Question 1

A tax on the buyers of popcorn

Accepted Answer

A)  increases the size of the popcorn market. 
B)  decreases the size of the popcorn market. 
C)  has no effect on the size of the popcorn market. 
D)  may increase,decrease,or have no effect on the size of the popcorn market. 
A)  increases the size of the popcorn market. 
B)  decreases the size of the popcorn market. 
C)  has no effect on the size of the popcorn market. 
D)  may increase,decrease,or have no effect on the size of the popcorn market.

Question 2

Figure 6-14  
-Refer to Figure 6-14.Suppose a tax of $2 per unit is imposed on this market.Which of the following is correct?

Accepted Answer

A)  One-fourth of the burden of the tax will fall on buyers and three-fourths of the burden of the tax will fall on sellers. 
B)  One-third of the burden of the tax will fall on buyers and two-thirds of the burden of the tax will fall on sellers. 
C)  One-half of the burden of the tax will fall on buyers and one-half of the burden of the tax will fall on sellers. 
D)  Two-thirds of the burden of the tax will fall on buyers and one-third of the burden of the tax will fall on sellers. 
A)  One-fourth of the burden of the tax will fall on buyers and three-fourths of the burden of the tax will fall on sellers. 
B)  One-third of the burden of the tax will fall on buyers and two-thirds of the burden of the tax will fall on sellers. 
C)  One-half of the burden of the tax will fall on buyers and one-half of the burden of the tax will fall on sellers. 
D)  Two-thirds of the burden of the tax will fall on buyers and one-third of the burden of the tax will fall on sellers.

Question 3

Figure 6-4  
-Refer to Figure 6-4.Which of the following price controls would cause a shortage of 20 units of the good?

Accepted Answer

A)  a price ceiling of $4 
B)  a price ceiling of $5 
C)  a price floor of $7 
D)  a price floor of $8 
A)  a price ceiling of $4 
B)  a price ceiling of $5 
C)  a price floor of $7 
D)  a price floor of $8

Question 4

A price ceiling is

Accepted Answer

A)  often imposed on markets in which "cutthroat competition" would prevail without a price ceiling. 
B)  a legal maximum on the price at which a good can be sold. 
C)  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 ceiling. 
D)  All of the above are correct. 
A)  often imposed on markets in which "cutthroat competition" would prevail without a price ceiling. 
B)  a legal maximum on the price at which a good can be sold. 
C)  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 ceiling. 
D)  All of the above are correct.

Question 5

Which of the following is not correct?

Accepted Answer

A)  Economists have two roles: scientist and policy adviser. 
B)  As scientists,economists develop and test theories to explain the world around them. 
C)  Economic policies rarely have effects that their architects did not intend or anticipate. 
D)  As policy advisers,economists use their theories to help change the world for the better. 
A)  Economists have two roles: scientist and policy adviser. 
B)  As scientists,economists develop and test theories to explain the world around them. 
C)  Economic policies rarely have effects that their architects did not intend or anticipate. 
D)  As policy advisers,economists use their theories to help change the world for the better.

Question 6

To say that a price ceiling is binding is to say that the price ceiling

Accepted Answer

A)  results in a surplus. 
B)  is set above the equilibrium price. 
C)  causes quantity demanded to exceed quantity supplied. 
D)  All of the above are correct. 
A)  results in a surplus. 
B)  is set above the equilibrium price. 
C)  causes quantity demanded to exceed quantity supplied. 
D)  All of the above are correct.

Question 7

Figure 6-11  
-Refer to Figure 6-11.The equilibrium price in the market before the tax is imposed is

Accepted Answer

A)  $3.50. 
B)  $5. 
C)  $6. 
D)  $7. 
A)  $3.50. 
B)  $5. 
C)  $6. 
D)  $7.

Question 8

When government imposes a price ceiling or a price floor on a market,

Accepted Answer

A)  price no longer serves as a rationing device. 
B)  efficiency in the market is enhanced. 
C)  shortages and surpluses are eliminated. 
D)  buyers and sellers both become better off. 
A)  price no longer serves as a rationing device. 
B)  efficiency in the market is enhanced. 
C)  shortages and surpluses are eliminated. 
D)  buyers and sellers both become better off.

Question 9

A tax burden falls more heavily on the side of the market that is less elastic.

Accepted Answer

A) True 
 B)False

Question 10

When a tax is placed on the sellers of a product,the

Accepted Answer

A)  size of the market decreases. 
B)  effective price received by sellers decreases and the price paid by buyers increases. 
C)  supply of the product decreases. 
D)  All of the above are correct. 
A)  size of the market decreases. 
B)  effective price received by sellers decreases and the price paid by buyers increases. 
C)  supply of the product decreases. 
D)  All of the above are correct.

Question 11

When OPEC raised the price of crude oil in the 1970s,it caused the

Accepted Answer

A)  United States' nonbinding price floor on gasoline to become binding. 
B)  United States' binding price floor on gasoline to become nonbinding. 
C)  United States' nonbinding price ceiling on gasoline to become binding. 
D)  United States' binding price ceiling on gasoline to become nonbinding. 
A)  United States' nonbinding price floor on gasoline to become binding. 
B)  United States' binding price floor on gasoline to become nonbinding. 
C)  United States' nonbinding price ceiling on gasoline to become binding. 
D)  United States' binding price ceiling on gasoline to become nonbinding.

Question 12

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

Accepted Answer

A)  the supply curve for motorcycles shifts downward by $500. 
B)  sellers of motorcycles receive $500 less per motorcycle than they were receiving before the tax. 
C)  buyers of motorcycles are unaffected by the tax. 
D)  None of the above is correct. 
A)  the supply curve for motorcycles shifts downward by $500. 
B)  sellers of motorcycles receive $500 less per motorcycle than they were receiving before the tax. 
C)  buyers of motorcycles are unaffected by the tax. 
D)  None of the above is correct.

Question 13

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

Accepted Answer

A)  imposes 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)  decreases a binding price floor in that market. 
A)  imposes 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)  decreases a binding price floor in that market.

Question 14

If a tax is imposed on the buyers of a product,then the tax burden will fall entirely on the buyers.

Accepted Answer

A) True 
 B)False

Question 15

Figure 6-14  
-Refer to Figure 6-14.Suppose a tax of $2 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

Accepted Answer

A)  $3 
B)  between $3 and $5 
C)  between $5 and $7 
D)  $7 
A)  $3 
B)  between $3 and $5 
C)  between $5 and $7 
D)  $7

Question 16

The minimum wage,if it is binding,raises the incomes of

Accepted Answer

A)  no workers. 
B)  only those workers who cannot find jobs. 
C)  only those workers who have jobs. 
D)  all workers. 
A)  no workers. 
B)  only those workers who cannot find jobs. 
C)  only those workers who have jobs. 
D)  all workers.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms.Labor economists believe that

Accepted Answer

A)  lawmakers may have actually achieved their goal,since statistics show that the tax burden is currently equally divided. 
B)  the tax raises too little revenue for the government and so it should be eliminated. 
C)  firms bear most of the burden of the tax. 
D)  workers bear most of the burden of the tax. 
A)  lawmakers may have actually achieved their goal,since statistics show that the tax burden is currently equally divided. 
B)  the tax raises too little revenue for the government and so it should be eliminated. 
C)  firms bear most of the burden of the tax. 
D)  workers bear most of the burden of the tax.

Question 19

A price ceiling set below the equilibrium price causes quantity demanded to exceed quantity supplied.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

A tax on the buyers of popcorn

Figure 6-14 -Refer to Figure 6-14.Suppose a tax of $2 per unit is imposed on this market.Which of the following is correct?

Figure 6-4 -Refer to Figure 6-4.Which of the following price controls would cause a shortage of 20 units of the good?

A price ceiling is

Which of the following is not correct?

To say that a price ceiling is binding is to say that the price ceiling

Figure 6-11 -Refer to Figure 6-11.The equilibrium price in the market before the tax is imposed is

When government imposes a price ceiling or a price floor on a market,

A tax burden falls more heavily on the side of the market that is less elastic.

When a tax is placed on the sellers of a product,the

When OPEC raised the price of crude oil in the 1970s,it caused the

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

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

If a tax is imposed on the buyers of a product,then the tax burden will fall entirely on the buyers.

Figure 6-14 -Refer to Figure 6-14.Suppose a tax of $2 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

The minimum wage,if it is binding,raises the incomes of

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

Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms.Labor economists believe that

A price ceiling set below the equilibrium price causes quantity demanded to exceed quantity supplied.

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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