Question 1

A payroll tax is a

Accepted Answer

A)  fixed number of dollars that every firm must pay to the government for each worker that the firm hires. 
B)  tax that each firm must pay to the government before the firm can hire workers and operate its business. 
C)  tax on the wages that firms pay their workers. 
D)  tax on all wages above the minimum wage. 
A)  fixed number of dollars that every firm must pay to the government for each worker that the firm hires. 
B)  tax that each firm must pay to the government before the firm can hire workers and operate its business. 
C)  tax on the wages that firms pay their workers. 
D)  tax on all wages above the minimum wage.

Question 2

A price ceiling set below the equilibrium price causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 3

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

Accepted Answer

A) True 
 B)False

Question 4

In which of these cases will the tax burden fall most heavily on buyers of the good?

Accepted Answer

A)  The demand curve is relatively steep and the supply curve is relatively flat. 
B)  The demand curve is relatively flat and the supply curve is relatively steep. 
C)  The demand curve and the supply curve are both relatively flat. 
D)  The demand curve and the supply curve are both relatively steep. 
A)  The demand curve is relatively steep and the supply curve is relatively flat. 
B)  The demand curve is relatively flat and the supply curve is relatively steep. 
C)  The demand curve and the supply curve are both relatively flat. 
D)  The demand curve and the supply curve are both relatively steep.

Question 5

If a price floor is not binding,then it will have no effect on the market.

Accepted Answer

A) True 
 B)False

Question 6

A tax on buyers shifts the demand curve to the right.

Accepted Answer

A) True 
 B)False

Question 7

The price received by sellers in a market will increase if the government

Accepted Answer

A)  decreases a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  increases a tax on the good sold in that market. 
D)  imposes a binding price ceiling in that market. 
A)  decreases a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  increases a tax on the good sold in that market. 
D)  imposes a binding price ceiling in that market.

Question 8

A tax on sellers reduces the size of a market.

Accepted Answer

A) True 
 B)False

Question 9

A binding price ceiling causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 10

Economists blame the long lines at gasoline stations in the U.S.in the 1970s on

Accepted Answer

A)  U.S.government regulations pertaining to the price of gasoline. 
B)  the Organization of Petroleum Exporting Countries (OPE
C) . 
C)  major oil companies operating in the U.S. 
D)  consumers who bought gasoline frequently,even when their cars' gasoline tanks were nearly full. 
A)  U.S.government regulations pertaining to the price of gasoline. 
B)  the Organization of Petroleum Exporting Countries (OPE
C) . 
C)  major oil companies operating in the U.S. 
D)  consumers who bought gasoline frequently,even when their cars' gasoline tanks were nearly full.

Question 11

The price paid by buyers in a market will decrease if the government

Accepted Answer

A)  increases a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  decreases a tax on the good sold in that market. 
D)  More than one of the above is correct. 
A)  increases a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  decreases a tax on the good sold in that market. 
D)  More than one of the above is correct.

Question 12

Whether a tax is levied on sellers or buyers,taxes encourage market activity.

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-11  
-Refer to Figure 6-11.Buyers pay how much of the tax per unit?

Accepted Answer

A)  $1. 
B)  $1.50. 
C)  $2.50. 
D)  $3.50. 
A)  $1. 
B)  $1.50. 
C)  $2.50. 
D)  $3.50.

Question 14

If a nonbinding price ceiling is imposed on a market,then

Accepted Answer

A)  the quantity sold in the market will decrease. 
B)  the quantity sold in the market will stay the same. 
C)  the price in the market will increase. 
D)  the price in the market will decrease. 
A)  the quantity sold in the market will decrease. 
B)  the quantity sold in the market will stay the same. 
C)  the price in the market will increase. 
D)  the price in the market will decrease.

Question 15

A surplus results when

Accepted Answer

A)  a nonbinding price floor is imposed on a market. 
B)  a nonbinding price floor is removed from a market. 
C)  a binding price floor is imposed on a market. 
D)  a binding price floor is removed from a market. 
A)  a nonbinding price floor is imposed on a market. 
B)  a nonbinding price floor is removed from a market. 
C)  a binding price floor is imposed on a market. 
D)  a binding price floor is removed from a market.

Question 16

If a tax is levied on the buyers of a product,then there will be a(n)

Accepted Answer

A)  downward shift of the supply curve. 
B)  upward shift of the supply curve. 
C)  movement up and to the right along the supply curve. 
D)  movement down and to the left along the supply curve. 
A)  downward shift of the supply curve. 
B)  upward shift of the supply curve. 
C)  movement up and to the right along the supply curve. 
D)  movement down and to the left along the supply curve.

Question 17

If a nonbinding price floor is imposed on a market,then

Accepted Answer

A)  the quantity sold in the market will decrease. 
B)  the quantity sold in the market will stay the same. 
C)  the price in the market will increase. 
D)  the price in the market will decrease. 
A)  the quantity sold in the market will decrease. 
B)  the quantity sold in the market will stay the same. 
C)  the price in the market will increase. 
D)  the price in the market will decrease.

Question 18

If a price floor is not binding,then

Accepted Answer

A)  there will be a surplus in the market. 
B)  there will be a shortage in the market. 
C)  there will be no effect on the market price or quantity sold. 
D)  the market will be less efficient than it would be without the price floor. 
A)  there will be a surplus in the market. 
B)  there will be a shortage in the market. 
C)  there will be no effect on the market price or quantity sold. 
D)  the market will be less efficient than it would be without the price floor.

Question 19

In the housing market,rent control causes

Accepted Answer

A)  quantity supplied and quantity demanded to fall. 
B)  quantity supplied to fall and quantity demanded to rise. 
C)  quantity supplied to rise and quantity demanded to fall. 
D)  quantity supplied and quantity demanded to rise. 
A)  quantity supplied and quantity demanded to fall. 
B)  quantity supplied to fall and quantity demanded to rise. 
C)  quantity supplied to rise and quantity demanded to fall. 
D)  quantity supplied and quantity demanded to rise.

Question 20

The minimum wage was instituted to ensure workers

Accepted Answer

A)  a middle-class standard of living. 
B)  employment. 
C)  a minimally adequate standard of living. 
D)  unemployment compensation. 
A)  a middle-class standard of living. 
B)  employment. 
C)  a minimally adequate standard of living. 
D)  unemployment compensation.

Exam 6: Supply, Demand, and Government Policies

A payroll tax is a

A price ceiling set below the equilibrium price causes a shortage in the market.

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

In which of these cases will the tax burden fall most heavily on buyers of the good?

If a price floor is not binding,then it will have no effect on the market.

A tax on buyers shifts the demand curve to the right.

The price received by sellers in a market will increase if the government

A tax on sellers reduces the size of a market.

A binding price ceiling causes a shortage in the market.

Economists blame the long lines at gasoline stations in the U.S.in the 1970s on

The price paid by buyers in a market will decrease if the government

Whether a tax is levied on sellers or buyers,taxes encourage market activity.

Figure 6-11 -Refer to Figure 6-11.Buyers pay how much of the tax per unit?

If a nonbinding price ceiling is imposed on a market,then

A surplus results when

If a tax is levied on the buyers of a product,then there will be a(n)

If a nonbinding price floor is imposed on a market,then

If a price floor is not binding,then

In the housing market,rent control causes

The minimum wage was instituted to ensure workers

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

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 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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