Question 1

Figure 6-5  
-Refer to Figure 6-5.If the solid horizontal line on the graph represents a price floor,then the price floor is

Accepted Answer

A) binding and creates a surplus of 60 units of the good. 
B) binding and creates a surplus of 20 units of the good. 
C) binding and creates a surplus 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 surplus of 60 units of the good. 
B) binding and creates a surplus of 20 units of the good. 
C) binding and creates a surplus of 40 units of the good. 
D) not binding,and there will be no surplus or shortage of the good.

Question 2

Figure 6-7  
-Refer to Figure 6-7.Which of the following price controls would cause a surplus of 20 units of the good?

Accepted Answer

A) a price ceiling set at $6 
B) a price ceiling set at $5 
C) a price floor set at $9 
D) a price floor set at $8 
A) a price ceiling set at $6 
B) a price ceiling set at $5 
C) a price floor set at $9 
D) a price floor set at $8

Question 3

Figure 6-6  
-Refer to Figure 6-6.Which of the following statements is correct?

Accepted Answer

A) A price ceiling set at $12 would be binding,but a price ceiling set at $8 would not be binding. 
B) A price floor set at $8 would be binding,but a price ceiling set at $8 would not be binding. 
C) A price ceiling set at $9 would result in a surplus. 
D) A price floor set at $11 would result in a surplus. 
A) A price ceiling set at $12 would be binding,but a price ceiling set at $8 would not be binding. 
B) A price floor set at $8 would be binding,but a price ceiling set at $8 would not be binding. 
C) A price ceiling set at $9 would result in a surplus. 
D) A price floor set at $11 would result in a surplus.

Question 4

Figure 6-1
 
-Refer to Figure 6-1.In which panel(s)of the figure would there be a shortage of the good at the price ceiling?

Accepted Answer

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

Question 5

A surplus results when a

Accepted Answer

A) nonbinding price floor is imposed on a market. 
B) nonbinding price floor is removed from a market. 
C) binding price floor is imposed on a market. 
D) binding price floor is removed from a market. 
A) nonbinding price floor is imposed on a market. 
B) nonbinding price floor is removed from a market. 
C) binding price floor is imposed on a market. 
D) binding price floor is removed from a market.

Question 6

Figure 6-1
 
-Refer to Figure 6-1.A binding price ceiling is shown in

Accepted Answer

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

Question 7

When a binding price floor is imposed on a market,

Accepted Answer

A) price no longer serves as a rationing device. 
B) the quantity supplied at the price floor exceeds the quantity that would have been supplied without the price floor. 
C) only some sellers benefit. 
D) All of the above are correct. 
A) price no longer serves as a rationing device. 
B) the quantity supplied at the price floor exceeds the quantity that would have been supplied without the price floor. 
C) only some sellers benefit. 
D) All of the above are correct.

Question 8

The minimum wage,if it is binding,lowers the incomes of

Accepted Answer

A) no workers. 
B) only those workers who become unemployed. 
C) only those workers who have jobs. 
D) all workers. 
A) no workers. 
B) only those workers who become unemployed. 
C) only those workers who have jobs. 
D) all workers.

Question 9

As rationing mechanisms,prices

Accepted Answer

A) and long lines are efficient. 
B) are efficient,but long lines are inefficient. 
C) are inefficient,but long lines are efficient. 
D) and long lines are inefficient. 
A) and long lines are efficient. 
B) are efficient,but long lines are inefficient. 
C) are inefficient,but long lines are efficient. 
D) and long lines are inefficient.

Question 10

In the short run,rent control causes the quantity supplied

Accepted Answer

A) and quantity demanded to fall. 
B) to fall and quantity demanded to rise. 
C) to rise and quantity demanded to fall. 
D) and quantity demanded to rise. 
A) and quantity demanded to fall. 
B) to fall and quantity demanded to rise. 
C) to rise and quantity demanded to fall. 
D) and quantity demanded to rise.

Question 11

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 12

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 13

Which of the following observations would be consistent with the imposition of a binding price floor on a market? After the price floor becomes effective,

Accepted Answer

A) a smaller quantity of the good is bought and sold. 
B) a larger quantity of the good is demanded. 
C) a smaller quantity of the good is supplied. 
D) the price falls below the equilibrium price. 
A) a smaller quantity of the good is bought and sold. 
B) a larger quantity of the good is demanded. 
C) a smaller quantity of the good is supplied. 
D) the price falls below the equilibrium price.

Question 14

Figure 6-4  
-Refer to Figure 6-4.A government-imposed price of $12 in this market is an example of a

Accepted Answer

A) binding price ceiling that creates a shortage. 
B) non-binding price ceiling that creates a shortage. 
C) binding price floor that creates a surplus. 
D) non-binding price floor that creates a surplus. 
A) binding price ceiling that creates a shortage. 
B) non-binding price ceiling that creates a shortage. 
C) binding price floor that creates a surplus. 
D) non-binding price floor that creates a surplus.

Question 15

Figure 6-12  
-Refer to Figure 6-12.When the price ceiling applies in this market,and the supply curve for gasoline shifts from S1 to S2,the resulting quantity of gasoline that is bought and sold is

Accepted Answer

A) less than Q3. 
B) Q3. 
C) between Q1 and Q3. 
D) at least Q1. 
A) less than Q3. 
B) Q3. 
C) between Q1 and Q3. 
D) at least Q1.

Question 16

​Figure 6-32  
-Refer to Figure 6-32.Which of the following statements is NOT accurate regarding the situation reflected by this diagram?

Accepted Answer

A) ​the price will reflect the scarcity of the good when a price floor is imposed at a price of $8. 
B) ​the price will reflect the scarcity of the good when a price ceiling is imposed at a price of $10. 
C) ​the price will reflect the scarcity of the good when a price ceiling is imposed at a price of $12. 
D) ​the price will reflect the scarcity of the good when a price floor is imposed at a price of $14. 
A) ​the price will reflect the scarcity of the good when a price floor is imposed at a price of $8. 
B) ​the price will reflect the scarcity of the good when a price ceiling is imposed at a price of $10. 
C) ​the price will reflect the scarcity of the good when a price ceiling is imposed at a price of $12. 
D) ​the price will reflect the scarcity of the good when a price floor is imposed at a price of $14.

Question 17

In 2012,the U.S.minimum wage according to federal law was

Accepted Answer

A) $4.25 per hour. 
B) $5.15 per hour. 
C) $5.75 per hour. 
D) $7.25 per hour. 
A) $4.25 per hour. 
B) $5.15 per hour. 
C) $5.75 per hour. 
D) $7.25 per hour.

Question 18

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

Accepted Answer

A) $6 
B) $8 
C) $10 
D) $4 
A) $6 
B) $8 
C) $10 
D) $4

Question 19

When policymakers set prices by legal decree,they

Accepted Answer

A) are usually following the advice of mainstream economists. 
B) improve the organization of economic activity. 
C) obscure the signals that normally guide the allocation of society's resources. 
D) are demonstrating a willingness to sacrifice fairness for the sake of a gain in efficiency. 
A) are usually following the advice of mainstream economists. 
B) improve the organization of economic activity. 
C) obscure the signals that normally guide the allocation of society's resources. 
D) are demonstrating a willingness to sacrifice fairness for the sake of a gain in efficiency.

Question 20

When OPEC raised the price of crude oil in the 1970s,it caused the

Accepted Answer

A) demand for gasoline to increase. 
B) demand for gasoline to decrease. 
C) supply of gasoline to increase. 
D) supply of gasoline to decrease. 
A) demand for gasoline to increase. 
B) demand for gasoline to decrease. 
C) supply of gasoline to increase. 
D) supply of gasoline to decrease.

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

Figure 6-5 -Refer to Figure 6-5.If the solid horizontal line on the graph represents a price floor,then the price floor is

Figure 6-7 -Refer to Figure 6-7.Which of the following price controls would cause a surplus of 20 units of the good?

Figure 6-6 -Refer to Figure 6-6.Which of the following statements is correct?

Figure 6-1 -Refer to Figure 6-1.In which panel(s)of the figure would there be a shortage of the good at the price ceiling?

A surplus results when a

Figure 6-1 -Refer to Figure 6-1.A binding price ceiling is shown in

When a binding price floor is imposed on a market,

The minimum wage,if it is binding,lowers the incomes of

As rationing mechanisms,prices

In the short run,rent control causes the quantity supplied

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

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

Which of the following observations would be consistent with the imposition of a binding price floor on a market? After the price floor becomes effective,

Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $12 in this market is an example of a

Figure 6-12 -Refer to Figure 6-12.When the price ceiling applies in this market,and the supply curve for gasoline shifts from S1 to S2,the resulting quantity of gasoline that is bought and sold is

​Figure 6-32 -Refer to Figure 6-32.Which of the following statements is NOT accurate regarding the situation reflected by this diagram?

In 2012,the U.S.minimum wage according to federal law was

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

When policymakers set prices by legal decree,they

When OPEC raised the price of crude oil in the 1970s,it caused the

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

Figure 6-12 -Refer to Figure 6-12.When the price ceiling applies in this market,and the supply curve for gasoline shifts from S₁ to S₂,the resulting quantity of gasoline that is bought and sold is

Figure 6-32 -Refer to Figure 6-32.Which of the following statements is NOT accurate regarding the situation reflected by this diagram?