Question 1

If a binding price ceiling is imposed on the computer market,then

Accepted Answer

A)  the quantity of computers demanded will increase. 
B)  the quantity of computers supplied will decrease. 
C)  a shortage of computers will develop. 
D)  All of the above are correct. 
A)  the quantity of computers demanded will increase. 
B)  the quantity of computers supplied will decrease. 
C)  a shortage of computers will develop. 
D)  All of the above are correct.

Question 2

A price ceiling will be binding only if it is set

Accepted Answer

A)  equal to the equilibrium price. 
B)  above the equilibrium price. 
C)  below the equilibrium price. 
D)  either above or below the equilibrium price. 
A)  equal to the equilibrium price. 
B)  above the equilibrium price. 
C)  below the equilibrium price. 
D)  either above or below the equilibrium price.

Question 3

Under rent control,tenants can expect

Accepted Answer

A)  lower rent and higher quality housing. 
B)  lower rent and lower quality housing. 
C)  higher rent and a shortage of rental housing. 
D)  higher rent and a surplus of rental housing. 
A)  lower rent and higher quality housing. 
B)  lower rent and lower quality housing. 
C)  higher rent and a shortage of rental housing. 
D)  higher rent and a surplus of rental housing.

Question 4

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

Accepted Answer

A)  $8. 
B)  $10. 
C)  $12. 
D)  $14. 
A)  $8. 
B)  $10. 
C)  $12. 
D)  $14.

Question 5

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

Accepted Answer

A)  $1.00. 
B)  $1.50. 
C)  $2.50. 
D)  $3.50. 
A)  $1.00. 
B)  $1.50. 
C)  $2.50. 
D)  $3.50.

Question 6

Figure 6-15  
-Refer to Figure 6-15.Suppose a tax of $5 per unit is imposed on this market.Which of the following is correct?

Accepted Answer

A)  Buyers and sellers will share the burden of the tax equally. 
B)  Buyers will bear more of the burden of the tax than sellers will. 
C)  Sellers will bear more of the burden of the tax than buyers will. 
D)  Any of the above is possible. 
A)  Buyers and sellers will share the burden of the tax equally. 
B)  Buyers will bear more of the burden of the tax than sellers will. 
C)  Sellers will bear more of the burden of the tax than buyers will. 
D)  Any of the above is possible.

Question 7

The minimum wage is an example of

Accepted Answer

A)  a price ceiling. 
B)  a price floor. 
C)  a wage subsidy. 
D)  a tax. 
A)  a price ceiling. 
B)  a price floor. 
C)  a wage subsidy. 
D)  a tax.

Question 8

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

Accepted Answer

A) True 
 B)False

Question 9

The minimum wage has its greatest impact on the market for

Accepted Answer

A)  female labor. 
B)  older labor. 
C)  black labor. 
D)  teenage labor. 
A)  female labor. 
B)  older labor. 
C)  black labor. 
D)  teenage labor.

Question 10

Under rent control,landlords cease to be responsive to tenants' concerns about the quality of the housing because

Accepted Answer

A)  with rent control,the government guarantees landlords a minimum level of profit. 
B)  they become resigned to the fact that many of their apartments are going to be vacant at any given time. 
C)  with shortages and waiting lists,they have no incentive to maintain and improve their property. 
D)  with rent control,it becomes the government's responsibility to maintain rental housing. 
A)  with rent control,the government guarantees landlords a minimum level of profit. 
B)  they become resigned to the fact that many of their apartments are going to be vacant at any given time. 
C)  with shortages and waiting lists,they have no incentive to maintain and improve their property. 
D)  with rent control,it becomes the government's responsibility to maintain rental housing.

Question 11

A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

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

Question 13

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

Accepted Answer

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

Question 14

Suppose the equilibrium price of a physical examination ("physical")by a doctor is $200,and the government imposes a price floor of $250 per physical.As a result of the price floor,

Accepted Answer

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

Question 15

Which of the following is correct?

Accepted Answer

A)  Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage raises the average wage of teenagers by 10 percent. 
B)  The drop in teenage employment caused by a 10 percent increase in the minimum wage is not significant. 
C)  The minimum wage is more often binding for teenagers than for other members of the labor force. 
D)  Enforcement of minimum-wage laws is perfect. 
A)  Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage raises the average wage of teenagers by 10 percent. 
B)  The drop in teenage employment caused by a 10 percent increase in the minimum wage is not significant. 
C)  The minimum wage is more often binding for teenagers than for other members of the labor force. 
D)  Enforcement of minimum-wage laws is perfect.

Question 16

Rent-control laws dictate a minimum rent that landlords may charge tenants.

Accepted Answer

A) True 
 B)False

Question 17

A $0.10 tax levied on the sellers of chocolate bars will cause the

Accepted Answer

A)  supply curve for chocolate bars to shift down by $0.10. 
B)  supply curve for chocolate bars to shift up by $0.10. 
C)  demand curve for chocolate bars to shift down by $0.10. 
D)  demand curve for chocolate bars to shift up by $0.10. 
A)  supply curve for chocolate bars to shift down by $0.10. 
B)  supply curve for chocolate bars to shift up by $0.10. 
C)  demand curve for chocolate bars to shift down by $0.10. 
D)  demand curve for chocolate bars to shift up by $0.10.

Question 18

A tax imposed on the buyers of a good will

Accepted Answer

A)  raise both the price buyers pay and the effective price sellers receive. 
B)  raise the price buyers pay and lower the effective price sellers receive. 
C)  lower the price buyers pay and raise the effective price sellers receive. 
D)  lower both the price buyers pay and the effective price sellers receive. 
A)  raise both the price buyers pay and the effective price sellers receive. 
B)  raise the price buyers pay and lower the effective price sellers receive. 
C)  lower the price buyers pay and raise the effective price sellers receive. 
D)  lower both the price buyers pay and the effective price sellers receive.

Question 19

If a tax is imposed on a market with inelastic supply and elastic demand,then

Accepted Answer

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

Question 20

A binding price floor causes quantity supplied to be less than quantity demanded.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

If a binding price ceiling is imposed on the computer market,then

A price ceiling will be binding only if it is set

Under rent control,tenants can expect

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

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

Figure 6-15 -Refer to Figure 6-15.Suppose a tax of $5 per unit is imposed on this market.Which of the following is correct?

The minimum wage is an example of

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

The minimum wage has its greatest impact on the market for

Under rent control,landlords cease to be responsive to tenants' concerns about the quality of the housing because

A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

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

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

Suppose the equilibrium price of a physical examination ("physical")by a doctor is $200,and the government imposes a price floor of $250 per physical.As a result of the price floor,

Which of the following is correct?

Rent-control laws dictate a minimum rent that landlords may charge tenants.

A $0.10 tax levied on the sellers of chocolate bars will cause the

A tax imposed on the buyers of a good will

If a tax is imposed on a market with inelastic supply and elastic demand,then

A binding price floor causes quantity supplied to be less than quantity demanded.

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