Question 1

Long lines

Accepted Answer

A)  and discrimination according to seller bias are both inefficient rationing mechanisms because they both waste buyers' time. 
B)  and discrimination according to seller bias are both inefficient rationing mechanisms because the good does not necessarily go to the buyer who values it most highly. 
C)  are an inefficient rationing mechanism because they waste buyers' time,and discrimination according to seller bias is an inefficient rationing mechanism because the good does not necessarily go to the buyer who values it most highly. 
D)  are an inefficient rationing mechanism because the good does not necessarily go to the buyer who values it most highly,and discrimination according to seller bias is an inefficient rationing mechanism because it wastes buyers' time. 
A)  and discrimination according to seller bias are both inefficient rationing mechanisms because they both waste buyers' time. 
B)  and discrimination according to seller bias are both inefficient rationing mechanisms because the good does not necessarily go to the buyer who values it most highly. 
C)  are an inefficient rationing mechanism because they waste buyers' time,and discrimination according to seller bias is an inefficient rationing mechanism because the good does not necessarily go to the buyer who values it most highly. 
D)  are an inefficient rationing mechanism because the good does not necessarily go to the buyer who values it most highly,and discrimination according to seller bias is an inefficient rationing mechanism because it wastes buyers' time.

Question 2

Lawmakers can decide whether the buyers or the sellers must send a tax to the government,but they cannot legislate the true burden of a tax.

Accepted Answer

A) True 
 B)False

Question 3

In a free,competitive market,what is the rationing mechanism?

Accepted Answer

A)  seller bias 
B)  buyer bias 
C)  government law 
D)  price 
A)  seller bias 
B)  buyer bias 
C)  government law 
D)  price

Question 4

Figure 6-9  
-Refer to Figure 6-9.The effective price that sellers receive 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 5

When a tax is levied on buyers of tea,

Accepted Answer

A)  buyers of tea and sellers of tea both are made worse off. 
B)  buyers of tea are made worse off and the well-being of sellers is unaffected. 
C)  buyers of tea are made worse off and sellers of tea are made better off. 
D)  the well-being of both buyers of tea and sellers of tea is unaffected. 
A)  buyers of tea and sellers of tea both are made worse off. 
B)  buyers of tea are made worse off and the well-being of sellers is unaffected. 
C)  buyers of tea are made worse off and sellers of tea are made better off. 
D)  the well-being of both buyers of tea and sellers of tea is unaffected.

Question 6

The wedge between the buyers' price and the sellers' price is the same,regardless of whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 7

The Federal Insurance Contribution Act (FICA)tax is an example of

Accepted Answer

A)  a payroll tax. 
B)  a sales tax. 
C)  a farm subsidy. 
D)  an income subsidy. 
A)  a payroll tax. 
B)  a sales tax. 
C)  a farm subsidy. 
D)  an income subsidy.

Question 8

Suppose sellers of liquor are required to send $1.00 to the government for every bottle of liquor they sell.Further,suppose this tax causes the price paid by buyers of liquor to rise by $0.80 per bottle.Which of the following statements is correct?

Accepted Answer

A)  This tax causes the supply curve for liquor to shift upward by $1.00 at each quantity of liquor. 
B)  The effective price received by sellers is $0.20 per bottle less than it was before the tax. 
C)  Eighty percent of the burden of the tax falls on buyers. 
D)  All of the above are correct. 
A)  This tax causes the supply curve for liquor to shift upward by $1.00 at each quantity of liquor. 
B)  The effective price received by sellers is $0.20 per bottle less than it was before the tax. 
C)  Eighty percent of the burden of the tax falls on buyers. 
D)  All of the above are correct.

Question 9

Price controls often hurt those they are trying to help.

Accepted Answer

A) True 
 B)False

Question 10

Rent-control laws dictate

Accepted Answer

A)  the exact rent that landlords must charge tenants. 
B)  a maximum rent that landlords may charge tenants. 
C)  a minimum rent that landlords may charge tenants. 
D)  a minimum rent and a maximum rent that landlords may charge tenants. 
A)  the exact rent that landlords must charge tenants. 
B)  a maximum rent that landlords may charge tenants. 
C)  a minimum rent that landlords may charge tenants. 
D)  a minimum rent and a maximum rent that landlords may charge tenants.

Question 11

Table 6-1
  
-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 12

Figure 6-3  
-Refer to Figure 6-3.Which of the following price floors would be binding in this market?

Accepted Answer

A)  $6. 
B)  $8. 
C)  $10. 
D)  $12. 
A)  $6. 
B)  $8. 
C)  $10. 
D)  $12.

Question 13

The goal of rent control is to

Accepted Answer

A)  facilitate controlled economic experiments in urban areas. 
B)  help landlords by assuring them a low vacancy rate for their apartments. 
C)  help the poor by assuring them an adequate supply of apartments. 
D)  help the poor by making housing more affordable. 
A)  facilitate controlled economic experiments in urban areas. 
B)  help landlords by assuring them a low vacancy rate for their apartments. 
C)  help the poor by assuring them an adequate supply of apartments. 
D)  help the poor by making housing more affordable.

Question 14

If a price ceiling is a binding constraint on a market,then

Accepted Answer

A)  the equilibrium price must be below the price ceiling. 
B)  the quantity supplied must exceed the quantity demanded. 
C)  sellers cannot sell all they want to sell at the price ceiling. 
D)  buyers cannot buy all they want to buy at the price ceiling. 
A)  the equilibrium price must be below the price ceiling. 
B)  the quantity supplied must exceed the quantity demanded. 
C)  sellers cannot sell all they want to sell at the price ceiling. 
D)  buyers cannot buy all they want to buy at the price ceiling.

Question 15

Which of the following causes a surplus of a good?

Accepted Answer

A)  a binding price floor 
B)  a binding price ceiling 
C)  a tax on the good 
D)  More than one of the above is correct. 
A)  a binding price floor 
B)  a binding price ceiling 
C)  a tax on the good 
D)  More than one of the above is correct.

Question 16

The proportion of minimum-wage earners who are in families with incomes below the poverty line is

Accepted Answer

A)  less than one-third. 
B)  between one-third and one-half. 
C)  between one-half and two-thirds. 
D)  greater than two-thirds. 
A)  less than one-third. 
B)  between one-third and one-half. 
C)  between one-half and two-thirds. 
D)  greater than two-thirds.

Question 17

Price controls

Accepted Answer

A)  always produce a fair outcome. 
B)  always produce an efficient outcome. 
C)  can generate inequities of their own. 
D)  Both (a)and (b)are correct. 
A)  always produce a fair outcome. 
B)  always produce an efficient outcome. 
C)  can generate inequities of their own. 
D)  Both (a)and (b)are correct.

Question 18

A tax imposed on the buyers of a good will

Accepted Answer

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

Question 19

When policymakers set prices by legal decree,they obscure the signals that normally guide the allocation of society's resources.

Accepted Answer

A) True 
 B)False

Question 20

When a tax is placed on the buyers of cell phones,

Accepted Answer

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

Exam 6: Supply, Demand, and Government Policies

Long lines

Lawmakers can decide whether the buyers or the sellers must send a tax to the government,but they cannot legislate the true burden of a tax.

In a free,competitive market,what is the rationing mechanism?

Figure 6-9 -Refer to Figure 6-9.The effective price that sellers receive after the tax is imposed is

When a tax is levied on buyers of tea,

The wedge between the buyers' price and the sellers' price is the same,regardless of whether the tax is levied on buyers or sellers.

The Federal Insurance Contribution Act (FICA)tax is an example of

Suppose sellers of liquor are required to send $1.00 to the government for every bottle of liquor they sell.Further,suppose this tax causes the price paid by buyers of liquor to rise by $0.80 per bottle.Which of the following statements is correct?

Price controls often hurt those they are trying to help.

Rent-control laws dictate

Table 6-1 -Refer to Table 6-1.Which of the following price floors would be binding in this market?

Figure 6-3 -Refer to Figure 6-3.Which of the following price floors would be binding in this market?

The goal of rent control is to

If a price ceiling is a binding constraint on a market,then

Which of the following causes a surplus of a good?

The proportion of minimum-wage earners who are in families with incomes below the poverty line is

Price controls

A tax imposed on the buyers of a good will

When policymakers set prices by legal decree,they obscure the signals that normally guide the allocation of society's resources.

When a tax is placed on the buyers of cell phones,

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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