Question 1

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 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

If a price floor is not binding,then

Accepted Answer

A) there will be a surplus in the market. 
B) there will be a shortage in the market. 
C) there will be no effect on the market price or quantity sold. 
D) the market will be less efficient than it would be without the price floor. 
A) there will be a surplus in the market. 
B) there will be a shortage in the market. 
C) there will be no effect on the market price or quantity sold. 
D) the market will be less efficient than it would be without the price floor.

Question 4

If a price floor is a binding constraint on a market,then

Accepted Answer

A) the equilibrium price must be above the price floor. 
B) the quantity demanded must exceed the quantity supplied. 
C) sellers cannot sell all they want to sell at the price floor. 
D) buyers cannot buy all they want to buy at the price floor. 
A) the equilibrium price must be above the price floor. 
B) the quantity demanded must exceed the quantity supplied. 
C) sellers cannot sell all they want to sell at the price floor. 
D) buyers cannot buy all they want to buy at the price floor.

Question 5

Which of the following is not correct?

Accepted Answer

A) Some states in the U.S.mandate minimum wages above the federal level. 
B) Most European nations have minimum-wage laws. 
C) The U.S.minimum wage is significantly higher than the minimum wages in France and the United Kingdom. 
D) The U.S.Congress first instituted a minimum wage with the Fair Labor Standards Act. 
A) Some states in the U.S.mandate minimum wages above the federal level. 
B) Most European nations have minimum-wage laws. 
C) The U.S.minimum wage is significantly higher than the minimum wages in France and the United Kingdom. 
D) The U.S.Congress first instituted a minimum wage with the Fair Labor Standards Act.

Question 6

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

Question 7

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) 1 to 3 percent. 
B) 5 to 7 percent. 
C) 10 percent. 
D) None of the above is correct because studies show no decrease in teenage employment. 
A) 1 to 3 percent. 
B) 5 to 7 percent. 
C) 10 percent. 
D) None of the above is correct because studies show no decrease in teenage employment.

Question 8

Minimum-wage laws dictate the

Accepted Answer

A) average price employers must pay for labor. 
B) highest price employers may pay for labor. 
C) lowest price employers may pay for labor. 
D) the highest and lowest prices employers may pay for labor. 
A) average price employers must pay for labor. 
B) highest price employers may pay for labor. 
C) lowest price employers may pay for labor. 
D) the highest and lowest prices employers may pay for labor.

Question 9

To say that a price ceiling is nonbinding is to say that the price ceiling

Accepted Answer

A) results in a surplus. 
B) is set above the equilibrium price. 
C) causes quantity demanded to exceed quantity supplied. 
D) All of the above are correct. 
A) results in a surplus. 
B) is set above the equilibrium price. 
C) causes quantity demanded to exceed quantity supplied. 
D) All of the above are correct.

Question 10

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

Accepted Answer

A) $8 
B) $6 
C) $12 
D) $10 
A) $8 
B) $6 
C) $12 
D) $10

Question 11

A shortage is eliminated when

Accepted Answer

A) ​a binding price ceiling is removed. 
B) ​a binding price ceiling is enacted. 
C) ​a nonbinding price ceiling is repealed. 
D) ​a nonbinding price ceiling is imposed. 
A) ​a binding price ceiling is removed. 
B) ​a binding price ceiling is enacted. 
C) ​a nonbinding price ceiling is repealed. 
D) ​a nonbinding price ceiling is imposed.

Question 12

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

Accepted Answer

A) no buyers actually benefit. 
B) some buyers benefit,but no buyers are harmed. 
C) some buyers benefit,and some buyers are harmed. 
D) all buyers benefit. 
A) no buyers actually benefit. 
B) some buyers benefit,but no buyers are harmed. 
C) some buyers benefit,and some buyers are harmed. 
D) all buyers benefit.

Question 13

Suppose the government has imposed a price floor on cellular phones.Which of the following events could transform the price floor from one that is binding to one that is not binding?

Accepted Answer

A) Cellular phones become less popular. 
B) Traditional land line phones become more expensive. 
C) The components used to produce cellular phones become less expensive. 
D) Firms expect the price of cellular phones to fall in the future. 
A) Cellular phones become less popular. 
B) Traditional land line phones become more expensive. 
C) The components used to produce cellular phones become less expensive. 
D) Firms expect the price of cellular phones to fall in the future.

Question 14

One disadvantage of government subsidies over price controls is that subsidies

Accepted Answer

A) prevent the attainment of equilibrium in the markets in which they are imposed. 
B) make higher taxes necessary. 
C) are always unfair to those with low incomes. 
D) cause unemployment. 
A) prevent the attainment of equilibrium in the markets in which they are imposed. 
B) make higher taxes necessary. 
C) are always unfair to those with low incomes. 
D) cause unemployment.

Question 15

The imposition of a binding price ceiling on a market causes

Accepted Answer

A) quantity demanded to be greater than quantity supplied. 
B) quantity demanded to be less than quantity supplied. 
C) quantity demanded to be equal to quantity supplied. 
D) the price of the good to be greater than its equilibrium price. 
A) quantity demanded to be greater than quantity supplied. 
B) quantity demanded to be less than quantity supplied. 
C) quantity demanded to be equal to quantity supplied. 
D) the price of the good to be greater than its equilibrium price.

Question 16

Under rent control,tenants can expect

Accepted Answer

A) lower rent and higher quality housing. 
B) lower rent and lower quality housing. 
C) higher rent and a shortage of rental housing. 
D) higher rent and a surplus of rental housing. 
A) lower rent and higher quality housing. 
B) lower rent and lower quality housing. 
C) higher rent and a shortage of rental housing. 
D) higher rent and a surplus of rental housing.

Question 17

Figure 6-10  
-Refer to Figure 6-10.A price ceiling set at

Accepted Answer

A) $6 will be binding and will result in a shortage of 10 units. 
B) $6 will be binding and will result in a shortage of 6 units. 
C) $16 will be binding and will result in a shortage of 10 units. 
D) $16 will be binding and will result in a shortage of 4 units. 
A) $6 will be binding and will result in a shortage of 10 units. 
B) $6 will be binding and will result in a shortage of 6 units. 
C) $16 will be binding and will result in a shortage of 10 units. 
D) $16 will be binding and will result in a shortage of 4 units.

Question 18

A binding price floor will reduce a firm's total revenue

Accepted Answer

A) always. 
B) when demand is elastic. 
C) when demand is inelastic. 
D) never. 
A) always. 
B) when demand is elastic. 
C) when demand is inelastic. 
D) never.

Question 19

Suppose the equilibrium price of a physical examination ("physical")by a doctor is $200,and the government imposes a price ceiling of $150 per physical.As a result of the price ceiling,

Accepted Answer

A) the quantity of physicals demanded increases. 
B) there is shortage of physicals. 
C) the quantity of physicals supplied decreases. 
D) All of the above are correct. 
A) the quantity of physicals demanded increases. 
B) there is shortage of physicals. 
C) the quantity of physicals supplied decreases. 
D) All of the above are correct.

Question 20

Figure 6-15  
-Refer to Figure 6-15.For a price ceiling to be binding in this market,it would have to be set at

Accepted Answer

A) any price below $3. 
B) a price between $2 and $3. 
C) a price between $3 and $4. 
D) any price above $3. 
A) any price below $3. 
B) a price between $2 and $3. 
C) a price between $3 and $4. 
D) any price above $3.

Exam 6: Supply Demand and Government Policies: Controls on Prices

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

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

If a price floor is not binding,then

If a price floor is a binding constraint on a market,then

Which of the following is not correct?

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

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

Minimum-wage laws dictate the

To say that a price ceiling is nonbinding is to say that the price ceiling

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

A shortage is eliminated when

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

Suppose the government has imposed a price floor on cellular phones.Which of the following events could transform the price floor from one that is binding to one that is not binding?

One disadvantage of government subsidies over price controls is that subsidies

The imposition of a binding price ceiling on a market causes

Under rent control,tenants can expect

Figure 6-10 -Refer to Figure 6-10.A price ceiling set at

A binding price floor will reduce a firm's total revenue

Suppose the equilibrium price of a physical examination ("physical")by a doctor is $200,and the government imposes a price ceiling of $150 per physical.As a result of the price ceiling,

Figure 6-15 -Refer to Figure 6-15.For a price ceiling to be binding in this market,it would have to be set at

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A