Question 1

When a binding price ceiling is imposed on a market for a good, some people who want to buy the good cannot do so.

Accepted Answer

A) True 
 B)False

Question 2

If a tax is levied on the sellers of flour, then

Accepted Answer

A)  buyers will bear the entire burden of the tax. 
B)  sellers will bear the entire burden of the tax. 
C)  buyers and sellers will share the burden of the tax. 
D)  the government will bear the entire burden of the tax. 
A)  buyers will bear the entire burden of the tax. 
B)  sellers will bear the entire burden of the tax. 
C)  buyers and sellers will share the burden of the tax. 
D)  the government will bear the entire burden of the tax.

Question 3

When a tax is placed on the sellers of cell phones, the size of the cell phone market

Accepted Answer

A)  and the price paid by buyers both increase. 
B)  increases, but the price paid by buyers decreases. 
C)  decreases, but the price paid by buyers increases. 
D)  and the price paid by buyers both decrease. 
A)  and the price paid by buyers both increase. 
B)  increases, but the price paid by buyers decreases. 
C)  decreases, but the price paid by buyers increases. 
D)  and the price paid by buyers both decrease.

Question 4

A minimum wage that is set below a market's equilibrium wage will

Accepted Answer

A)  result in an excess demand for labor, that is, unemployment. 
B)  result in an excess demand for labor, that is, a shortage of workers. 
C)  result in an excess supply of labor, that is, unemployment. 
D)  have no impact on employment. 
A)  result in an excess demand for labor, that is, unemployment. 
B)  result in an excess demand for labor, that is, a shortage of workers. 
C)  result in an excess supply of labor, that is, unemployment. 
D)  have no impact on employment.

Question 5

Price controls

Accepted Answer

A)  always produce a fair outcome. 
B)  always produce an efficient outcome. 
C)  can generate inequities of their own. 
D)  All of the above are correct. 
A)  always produce a fair outcome. 
B)  always produce an efficient outcome. 
C)  can generate inequities of their own. 
D)  All of the above are correct.

Question 6

Figure 6-25  
-Refer to Figure 6-25. The price that buyers pay 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 7

Figure 6-31  
-Refer to Figure 6-31. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

There woul

Question 8

Price ceilings are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 9

States in the U.S. may mandate minimum wages above the federal level.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Table 6-3
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 $2 above the equilibrium price in this market.
  
-Refer to Table 6-3. Following the imposition of a price floor $2 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 12

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

Accepted Answer

A) True 
 B)False

Question 13

A tax burden falls more heavily on the side of the market that

Accepted Answer

A)  has a fewer number of participants. 
B)  is more inelastic. 
C)  is closer to unit elastic. 
D)  is less inelastid. 
A)  has a fewer number of participants. 
B)  is more inelastic. 
C)  is closer to unit elastic. 
D)  is less inelastid.

Question 14

Figure 6-11  
-Refer to Figure 6-11. If the government imposes a price ceiling at $6, it would be

Accepted Answer

A)  binding if market demand is Demand A or Demand B. 
B)  non-binding if market demand is Demand A or Demand B. 
C)  binding if market demand is Demand A and non-binding if market demand is Demand c. 
D)  non-binding if market demand is Demand A and binding if market demand is Demand B. 
A)  binding if market demand is Demand A or Demand B. 
B)  non-binding if market demand is Demand A or Demand B. 
C)  binding if market demand is Demand A and non-binding if market demand is Demand c. 
D)  non-binding if market demand is Demand A and binding if market demand is Demand B.

Question 15

Figure 6-33  
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market?

Accepted Answer

The burden

Question 16

If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Accepted Answer

The sellers will bea

Question 17

Figure 6-15  
-Refer to Figure 6-15. Suppose a price ceiling of $2 is imposed on this market. As a result,

Accepted Answer

A)  the quantity of the good supplied decreases by 30 units. 
B)  the demand curve shifts to the left so as to now pass through the point (quantity = 30, price = $2). 
C)  buyers' total expenditure on the good decreases by $75. 
D)  buyers' total expenditure on the good falls by $15. 
A)  the quantity of the good supplied decreases by 30 units. 
B)  the demand curve shifts to the left so as to now pass through the point (quantity = 30, price = $2). 
C)  buyers' total expenditure on the good decreases by $75. 
D)  buyers' total expenditure on the good falls by $15.

Question 18

Figure 6-25  
-Refer to Figure 6-25. 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 19

Not all sellers benefit from a binding price floor.

Accepted Answer

A) True 
 B)False

Question 20

Figure 6-23
  
-Refer to Figure 6-23. For every unit of the good that is sold, sellers are required to send

Accepted Answer

A)  one dollar to the government, and buyers are required to send two dollars to the government. 
B)  two dollars to the government, and buyers are required to send one dollar to the government. 
C)  three dollars to the government, and buyers are required to send nothing to the government. 
D)  nothing to the government, and buyers are required to send two dollars to the government. 
A)  one dollar to the government, and buyers are required to send two dollars to the government. 
B)  two dollars to the government, and buyers are required to send one dollar to the government. 
C)  three dollars to the government, and buyers are required to send nothing to the government. 
D)  nothing to the government, and buyers are required to send two dollars to the government.

Exam 6: Supply, Demand, and Government Policies

When a binding price ceiling is imposed on a market for a good, some people who want to buy the good cannot do so.

If a tax is levied on the sellers of flour, then

When a tax is placed on the sellers of cell phones, the size of the cell phone market

A minimum wage that is set below a market's equilibrium wage will

Price controls

Figure 6-25 -Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Figure 6-31 -Refer to Figure 6-31. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Price ceilings are typically imposed to benefit sellers.

States in the U.S. may mandate minimum wages above the federal level.

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

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

A tax burden falls more heavily on the side of the market that

Figure 6-11 -Refer to Figure 6-11. If the government imposes a price ceiling at $6, it would be

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market?

If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Figure 6-15 -Refer to Figure 6-15. Suppose a price ceiling of $2 is imposed on this market. As a result,

Figure 6-25 -Refer to Figure 6-25. The effective price that sellers receive after the tax is imposed is

Not all sellers benefit from a binding price floor.

Figure 6-23 -Refer to Figure 6-23. For every unit of the good that is sold, sellers are required to send

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

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