Question 1

The effects of rent control in the long run include lower rents and lower-quality housing.

Accepted Answer

A) True 
 B)False

Question 2

A tax imposed on the sellers 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 3

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 4

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

Accepted Answer

A) True 
 B)False

Question 5

A tax on buyers decreases demand.

Accepted Answer

A) True 
 B)False

Question 6

A price ceiling set below the equilibrium price is binding.

Accepted Answer

A) True 
 B)False

Question 7

If a binding price floor is imposed on the market for eBooks, then

Accepted Answer

A)  the demand for eBooks will decrease. 
B)  the supply of eBooks will increase. 
C)  a surplus of eBooks will develop. 
D)  All of the above are correct. 
A)  the demand for eBooks will decrease. 
B)  the supply of eBooks will increase. 
C)  a surplus of eBooks will develop. 
D)  All of the above are correct.

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

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 10

As a rationing mechanism, discrimination according to seller bias is

Accepted Answer

A)  efficient and fair. 
B)  efficient, but potentially unfair. 
C)  inefficient, but fair. 
D)  inefficient and potentially unfair. 
A)  efficient and fair. 
B)  efficient, but potentially unfair. 
C)  inefficient, but fair. 
D)  inefficient and potentially unfair.

Question 11

Unlike minimum wage laws, wage subsidies

Accepted Answer

A)  discourage firms from hiring the working poor. 
B)  cause unemployment. 
C)  help only wealthy workers. 
D)  raise the living standards of the working poor without creating unemployment. 
A)  discourage firms from hiring the working poor. 
B)  cause unemployment. 
C)  help only wealthy workers. 
D)  raise the living standards of the working poor without creating unemployment.

Question 12

In a free, competitive market, what is the rationing mechanism?

Accepted Answer

A)  seller bias 
B)  buyer bias 
C)  government law 
D)  price 
A)  seller bias 
B)  buyer bias 
C)  government law 
D)  price

Question 13

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 14

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Accepted Answer

A)  the supply curve for mopeds shifts downward by $200. 
B)  sellers of mopeds receive $200 less per moped than they were receiving before the tax. 
C)  buyers of mopeds are unaffected by the tax. 
D)  None of the above is correct. 
A)  the supply curve for mopeds shifts downward by $200. 
B)  sellers of mopeds receive $200 less per moped than they were receiving before the tax. 
C)  buyers of mopeds are unaffected by the tax. 
D)  None of the above is correct.

Question 15

Figure 6-16  
-Refer to Figure 6-16. In this market, a minimum wage of $7.25 creates a labor

Accepted Answer

A)  shortage of 2,250 workers. 
B)  shortage of 4,500 workers. 
C)  surplus of 2,250 workers. 
D)  surplus of 4,500 workers. 
A)  shortage of 2,250 workers. 
B)  shortage of 4,500 workers. 
C)  surplus of 2,250 workers. 
D)  surplus of 4,500 workers.

Question 16

Figure 6-5  
-Refer to Figure 6-5. If government imposes a price floor at $9, then the price floor causes

Accepted Answer

A)  quantity demanded to decrease by 40 units. 
B)  quantity supplied to increase by 20 units. 
C)  a surplus of 60 units. 
D)  All of the above are correct. 
A)  quantity demanded to decrease by 40 units. 
B)  quantity supplied to increase by 20 units. 
C)  a surplus of 60 units. 
D)  All of the above are correct.

Question 17

Price is the rationing mechanism in a free, competitive market.

Accepted Answer

A) True 
 B)False

Question 18

A tax on buyers will shift the

Accepted Answer

A)  demand curve upward by the amount of the tax. 
B)  demand curve downward by the amount of the tax. 
C)  supply curve upward by the amount of the tax. 
D)  supply curve downward by the amount of the tax. 
A)  demand curve upward by the amount of the tax. 
B)  demand curve downward by the amount of the tax. 
C)  supply curve upward by the amount of the tax. 
D)  supply curve downward by the amount of the tax.

Question 19

If the government wants to reduce smoking, it should impose a tax on

Accepted Answer

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

Question 20

Figure 6-9  
-Refer to Figure 6-9. At which price would a price floor be binding?

Accepted Answer

A)  $7 
B)  $6 
C)  $4 
D)  $5 
A)  $7 
B)  $6 
C)  $4 
D)  $5

Exam 6: Supply, Demand, and Government Policies

The effects of rent control in the long run include lower rents and lower-quality housing.

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

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

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

A tax on buyers decreases demand.

A price ceiling set below the equilibrium price is binding.

If a binding price floor is imposed on the market for eBooks, then

When a binding price floor is imposed on a market,

As a rationing mechanism, discrimination according to seller bias is

Unlike minimum wage laws, wage subsidies

In a free, competitive market, what is the rationing mechanism?

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $7.25 creates a labor

Figure 6-5 -Refer to Figure 6-5. If government imposes a price floor at $9, then the price floor causes

Price is the rationing mechanism in a free, competitive market.

A tax on buyers will shift the

If the government wants to reduce smoking, it should impose a tax on

Figure 6-9 -Refer to Figure 6-9. At which price would a price floor be binding?

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

Filters