Question 1

A binding price floor causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 2

Advocates of the minimum wage

Accepted Answer

A)  deny that the minimum wage produces any adverse effects. 
B)  emphasize the benefits to teenagers of increases in the minimum wage. 
C)  emphasize the low annual incomes of those who work for the minimum wage. 
D)  All of the above are correct. 
A)  deny that the minimum wage produces any adverse effects. 
B)  emphasize the benefits to teenagers of increases in the minimum wage. 
C)  emphasize the low annual incomes of those who work for the minimum wage. 
D)  All of the above are correct.

Question 3

Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

Accepted Answer

A) True 
 B)False

Question 4

When free markets ration goods with prices,it is both efficient and impersonal.

Accepted Answer

A) True 
 B)False

Question 5

A tax on buyers usually causes buyers to pay more the good and sellers to receive less for the good than they did before the tax was levied.

Accepted Answer

A) True 
 B)False

Question 6

When a binding price ceiling is imposed on a market to benefit buyers,

Accepted Answer

A)  no buyers actually do benefit. 
B)  some buyers benefit,but no buyers are harmed. 
C)  some buyers benefit and some buyers are harmed. 
D)  all buyers benefit. 
A)  no buyers actually do benefit. 
B)  some buyers benefit,but no buyers are harmed. 
C)  some buyers benefit and some buyers are harmed. 
D)  all buyers benefit.

Question 7

When a binding price ceiling is imposed on a market for a good,some people who want to buy the good cannot do so.

Accepted Answer

A) True 
 B)False

Question 8

If a price ceiling of $2 per gallon is imposed on gasoline,and the market equilibrium price is $1.50,then the price ceiling is a binding constraint on the market.

Accepted Answer

A) True 
 B)False

Question 9

Minimum-wage laws dictate

Accepted Answer

A)  the exact wage that firms must pay workers. 
B)  a maximum wage that firms may pay workers. 
C)  a minimum wage that firms may pay workers. 
D)  a minimum wage and a maximum wage that firms may pay workers. 
A)  the exact wage that firms must pay workers. 
B)  a maximum wage that firms may pay workers. 
C)  a minimum wage that firms may pay workers. 
D)  a minimum wage and a maximum wage that firms may pay workers.

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

The primary effect of rent control in the short run is to reduce rents.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a result of rent control?

Accepted Answer

A)  fewer new apartments offered for rent 
B)  less maintenance provided by landlords 
C)  bribery 
D)  higher quality housing 
A)  fewer new apartments offered for rent 
B)  less maintenance provided by landlords 
C)  bribery 
D)  higher quality housing

Question 13

A tax imposed on the buyers of a good will

Accepted Answer

A)  raise the price paid by buyers and lower the equilibrium quantity. 
B)  raise the price paid by buyers and raise the equilibrium quantity. 
C)  raise the effective price received by sellers and lower the equilibrium quantity. 
D)  raise the effective price received by sellers and raise the equilibrium quantity. 
A)  raise the price paid by buyers and lower the equilibrium quantity. 
B)  raise the price paid by buyers and raise the equilibrium quantity. 
C)  raise the effective price received by sellers and lower the equilibrium quantity. 
D)  raise the effective price received by sellers and raise the equilibrium quantity.

Question 14

When a binding price ceiling is imposed on a market to benefit buyers,

Accepted Answer

A)  every buyer in the market benefits. 
B)  every seller in the market benefits,too. 
C)  every buyer who wants to buy the good will be able to do so,but only if they wait in long lines. 
D)  some buyers will not be able to buy any amount of the good. 
A)  every buyer in the market benefits. 
B)  every seller in the market benefits,too. 
C)  every buyer who wants to buy the good will be able to do so,but only if they wait in long lines. 
D)  some buyers will not be able to buy any amount of the good.

Question 15

Which of the following is not correct?

Accepted Answer

A)  The economy contains many labor markets for different types of workers. 
B)  The impact of the minimum wage depends on the skill and experience of the worker. 
C)  The minimum wage is binding for workers with high skills and much experience. 
D)  The minimum wage is not binding when the equilibrium wage is above the minimum wage. 
A)  The economy contains many labor markets for different types of workers. 
B)  The impact of the minimum wage depends on the skill and experience of the worker. 
C)  The minimum wage is binding for workers with high skills and much experience. 
D)  The minimum wage is not binding when the equilibrium wage is above the minimum wage.

Question 16

A tax burden falls more heavily on the side of the market that

Accepted Answer

A)  has a fewer number of participants. 
B)  is more inelastic. 
C)  is closer to unit elastic. 
D)  is less inelastic. 
A)  has a fewer number of participants. 
B)  is more inelastic. 
C)  is closer to unit elastic. 
D)  is less inelastic.

Question 17

Figure 6-9  
-Refer to Figure 6-9.The price that buyers pay after the tax is imposed is

Accepted Answer

A)  $5. 
B)  $6. 
C)  $7. 
D)  $8. 
A)  $5. 
B)  $6. 
C)  $7. 
D)  $8.

Question 18

Figure 6-3  
-Refer to Figure 6-3.If the government imposes a price ceiling of $12 on this market,then there will be a

Accepted Answer

A)  shortage of 0. 
B)  shortage of 10. 
C)  shortage of 20. 
D)  shortage of 40. 
A)  shortage of 0. 
B)  shortage of 10. 
C)  shortage of 20. 
D)  shortage of 40.

Question 19

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 20

Table 6-2
  
-Refer to Table 6-2.Which of the following statements is correct?

Accepted Answer

A)  A price floor set at $5 will be binding and will result in a surplus of 50 units. 
B)  A price floor set at $5 will be binding and will result in a surplus of 75 units. 
C)  A price floor set at $5 will be binding and will result in a surplus of 125 units. 
D)  A price floor set at $5 will not be binding. 
A)  A price floor set at $5 will be binding and will result in a surplus of 50 units. 
B)  A price floor set at $5 will be binding and will result in a surplus of 75 units. 
C)  A price floor set at $5 will be binding and will result in a surplus of 125 units. 
D)  A price floor set at $5 will not be binding.

Exam 6: Supply, Demand, and Government Policies

A binding price floor causes a shortage in the market.

Advocates of the minimum wage

Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

When free markets ration goods with prices,it is both efficient and impersonal.

A tax on buyers usually causes buyers to pay more the good and sellers to receive less for the good than they did before the tax was levied.

When a binding price ceiling is imposed on a market to benefit buyers,

When a binding price ceiling is imposed on a market for a good,some people who want to buy the good cannot do so.

If a price ceiling of $2 per gallon is imposed on gasoline,and the market equilibrium price is $1.50,then the price ceiling is a binding constraint on the market.

Minimum-wage laws dictate

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

The primary effect of rent control in the short run is to reduce rents.

Which of the following is not a result of rent control?

A tax imposed on the buyers of a good will

When a binding price ceiling is imposed on a market to benefit buyers,

Which of the following is not correct?

A tax burden falls more heavily on the side of the market that

Figure 6-9 -Refer to Figure 6-9.The price that buyers pay after the tax is imposed is

Figure 6-3 -Refer to Figure 6-3.If the government imposes a price ceiling of $12 on this market,then there will be a

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

Table 6-2 -Refer to Table 6-2.Which of the following statements is correct?

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

Filters