Question 1

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

Accepted Answer

A)  demand for gasoline to increase. 
B)  demand for gasoline to decrease. 
C)  supply of gasoline to increase. 
D)  supply of gasoline to decrease. 
A)  demand for gasoline to increase. 
B)  demand for gasoline to decrease. 
C)  supply of gasoline to increase. 
D)  supply of gasoline to decrease.

Question 2

Figure 6-11  
-Refer to Figure 6-11.Suppose the same supply and demand curves apply and a tax of the same amount per unit as shown here is imposed.Now,however,the buyers of the good,rather than the sellers,are required to pay the tax to the government.Now,relative to the case depicted in the figure,

Accepted Answer

A)  the burden on buyers will be larger and the burden on sellers will be smaller. 
B)  the burden on buyers will be smaller and the burden on sellers will be larger. 
C)  the burden on buyers will be the same and the burden on sellers will be the same. 
D)  The relative burdens in the two cases cannot be determined without further information. 
A)  the burden on buyers will be larger and the burden on sellers will be smaller. 
B)  the burden on buyers will be smaller and the burden on sellers will be larger. 
C)  the burden on buyers will be the same and the burden on sellers will be the same. 
D)  The relative burdens in the two cases cannot be determined without further information.

Question 3

Since half of the FICA tax is paid by firms and the other half is paid by workers,the burden of the tax must fall equally on firms and workers.

Accepted Answer

A) True 
 B)False

Question 4

The impact of the minimum wage depends on the skill and experience of the worker.

Accepted Answer

A) True 
 B)False

Question 5

The price received by sellers in a market will increase if the government

Accepted Answer

A)  decreases a binding price floor in that market. 
B)  decreases a binding price ceiling in that market. 
C)  decreases a tax on the good sold in that market. 
D)  None of the above is correct. 
A)  decreases a binding price floor in that market. 
B)  decreases a binding price ceiling in that market. 
C)  decreases a tax on the good sold in that market. 
D)  None of the above is correct.

Question 6

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

Accepted Answer

A)  surplus of 0. 
B)  surplus of 20. 
C)  surplus of 30. 
D)  surplus of 40. 
A)  surplus of 0. 
B)  surplus of 20. 
C)  surplus of 30. 
D)  surplus of 40.

Question 7

Table 6-1
  
-Refer to Table 6-1.Suppose the government imposes a price ceiling of $5 on this market.What will be the size of the shortage in this market?

Accepted Answer

A)  0 units 
B)  2 units 
C)  8 units 
D)  10 units 
A)  0 units 
B)  2 units 
C)  8 units 
D)  10 units

Question 8

A binding price ceiling may not help all consumers,but it does not hurt any consumers.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is correct concerning the burden of a tax imposed on candles?

Accepted Answer

A)  Buyers bear the entire burden of the tax. 
B)  Sellers bear the entire burden of the tax. 
C)  Buyers and sellers share the burden of the tax. 
D)  We have to know whether it is the buyers or the sellers that are required to pay the tax to the government in order to make this determination. 
A)  Buyers bear the entire burden of the tax. 
B)  Sellers bear the entire burden of the tax. 
C)  Buyers and sellers share the burden of the tax. 
D)  We have to know whether it is the buyers or the sellers that are required to pay the tax to the government in order to make this determination.

Question 10

A binding price floor may not help all sellers,but it does not hurt any sellers.

Accepted Answer

A) True 
 B)False

Question 11

If a tax is levied on the buyers of a product,then there will be a(n)

Accepted Answer

A)  upward shift of the demand curve. 
B)  downward shift of the demand curve. 
C)  movement up and to the left along the demand curve. 
D)  movement down and to the right along the demand curve. 
A)  upward shift of the demand curve. 
B)  downward shift of the demand curve. 
C)  movement up and to the left along the demand curve. 
D)  movement down and to the right along the demand curve.

Question 12

When a binding price floor is imposed on a market,

Accepted Answer

A)  price no longer serves as a rationing device. 
B)  the quantity supplied at the price floor exceeds the quantity that would have been supplied without the price floor. 
C)  only some sellers benefit. 
D)  All of the above are correct. 
A)  price no longer serves as a rationing device. 
B)  the quantity supplied at the price floor exceeds the quantity that would have been supplied without the price floor. 
C)  only some sellers benefit. 
D)  All of the above are correct.

Question 13

A price ceiling is binding when it is set

Accepted Answer

A)  above the equilibrium price,causing a shortage. 
B)  above the equilibrium price,causing a surplus. 
C)  below the equilibrium price,causing a shortage. 
D)  below the equilibrium price,causing a surplus. 
A)  above the equilibrium price,causing a shortage. 
B)  above the equilibrium price,causing a surplus. 
C)  below the equilibrium price,causing a shortage. 
D)  below the equilibrium price,causing a surplus.

Question 14

A price floor set below the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 15

The quantity sold in a market will decrease if the government

Accepted Answer

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

Question 16

The minimum wage has its greatest impact on the market for teenage labor.

Accepted Answer

A) True 
 B)False

Question 17

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

Accepted Answer

A)  0 percent. 
B)  1 to 3 percent. 
C)  5 to 7 percent. 
D)  10 percent. 
A)  0 percent. 
B)  1 to 3 percent. 
C)  5 to 7 percent. 
D)  10 percent.

Question 18

Which of the following is not correct?

Accepted Answer

A)  In a 2006 survey of Ph.D.economists,47 percent favored eliminating the minimum wage. 
B)  In a 2006 survey of Ph.D.economists,14 percent would maintain the minimum wage at its current level. 
C)  In a 2006 survey of Ph.D.economists,38 percent would increase the minimum wage. 
D)  In a 2006 survey of Ph.D.economists,10 percent would decrease the minimum wage. 
A)  In a 2006 survey of Ph.D.economists,47 percent favored eliminating the minimum wage. 
B)  In a 2006 survey of Ph.D.economists,14 percent would maintain the minimum wage at its current level. 
C)  In a 2006 survey of Ph.D.economists,38 percent would increase the minimum wage. 
D)  In a 2006 survey of Ph.D.economists,10 percent would decrease the minimum wage.

Question 19

A tax imposed on the sellers 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 20

In a free market,the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

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

Figure 6-11 -Refer to Figure 6-11.Suppose the same supply and demand curves apply and a tax of the same amount per unit as shown here is imposed.Now,however,the buyers of the good,rather than the sellers,are required to pay the tax to the government.Now,relative to the case depicted in the figure,

Since half of the FICA tax is paid by firms and the other half is paid by workers,the burden of the tax must fall equally on firms and workers.

The impact of the minimum wage depends on the skill and experience of the worker.

The price received by sellers in a market will increase if the government

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

Table 6-1 -Refer to Table 6-1.Suppose the government imposes a price ceiling of $5 on this market.What will be the size of the shortage in this market?

A binding price ceiling may not help all consumers,but it does not hurt any consumers.

Which of the following statements is correct concerning the burden of a tax imposed on candles?

A binding price floor may not help all sellers,but it does not hurt any sellers.

If a tax is levied on the buyers of a product,then there will be a(n)

When a binding price floor is imposed on a market,

A price ceiling is binding when it is set

A price floor set below the equilibrium price causes a surplus in the market.

The quantity sold in a market will decrease if the government

The minimum wage has its greatest impact on the market for teenage labor.

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

Which of the following is not correct?

A tax imposed on the sellers of a good will

In a free market,the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

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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