Question 1

The effects of rent control in the long run include lower rents and lower-quality housing.

Accepted Answer

A) True 
 B)False

Question 2

Figure 6-4  
-Refer to Figure 6-4.For a price floor to be binding in this market,it would have to be set at

Accepted Answer

A)  any price below $6. 
B)  a price between $3 and $6. 
C)  a price between $6 and $9. 
D)  any price above $6. 
A)  any price below $6. 
B)  a price between $3 and $6. 
C)  a price between $6 and $9. 
D)  any price above $6.

Question 3

When a binding price floor is imposed on a market to benefit sellers,

Accepted Answer

A)  every seller in the market benefits. 
B)  every buyer in the market benefits,too. 
C)  every seller who wants to sell the good will be able to do so,but only if they appeal to the personal biases of the buyers. 
D)  some sellers will not be able to sell any amount of the good. 
A)  every seller in the market benefits. 
B)  every buyer in the market benefits,too. 
C)  every seller who wants to sell the good will be able to do so,but only if they appeal to the personal biases of the buyers. 
D)  some sellers will not be able to sell any amount of the good.

Question 4

If the demand curve is very elastic and the supply curve is very inelastic in a market,then the sellers will bear a greater burden of a tax imposed on the market,even if the tax is imposed on the buyers.

Accepted Answer

A) True 
 B)False

Question 5

A price floor is

Accepted Answer

A)  a legal minimum on the price at which a good can be sold. 
B)  often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price floor. 
C)  a source of inefficiency in a market. 
D)  All of the above are correct. 
A)  a legal minimum on the price at which a good can be sold. 
B)  often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price floor. 
C)  a source of inefficiency in a market. 
D)  All of the above are correct.

Question 6

Figure 6-9  
-Refer to Figure 6-9.The equilibrium price in the market before the tax is imposed is

Accepted Answer

A)  $1. 
B)  $2. 
C)  $5. 
D)  $6. 
A)  $1. 
B)  $2. 
C)  $5. 
D)  $6.

Question 7

Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Accepted Answer

A) True 
 B)False

Question 8

Figure 6-3  
-Refer to Figure 6-3.In which of the following cases would sellers have to develop a rationing mechanism?

Accepted Answer

A)  A price ceiling is set at $8. 
B)  A price ceiling is set at $12. 
C)  A price floor is set at $8. 
D)  A price floor is set at $12. 
A)  A price ceiling is set at $8. 
B)  A price ceiling is set at $12. 
C)  A price floor is set at $8. 
D)  A price floor is set at $12.

Question 9

Figure 6-3  
-Refer to Figure 6-3.Which of the following statements is correct?

Accepted Answer

A)  A price ceiling set at $12 would be binding,but a price ceiling set at $8 would not be binding. 
B)  A price floor set at $8 would be binding,but a price ceiling set at $8 would not be binding. 
C)  A price ceiling set at $9 would result in a surplus. 
D)  A price floor set at $11 would result in a surplus. 
A)  A price ceiling set at $12 would be binding,but a price ceiling set at $8 would not be binding. 
B)  A price floor set at $8 would be binding,but a price ceiling set at $8 would not be binding. 
C)  A price ceiling set at $9 would result in a surplus. 
D)  A price floor set at $11 would result in a surplus.

Question 10

The term tax incidence refers to

Accepted Answer

A)  whether buyers or sellers of a good are required to send tax payments to the government. 
B)  whether the demand curve or the supply curve shifts when the tax is imposed. 
C)  the distribution of the tax burden between buyers and sellers. 
D)  widespread view that taxes always will be a fact of life. 
A)  whether buyers or sellers of a good are required to send tax payments to the government. 
B)  whether the demand curve or the supply curve shifts when the tax is imposed. 
C)  the distribution of the tax burden between buyers and sellers. 
D)  widespread view that taxes always will be a fact of life.

Question 11

If the government passes a law requiring buyers of motorcycles to send $500 to the government for every motorcycle they buy,then

Accepted Answer

A)  the demand curve for motorcycles shifts downward by $500. 
B)  buyers of motorcycles pay $500 more per motorcycle than they were paying before the tax. 
C)  sellers of motorcycles are unaffected by the tax. 
D)  All of the above are correct. 
A)  the demand curve for motorcycles shifts downward by $500. 
B)  buyers of motorcycles pay $500 more per motorcycle than they were paying before the tax. 
C)  sellers of motorcycles are unaffected by the tax. 
D)  All of the above are correct.

Question 12

Figure 6-15  
-Refer to Figure 6-15.Suppose a tax of $5 per unit is imposed on this market.What will be the new equilibrium quantity in this market?

Accepted Answer

A)  less than 25 units 
B)  25 units 
C)  between 25 units and 50 units 
D)  greater than 50 units 
A)  less than 25 units 
B)  25 units 
C)  between 25 units and 50 units 
D)  greater than 50 units

Question 13

Table 6-4
The following table contains the demand schedule and supply schedule for a market for a particular good.Suppose sellers of the good successfully lobby Congress to impose a price floor $3 above the equilibrium price in this market.
  
-Refer to Table 6-4.Following the imposition of a price floor $3 above the equilibrium price,irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor.The resulting market price is

Accepted Answer

A)  $2. 
B)  $3. 
C)  $4. 
D)  $5. 
A)  $2. 
B)  $3. 
C)  $4. 
D)  $5.

Question 14

Suppose the equilibrium price of a physical examination ("physical")by a doctor is $200,and the government imposes a price ceiling of $150 per physical.As a result of the price ceiling,

Accepted Answer

A)  the demand curve for physicals shifts to the right. 
B)  the supply curve for physicals shifts to the left. 
C)  the quantity demanded of physicals increases and the quantity supplied of physicals decreases. 
D)  the number of physicals performed stays the same. 
A)  the demand curve for physicals shifts to the right. 
B)  the supply curve for physicals shifts to the left. 
C)  the quantity demanded of physicals increases and the quantity supplied of physicals decreases. 
D)  the number of physicals performed stays the same.

Question 15

If the government removes a binding price floor from a market,then the price paid by buyers will

Accepted Answer

A)  increase and the quantity sold in the market will increase. 
B)  increase and the quantity sold in the market will decrease. 
C)  decrease and the quantity sold in the market will increase. 
D)  decrease and the quantity sold in the market will decrease. 
A)  increase and the quantity sold in the market will increase. 
B)  increase and the quantity sold in the market will decrease. 
C)  decrease and the quantity sold in the market will increase. 
D)  decrease and the quantity sold in the market will decrease.

Question 16

The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run.

Accepted Answer

A) True 
 B)False

Question 17

Figure 6-16
Panel (a)Panel (b)     Panel (c)  
-Refer to Figure 6-16.In which market will the majority of the tax burden fall on sellers?

Accepted Answer

A)  market (a) 
B)  market (b) 
C)  market (c) 
D)  All of the above are correct. 
A)  market (a) 
B)  market (b) 
C)  market (c) 
D)  All of the above are correct.

Question 18

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Accepted Answer

A)  price will no longer be the mechanism that rations scarce resources. 
B)  long lines of buyers may develop. 
C)  sellers could ration the good or service according to their own personal biases. 
D)  All of the above are correct. 
A)  price will no longer be the mechanism that rations scarce resources. 
B)  long lines of buyers may develop. 
C)  sellers could ration the good or service according to their own personal biases. 
D)  All of the above are correct.

Question 19

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour,then a shortage of labor will exist.

Accepted Answer

A) True 
 B)False

Question 20

A tax on the buyers of TVs

Accepted Answer

A)  leads sellers to supply a smaller quantity at every price. 
B)  leads buyers to demand a smaller quantity at every price. 
C)  leads buyers to demand a larger quantity at every price. 
D)  Both (a)and (b)are correct. 
A)  leads sellers to supply a smaller quantity at every price. 
B)  leads buyers to demand a smaller quantity at every price. 
C)  leads buyers to demand a larger quantity at every price. 
D)  Both (a)and (b)are correct.

Exam 6: Supply, Demand, and Government Policies

The effects of rent control in the long run include lower rents and lower-quality housing.

Figure 6-4 -Refer to Figure 6-4.For a price floor to be binding in this market,it would have to be set at

When a binding price floor is imposed on a market to benefit sellers,

If the demand curve is very elastic and the supply curve is very inelastic in a market,then the sellers will bear a greater burden of a tax imposed on the market,even if the tax is imposed on the buyers.

A price floor is

Figure 6-9 -Refer to Figure 6-9.The equilibrium price in the market before the tax is imposed is

Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Figure 6-3 -Refer to Figure 6-3.In which of the following cases would sellers have to develop a rationing mechanism?

Figure 6-3 -Refer to Figure 6-3.Which of the following statements is correct?

The term tax incidence refers to

If the government passes a law requiring buyers of motorcycles to send $500 to the government for every motorcycle they buy,then

Figure 6-15 -Refer to Figure 6-15.Suppose a tax of $5 per unit is imposed on this market.What will be the new equilibrium quantity in this market?

Suppose the equilibrium price of a physical examination ("physical")by a doctor is $200,and the government imposes a price ceiling of $150 per physical.As a result of the price ceiling,

If the government removes a binding price floor from a market,then the price paid by buyers will

The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run.

Figure 6-16 Panel (a)Panel (b) Panel (c) -Refer to Figure 6-16.In which market will the majority of the tax burden fall on sellers?

In response to a shortage caused by the imposition of a binding price ceiling on a market,

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour,then a shortage of labor will exist.

A tax on the buyers of TVs

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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