Question 1

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 2

A minimum wage that is set above a market's equilibrium wage will result in an excess

Accepted Answer

A)  demand for labor, that is, unemployment. 
B)  demand for labor, that is, a shortage of workers. 
C)  supply of labor, that is, unemployment. 
D)  supply of labor, that is, a shortage of workers. 
A)  demand for labor, that is, unemployment. 
B)  demand for labor, that is, a shortage of workers. 
C)  supply of labor, that is, unemployment. 
D)  supply of labor, that is, a shortage of workers.

Question 3

When free markets ration goods with prices, it is both efficient and impersonal.

Accepted Answer

A) True 
 B)False

Question 4

A price floor 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 5

When a tax of $1.00 per gallon is imposed on sellers of gasoline, the supply curve for gasoline shifts upward, but by less than $1.00.

Accepted Answer

A) True 
 B)False

Question 6

Figure 6-34  
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the sellers in this market?

Accepted Answer

With a $6 tax per unit, the am

Question 7

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 8

The price paid by buyers in a market will increase if the government (i) increases a binding price floor in that market.
(ii) increases a binding price ceiling in that market.
(iii) decreases a tax on the good sold in that market.

Accepted Answer

A)  (ii) only 
B)  (iii) only 
C)  (i) and (ii) only 
D)  (i), (ii), and (iii) 
A)  (ii) only 
B)  (iii) only 
C)  (i) and (ii) only 
D)  (i), (ii), and (iii)

Question 9

Table 6-5
  
-Refer to Table 6-5. Suppose the government imposes a price ceiling of $3 on this market. What will be the size of the shortage in this market?

Accepted Answer

A)  0 units 
B)  30 units 
C)  45 units 
D)  75 units 
A)  0 units 
B)  30 units 
C)  45 units 
D)  75 units

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 buyers shifts the demand curve and the supply curve.

Accepted Answer

A) True 
 B)False

Question 12

Tax incidence

Accepted Answer

A)  depends on the legislated burden. 
B)  is entirely random. 
C)  depends on the elasticities of supply and demand. 
D)  falls entirely on buyers or entirely on sellers. 
A)  depends on the legislated burden. 
B)  is entirely random. 
C)  depends on the elasticities of supply and demand. 
D)  falls entirely on buyers or entirely on sellers.

Question 13

Table 6-2
  
-Refer to Table 6-2. A price floor set at $20 results in

Accepted Answer

A)  75 units sold. 
B)  125 units sold. 
C)  200 units sold. 
D)  275 units sold. 
A)  75 units sold. 
B)  125 units sold. 
C)  200 units sold. 
D)  275 units sold.

Question 14

Figure 6-26  
-Refer to Figure 6-26. The per-unit burden of the tax is

Accepted Answer

A)  $2 for buyers and $6 for sellers. 
B)  $4 for buyers and $4 for sellers. 
C)  $6 for buyers and $2 for sellers. 
D)  $8 for buyers and $0 for sellers. 
A)  $2 for buyers and $6 for sellers. 
B)  $4 for buyers and $4 for sellers. 
C)  $6 for buyers and $2 for sellers. 
D)  $8 for buyers and $0 for sellers.

Question 15

When a tax is imposed on the sellers of a good, the supply curve shifts

Accepted Answer

A)  upward by the amount of the tax. 
B)  downward by the amount of the tax. 
C)  upward by less than the amount of the tax. 
D)  downward by less than the amount of the tax. 
A)  upward by the amount of the tax. 
B)  downward by the amount of the tax. 
C)  upward by less than the amount of the tax. 
D)  downward by less than the amount of the tax.

Question 16

A tax on sellers reduces the size of a market.

Accepted Answer

A) True 
 B)False

Question 17

The quantity sold 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)  increases 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)  increases a tax on the good sold in that market. 
D)  More than one of the above is correct.

Question 18

Figure 6-3
Panel (a) Panel (b)
    
-Refer to Figure 6-3. In panel (b), there will be

Accepted Answer

A)  a shortage. 
B)  equilibrium in the market. 
C)  a surplus. 
D)  lines of people waiting to buy the good. 
A)  a shortage. 
B)  equilibrium in the market. 
C)  a surplus. 
D)  lines of people waiting to buy the good.

Question 19

Figure 6-32  
-Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set at $80 wou

Question 20

Opponents of the minimum wage point out that the minimum wage

Accepted Answer

A)  encourages teenagers to drop out of school. 
B)  prevents some workers from getting needed on-the-job training. 
C)  contributes to the problem of unemployment. 
D)  All of the above are correct. 
A)  encourages teenagers to drop out of school. 
B)  prevents some workers from getting needed on-the-job training. 
C)  contributes to the problem of unemployment. 
D)  All of the above are correct.

Exam 6: Supply, Demand, and Government Policies

A tax imposed on the buyers of a good will

A minimum wage that is set above a market's equilibrium wage will result in an excess

When free markets ration goods with prices, it is both efficient and impersonal.

A price floor will be binding only if it is set

When a tax of $1.00 per gallon is imposed on sellers of gasoline, the supply curve for gasoline shifts upward, but by less than $1.00.

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the sellers in this market?

A price ceiling is a legal minimum on the price at which a good or service can be sold.

The price paid by buyers in a market will increase if the government (i) increases a binding price floor in that market. (ii) increases a binding price ceiling in that market. (iii) decreases a tax on the good sold in that market.

Table 6-5 -Refer to Table 6-5. Suppose the government imposes a price ceiling of $3 on this market. What will be the size of the shortage in this market?

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

A tax on buyers shifts the demand curve and the supply curve.

Tax incidence

Table 6-2 -Refer to Table 6-2. A price floor set at $20 results in

Figure 6-26 -Refer to Figure 6-26. The per-unit burden of the tax is

When a tax is imposed on the sellers of a good, the supply curve shifts

A tax on sellers reduces the size of a market.

The quantity sold in a market will increase if the government

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. In panel (b), there will be

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or surplus, and how large would be the shortage/surplus?

Opponents of the minimum wage point out that 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

Filters