Question 1

The quantity sold in a market will decrease if the government decreases a

Accepted Answer

A)  binding price floor in that market. 
B)  binding price ceiling in that market. 
C)  tax on the good sold in that market. 
D)  All of the above are correct. 
A)  binding price floor in that market. 
B)  binding price ceiling in that market. 
C)  tax on the good sold in that market. 
D)  All of the above are correct.

Question 2

Figure 6-31  
-Refer to Figure 6-31. If the government set a price ceiling at $8, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set

Question 3

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 4

When policymakers set prices by legal decree, they obscure the signals that normally guide the allocation of society's resources.

Accepted Answer

A) True 
 B)False

Question 5

Figure 6-3
Panel (a) Panel (b)
    
-Refer to Figure 6-3. A binding price floor is shown in

Accepted Answer

A)  both panel (a) and panel (b). 
B)  panel (a) only. 
C)  panel (b) only. 
D)  neither panel (a) nor panel (b). 
A)  both panel (a) and panel (b). 
B)  panel (a) only. 
C)  panel (b) only. 
D)  neither panel (a) nor panel (b).

Question 6

When a tax is levied on buyers of tea,

Accepted Answer

A)  buyers of tea and sellers of tea both are made worse off. 
B)  buyers of tea are made worse off, and the well-being of sellers is unaffected. 
C)  buyers of tea are made worse off, and sellers of tea are made better off. 
D)  the well-being of both buyers of tea and sellers of tea is unaffected. 
A)  buyers of tea and sellers of tea both are made worse off. 
B)  buyers of tea are made worse off, and the well-being of sellers is unaffected. 
C)  buyers of tea are made worse off, and sellers of tea are made better off. 
D)  the well-being of both buyers of tea and sellers of tea is unaffected.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Table 6-4
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 $3 above the equilibrium price in this market.
  
-Refer to Table 6-4. Following the imposition of a price floor $3 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 9

A price ceiling set below the equilibrium price causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 10

Figure 6-4  
-Refer to Figure 6-4. Which of the following statements is not correct?

Accepted Answer

A)  When the price is $10, quantity supplied equals quantity demanded. 
B)  When the price is $6, there is a surplus of 8 units. 
C)  When the price is $12, there is a surplus of 4 units. 
D)  When the price is $16, quantity supplied exceeds quantity demanded by 12 units. 
A)  When the price is $10, quantity supplied equals quantity demanded. 
B)  When the price is $6, there is a surplus of 8 units. 
C)  When the price is $12, there is a surplus of 4 units. 
D)  When the price is $16, quantity supplied exceeds quantity demanded by 12 units.

Question 11

Table 6-5
  
-Refer to Table 6-5. Which of the following price ceilings would be binding in this market?

Accepted Answer

A)  $3 
B)  $6 
C)  $9 
D)  None of the above price ceilings would be binding. 
A)  $3 
B)  $6 
C)  $9 
D)  None of the above price ceilings would be binding.

Question 12

Figure 6-6  
-Refer to Figure 6-6. If the government imposes a price floor of $10 on this market, then there will be

Accepted Answer

A)  no surplus. 
B)  a surplus of 20 units. 
C)  a surplus of 30 units. 
D)  a surplus of 10 units. 
A)  no surplus. 
B)  a surplus of 20 units. 
C)  a surplus of 30 units. 
D)  a surplus of 10 units.

Question 13

An outcome that can result from either a price ceiling or a price floor is

Accepted Answer

A)  a surplus in the market. 
B)  a shortage in the market. 
C)  a nonbinding price control. 
D)  long lines of frustrated buyers. 
A)  a surplus in the market. 
B)  a shortage in the market. 
C)  a nonbinding price control. 
D)  long lines of frustrated buyers.

Question 14

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. How many units of the good are sold after the imposition of the price floor?

Accepted Answer

A)  5 
B)  9 
C)  10 
D)  15 
A)  5 
B)  9 
C)  10 
D)  15

Question 15

Economists blame the long lines at gasoline stations in the U.S. in the 1970s on

Accepted Answer

A)  U.S. government regulations pertaining to the price of gasoline. 
B)  the Organization of Petroleum Exporting Countries (OPE
C) . 
C)  major oil companies operating in the U.S. 
D)  consumers who bought gasoline frequently, even when their cars' gasoline tanks were nearly full. 
A)  U.S. government regulations pertaining to the price of gasoline. 
B)  the Organization of Petroleum Exporting Countries (OPE
C) . 
C)  major oil companies operating in the U.S. 
D)  consumers who bought gasoline frequently, even when their cars' gasoline tanks were nearly full.

Question 16

Figure 6-36  
-Refer to Figure 6-36. If the government places a $2 tax in the market, the seller bears $2 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 17

Scenario 6-1
Suppose that demand in the market for good X is given by the equation   and that supply in the market for good X is given by the equation  
-Refer to Scenario 6-1. What are the equilibrium price and quantity in the market for good X?

Accepted Answer

The equilibrium pric

Question 18

Figure 6-29
Suppose the government imposes a $2 on this market.  
-Refer to Figure 6-29. Suppose D1 represents the demand curve for gasoline in both the short run and long run, S1 represents the supply curve for gasoline in the short run, and S2 represents the supply curve for gasoline in the long run. After the imposition of the $2, the price paid by buyers will be

Accepted Answer

A)  higher in the long run than in the short run. 
B)  higher in the short run than in the long run. 
C)  equivalent in the short run and the long run. 
D)  unable to be determined without additional information. 
A)  higher in the long run than in the short run. 
B)  higher in the short run than in the long run. 
C)  equivalent in the short run and the long run. 
D)  unable to be determined without additional information.

Question 19

Table 6-5
  
-Refer to Table 6-5. Suppose the government imposes a price floor of $3 on this market. What will be the size of the surplus (or 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 20

A tax on sellers increases the quantity of the good sold in the market.

Accepted Answer

A) True 
 B)False

The quantity sold in a market will decrease if the government decreases a

Figure 6-31 -Refer to Figure 6-31. If the government set a price ceiling at $8, would there be a shortage or surplus, and how large would be the shortage/surplus?

Which of the following is not correct?

When policymakers set prices by legal decree, they obscure the signals that normally guide the allocation of society's resources.

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. A binding price floor is shown in

When a tax is levied on buyers of tea,

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

A price ceiling set below the equilibrium price causes a shortage in the market.

Figure 6-4 -Refer to Figure 6-4. Which of the following statements is not correct?

Table 6-5 -Refer to Table 6-5. Which of the following price ceilings would be binding in this market?

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price floor of $10 on this market, then there will be

An outcome that can result from either a price ceiling or a price floor is

Economists blame the long lines at gasoline stations in the U.S. in the 1970s on

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the seller bears $2 of the tax burden.

Scenario 6-1 Suppose that demand in the market for good X is given by the equation and that supply in the market for good X is given by the equation -Refer to Scenario 6-1. What are the equilibrium price and quantity in the market for good X?

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

A tax on sellers increases the quantity of the good sold in the market.

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

Exam 6: Supply, Demand, and Government Policies

The quantity sold in a market will decrease if the government decreases a

Figure 6-31 -Refer to Figure 6-31. If the government set a price ceiling at $8, would there be a shortage or surplus, and how large would be the shortage/surplus?

Which of the following is not correct?

When policymakers set prices by legal decree, they obscure the signals that normally guide the allocation of society's resources.

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. A binding price floor is shown in

When a tax is levied on buyers of tea,

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

A price ceiling set below the equilibrium price causes a shortage in the market.

Figure 6-4 -Refer to Figure 6-4. Which of the following statements is not correct?

Table 6-5 -Refer to Table 6-5. Which of the following price ceilings would be binding in this market?

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price floor of $10 on this market, then there will be

An outcome that can result from either a price ceiling or a price floor is

Economists blame the long lines at gasoline stations in the U.S. in the 1970s on

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the seller bears $2 of the tax burden.

Scenario 6-1 Suppose that demand in the market for good X is given by the equation and that supply in the market for good X is given by the equation -Refer to Scenario 6-1. What are the equilibrium price and quantity in the market for good X?

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

A tax on sellers increases the quantity of the good sold in the market.

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