Question 1

Table 6-1
  
-Refer to Table 6-1. Which of the following price floors would be binding in this market?

Accepted Answer

A)  $70 
B)  $60 
C)  $5 
D)  $40 
A)  $70 
B)  $60 
C)  $5 
D)  $40

Question 2

Which of the following statements about the effects of rent control is correct?

Accepted Answer

A)  The short-run effect of rent control is a surplus of apartments, and the long-run effect of rent control is a shortage of apartments. 
B)  The short-run effect of rent control is a relatively small shortage of apartments, and the long-run effect of rent control is a larger shortage of apartments. 
C)  In the long run, rent control leads to a shortage of apartments and an improvement in the quality of available apartments. 
D)  The effects of rent control are very noticeable to the public in the short run because the primary effects of rent control occur very quickly. 
A)  The short-run effect of rent control is a surplus of apartments, and the long-run effect of rent control is a shortage of apartments. 
B)  The short-run effect of rent control is a relatively small shortage of apartments, and the long-run effect of rent control is a larger shortage of apartments. 
C)  In the long run, rent control leads to a shortage of apartments and an improvement in the quality of available apartments. 
D)  The effects of rent control are very noticeable to the public in the short run because the primary effects of rent control occur very quickly.

Question 3

Figure 6-14  
-Refer to Figure 6-14. If the horizontal line on the graph represents a price floor, then the price floor is

Accepted Answer

A)  binding and creates a shortage of 20 units of the good. 
B)  binding and creates a shortage of 40 units of the good. 
C)  not binding but creates a shortage of 40 units of the good. 
D)  not binding, and there will be no surplus or shortage of the good. 
A)  binding and creates a shortage of 20 units of the good. 
B)  binding and creates a shortage of 40 units of the good. 
C)  not binding but creates a shortage of 40 units of the good. 
D)  not binding, and there will be no surplus or shortage of the good.

Question 4

Figure 6-24  
-Refer to Figure 6-24. The price paid by buyers after the tax is imposed is

Accepted Answer

A)  $24. 
B)  21. 
C)  $18. 
D)  $16. 
A)  $24. 
B)  21. 
C)  $18. 
D)  $16.

Question 5

Figure 6-22  
-Refer to Figure 6-22. The price paid by buyers after the tax is imposed is

Accepted Answer

A)  $3.00. 
B)  $3.50. 
C)  $5.00. 
D)  $6.00. 
A)  $3.00. 
B)  $3.50. 
C)  $5.00. 
D)  $6.00.

Question 6

Figure 6-9  
-Refer to Figure 6-9. A price ceiling set at

Accepted Answer

A)  $4 will be binding and will result in a shortage of 8 units. 
B)  $4 will be binding and will result in a shortage of 16 units. 
C)  $7 will be binding and will result in a surplus of 4 units. 
D)  $7 will be binding and will result in a surplus of 8 units. 
A)  $4 will be binding and will result in a shortage of 8 units. 
B)  $4 will be binding and will result in a shortage of 16 units. 
C)  $7 will be binding and will result in a surplus of 4 units. 
D)  $7 will be binding and will result in a surplus of 8 units.

Question 7

In a free, competitive market, what is the rationing mechanism?

Accepted Answer

A)  seller bias 
B)  buyer bias 
C)  government law 
D)  price 
A)  seller bias 
B)  buyer bias 
C)  government law 
D)  price

Question 8

In "Venezuela Versus the Market," the long lines and shortages are caused by

Accepted Answer

A)  declining world energy prices. 
B)  unfettered capitalism. 
C)  price floors that are intended to make food more affordable for the poor. 
D)  price ceilings that are intended to make food more affordable for the poor. 
A)  declining world energy prices. 
B)  unfettered capitalism. 
C)  price floors that are intended to make food more affordable for the poor. 
D)  price ceilings that are intended to make food more affordable for the poor.

Question 9

Figure 6-13
This figure shows the market demand and market supply curves for good X.  
-Refer to Figure 6-13. If the government imposes a price ceiling of $6 on this market, then there will be

Accepted Answer

A)  no shortage. 
B)  a shortage of 5 units. 
C)  a shortage of 10 units. 
D)  a shortage of 20 units. 
A)  no shortage. 
B)  a shortage of 5 units. 
C)  a shortage of 10 units. 
D)  a shortage of 20 units.

Question 10

Price controls can generate inequities.

Accepted Answer

A) True 
 B)False

Question 11

Figure 6-13
This figure shows the market demand and market supply curves for good X.  
-Refer to Figure 6-13. If the government imposes a price floor of $3 on this market, then there will be

Accepted Answer

A)  no surplus. 
B)  a surplus of 10 units. 
C)  a surplus of 15 units. 
D)  a surplus of 20 units. 
A)  no surplus. 
B)  a surplus of 10 units. 
C)  a surplus of 15 units. 
D)  a surplus of 20 units.

Question 12

Figure 6-4  
-Refer to Figure 6-4. A government-imposed price floor of $12 in this market results in

Accepted Answer

A)  a surplus of 2 units. 
B)  a surplus of 4 units. 
C)  12 units sold. 
D)  10 units sold. 
A)  a surplus of 2 units. 
B)  a surplus of 4 units. 
C)  12 units sold. 
D)  10 units sold.

Question 13

Figure 6-33  
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What is the effective price that sellers will receive for the good after the tax is imposed?

Accepted Answer

The effective price

Question 14

Table 6-1
  
-Refer to Table 6-1. Suppose the government imposes a price floor of $70 on this market. What will be the size of the surplus in this market?

Accepted Answer

A)  0 units 
B)  400 units 
C)  600 units 
D)  1000 units 
A)  0 units 
B)  400 units 
C)  600 units 
D)  1000 units

Question 15

Which of the following statements is correct?

Accepted Answer

A)  A tax levied on buyers will never be partially paid by sellers. 
B)  Who actually pays a tax depends on the price elasticities of supply and demand. 
C)  Government can decide who actually pays a tax. 
D)  A tax levied on sellers always will be passed on completely to buyers. 
A)  A tax levied on buyers will never be partially paid by sellers. 
B)  Who actually pays a tax depends on the price elasticities of supply and demand. 
C)  Government can decide who actually pays a tax. 
D)  A tax levied on sellers always will be passed on completely to buyers.

Question 16

When a binding price ceiling is imposed on a market to benefit buyers,

Accepted Answer

A)  every buyer in the market benefits. 
B)  every buyer and seller in the market benefits. 
C)  every buyer who wants to buy the good will be able to do so, but only if he waits in long lines. 
D)  some buyers will not be able to buy any amount of the good. 
A)  every buyer in the market benefits. 
B)  every buyer and seller in the market benefits. 
C)  every buyer who wants to buy the good will be able to do so, but only if he waits in long lines. 
D)  some buyers will not be able to buy any amount of the good.

Question 17

Figure 6-18
The vertical distance between points A and B represents the tax in the market.  
-Refer to Figure 6-18. The effective price that sellers receive after the tax is imposed is

Accepted Answer

A)  $10. 
B)  $6. 
C)  $16. 
D)  $24. 
A)  $10. 
B)  $6. 
C)  $16. 
D)  $24.

Question 18

Suppose that in a particular market, the supply curve is highly elastic and the demand curve is highly inelastic. If a tax is imposed in this market, then the

Accepted Answer

A)  buyers will bear a greater burden of the tax than the sellers. 
B)  sellers will bear a greater burden of the tax than the buyers. 
C)  buyers and sellers are likely to share the burden of the tax equally. 
D)  buyers and sellers will not share the burden equally, but it is impossible to determine who will bear the greater burden of the tax without more information. 
A)  buyers will bear a greater burden of the tax than the sellers. 
B)  sellers will bear a greater burden of the tax than the buyers. 
C)  buyers and sellers are likely to share the burden of the tax equally. 
D)  buyers and sellers will not share the burden equally, but it is impossible to determine who will bear the greater burden of the tax without more information.

Question 19

The burden that results from a tax on yachts falls more heavily on the buyers of yachts than on the sellers of yachts.

Accepted Answer

A) True 
 B)False

Question 20

A large majority of economists favor eliminating the minimum wage.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

Table 6-1 -Refer to Table 6-1. Which of the following price floors would be binding in this market?

Which of the following statements about the effects of rent control is correct?

Figure 6-14 -Refer to Figure 6-14. If the horizontal line on the graph represents a price floor, then the price floor is

Figure 6-24 -Refer to Figure 6-24. The price paid by buyers after the tax is imposed is

Figure 6-22 -Refer to Figure 6-22. The price paid by buyers after the tax is imposed is

Figure 6-9 -Refer to Figure 6-9. A price ceiling set at

In a free, competitive market, what is the rationing mechanism?

In "Venezuela Versus the Market," the long lines and shortages are caused by

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. If the government imposes a price ceiling of $6 on this market, then there will be

Price controls can generate inequities.

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. If the government imposes a price floor of $3 on this market, then there will be

Figure 6-4 -Refer to Figure 6-4. A government-imposed price floor of $12 in this market results in

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What is the effective price that sellers will receive for the good after the tax is imposed?

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price floor of $70 on this market. What will be the size of the surplus in this market?

Which of the following statements is correct?

When a binding price ceiling is imposed on a market to benefit buyers,

Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The effective price that sellers receive after the tax is imposed is

Suppose that in a particular market, the supply curve is highly elastic and the demand curve is highly inelastic. If a tax is imposed in this market, then the

The burden that results from a tax on yachts falls more heavily on the buyers of yachts than on the sellers of yachts.

A large majority of economists favor eliminating the minimum wage.

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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