Question 1

A tax imposed on the buyers of a good will lower the

Accepted Answer

A)  price paid by buyers and lower the equilibrium quantity. 
B)  price paid by buyers and raise the equilibrium quantity. 
C)  effective price received by sellers and lower the equilibrium quantity. 
D)  effective price received by sellers and raise the equilibrium quantity. 
A)  price paid by buyers and lower the equilibrium quantity. 
B)  price paid by buyers and raise the equilibrium quantity. 
C)  effective price received by sellers and lower the equilibrium quantity. 
D)  effective price received by sellers and raise the equilibrium quantity.

Question 2

Figure 6-1
Panel a) Panel b)
    
-Refer to Figure 6-1. In which panels) 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 3

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 4

If a tax is levied on the buyers of a product, then the demand curve will

Accepted Answer

A)  not shift. 
B)  shift down. 
C)  shift up. 
D)  become flatter. 
A)  not shift. 
B)  shift down. 
C)  shift up. 
D)  become flatter.

Question 5

To be binding, a price floor must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 6

A binding minimum wage raises the incomes of some workers, but it lowers the incomes of workers who cannot find jobs.

Accepted Answer

A) True 
 B)False

Question 7

Rent-control laws dictate

Accepted Answer

A)  the exact rent that landlords must charge tenants. 
B)  a maximum rent that landlords may charge tenants. 
C)  a minimum rent that landlords may charge tenants. 
D)  both a minimum rent and a maximum rent that landlords may charge tenants. 
A)  the exact rent that landlords must charge tenants. 
B)  a maximum rent that landlords may charge tenants. 
C)  a minimum rent that landlords may charge tenants. 
D)  both a minimum rent and a maximum rent that landlords may charge tenants.

Question 8

Figure 6-36  
-Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer pays $4.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Accepted Answer

A)  a binding price floor 
B)  a binding price ceiling 
C)  a tax on the good 
D)  All of the above are correct. 
A)  a binding price floor 
B)  a binding price ceiling 
C)  a tax on the good 
D)  All of the above are correct.

Question 10

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

Accepted Answer

A)  waiting lists 
B)  race 
C)  price 
D)  bribes 
A)  waiting lists 
B)  race 
C)  price 
D)  bribes

Question 11

If the government levies a $5 tax per MP3 player on buyers of MP3 players, then the price paid by buyers of MP3 players would likely

Accepted Answer

A)  increase by more than $5. 
B)  increase by exactly $5. 
C)  increase by less than $5. 
D)  decrease. 
A)  increase by more than $5. 
B)  increase by exactly $5. 
C)  increase by less than $5. 
D)  decrease.

Question 12

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Accepted Answer

A) True 
 B)False

Question 13

If the government wants to reduce the burning of fossil fuels, it should impose a tax on

Accepted Answer

A)  buyers of gasoline. 
B)  sellers of gasoline. 
C)  either buyers or sellers of gasoline. 
D)  whichever side of the market is less elastic. 
A)  buyers of gasoline. 
B)  sellers of gasoline. 
C)  either buyers or sellers of gasoline. 
D)  whichever side of the market is less elastic.

Question 14

Price floors are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 15

A shortage results when a

Accepted Answer

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

Question 16

The minimum wage is an example of a

Accepted Answer

A)  price ceiling. 
B)  price floor. 
C)  wage subsidy. 
D)  tax. 
A)  price ceiling. 
B)  price floor. 
C)  wage subsidy. 
D)  tax.

Question 17

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 18

A nonbinding price floor 
i) causes a surplus.
Ii) causes a shortage.
Iii) is set at a price above the equilibrium price.
Iv) is set at a price below the equilibrium price.

Accepted Answer

A)  iii) only 
B)  iv) only 
C)  i) and iii) only 
D)  ii) and iv) only 
A)  iii) only 
B)  iv) only 
C)  i) and iii) only 
D)  ii) and iv) only

Question 19

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 20

Figure 6-35  
-Refer to Figure 6-35. A price ceiling set at $70 would create a shortage of 40 units.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

A tax imposed on the buyers of a good will lower the

Figure 6-1 Panel a) Panel b) -Refer to Figure 6-1. In which panels) of the figure would there be a shortage of the good at the price ceiling?

As rationing mechanisms, prices

If a tax is levied on the buyers of a product, then the demand curve will

To be binding, a price floor must be set above the equilibrium price.

A binding minimum wage raises the incomes of some workers, but it lowers the incomes of workers who cannot find jobs.

Rent-control laws dictate

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer pays $4.

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

If the government levies a $5 tax per MP3 player on buyers of MP3 players, then the price paid by buyers of MP3 players would likely

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

If the government wants to reduce the burning of fossil fuels, it should impose a tax on

Price floors are typically imposed to benefit sellers.

A shortage results when a

The minimum wage is an example of a

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

A nonbinding price floor i) causes a surplus. Ii) causes a shortage. Iii) is set at a price above the equilibrium price. Iv) is set at a price below the equilibrium price.

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

Figure 6-35 -Refer to Figure 6-35. A price ceiling set at $70 would create a shortage of 40 units.

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 Costs of Production

Firms in Competitive Markets

Monopoly

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

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