suppose the government imposes a binding price ceiling on interest rates in the mortgage lending market. What would benefit from such actions and who would bear the costs?

Accepted Answer

People who are able to obtain a loan at

Exam 6: Supply, Demand and Government Policies

In the end, tax incidence:

The earned income tax credit is an example of:

Which is the most correct statement about the burden of a tax imposed on buyers of popcorn?

A tax on the sellers of coffee will:

If Russia puts an export tax on logs and the supply of logs is inelastic and the demand for logs in China is elastic then:

In general, advocates of the minimum wage:

Price controls are:

Suppose the government imposes a binding price ceiling on interest rates in the mortgage lending market. What would benefit from such actions and who would bear the costs?

Ten Lessons From 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

Business Strategy

Competition Policy

Monopolistic Competition

The Markets for the Factors of Production

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

Open-Economy Macroeconomics: Basic Concepts

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

Five Debates Over Macroeconomic Policy

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