Question 1

The goal of rent control is to help the poor by making housing more affordable.

Accepted Answer

A) True 
 B)False

Question 2

Figure 6-3
Panel a) Panel b)
    
-Refer to Figure 6-3. In panel a), there will be

Accepted Answer

A)  a shortage. 
B)  equilibrium in the market. 
C)  a surplus. 
D)  lines of people waiting to buy the good. 
A)  a shortage. 
B)  equilibrium in the market. 
C)  a surplus. 
D)  lines of people waiting to buy the good.

Question 3

When a tax is placed on the sellers of cell phones, the size of the cell phone market

Accepted Answer

A)  and the effective price received by sellers both increase. 
B)  increases, but the effective price received by sellers decreases. 
C)  decreases, but the effective price received by sellers increases. 
D)  and the effective price received by sellers both decrease. 
A)  and the effective price received by sellers both increase. 
B)  increases, but the effective price received by sellers decreases. 
C)  decreases, but the effective price received by sellers increases. 
D)  and the effective price received by sellers both decrease.

Question 4

Figure 6-22  
-Refer to Figure 6-22. Suppose the same supply and demand curves apply, and a tax of the same amount per unit as shown here is imposed. Now, however, the buyers of the good, rather than the sellers, are required to pay the tax to the government. After the buyers pay the tax, relative to the case depicted in the figure, the burden on buyers will be

Accepted Answer

A)  larger, and the burden on sellers will be smaller. 
B)  smaller, and the burden on sellers will be larger. 
C)  the same, and the burden on sellers will be the same. 
D)  The relative burdens in the two cases cannot be determined without further information. 
A)  larger, and the burden on sellers will be smaller. 
B)  smaller, and the burden on sellers will be larger. 
C)  the same, and the burden on sellers will be the same. 
D)  The relative burdens in the two cases cannot be determined without further information.

Question 5

Figure 6-28  
-Refer to Figure 6-28. Suppose a tax of $6 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?

Accepted Answer

A)  $4 
B)  between $4 and $7 
C)  between $7 and $10 
D)  $10 
A)  $4 
B)  between $4 and $7 
C)  between $7 and $10 
D)  $10

Question 6

Figure 6-23
  
-Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

Accepted Answer

A)  $3. 
B)  $4. 
C)  $5. 
D)  $6. 
A)  $3. 
B)  $4. 
C)  $5. 
D)  $6.

Question 7

A tax imposed on the sellers of a good will

Accepted Answer

A)  raise both the price buyers pay and the effective price sellers receive. 
B)  raise the price buyers pay and lower the effective price sellers receive. 
C)  lower the price buyers pay and raise the effective price sellers receive. 
D)  lower both the price buyers pay and the effective price sellers receive. 
A)  raise both the price buyers pay and the effective price sellers receive. 
B)  raise the price buyers pay and lower the effective price sellers receive. 
C)  lower the price buyers pay and raise the effective price sellers receive. 
D)  lower both the price buyers pay and the effective price sellers receive.

Question 8

Figure 6-32  
-Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set at $80 wou

Question 9

The minimum wage has its greatest impact on the market for teenage labor.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

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

Question 11

The term tax incidence refers to how the burden of a tax is distributed among the various people who make up the economy.

Accepted Answer

A) True 
 B)False

Question 12

Table 6-1
  
-Refer to Table 6-1. Which of the following price floors would be binding in this market?

Accepted Answer

A)  $70 
B)  $60 
C)  $5 
D)  $40 
A)  $70 
B)  $60 
C)  $5 
D)  $40

Question 13

Figure 6-21  
-Refer to Figure 6-21. The price that buyers pay after the tax is imposed is

Accepted Answer

A)  $8.00. 
B)  $9.00. 
C)  $10.50. 
D)  $12.00. 
A)  $8.00. 
B)  $9.00. 
C)  $10.50. 
D)  $12.00.

Question 14

Taxes levied on sellers and taxes levied on buyers are equivalent.

Accepted Answer

A) True 
 B)False

Question 15

The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 16

Minimum-wage laws are precise policy instruments that can specifically target workers whose family incomes are low.

Accepted Answer

A) True 
 B)False

Question 17

A minimum wage that is set below a market's equilibrium wage will

Accepted Answer

A)  result in an excess demand for labor, that is, unemployment. 
B)  result in an excess demand for labor, that is, a shortage of workers. 
C)  result in an excess supply of labor, that is, unemployment. 
D)  have no impact on employment. 
A)  result in an excess demand for labor, that is, unemployment. 
B)  result in an excess demand for labor, that is, a shortage of workers. 
C)  result in an excess supply of labor, that is, unemployment. 
D)  have no impact on employment.

Question 18

Figure 6-25  
-Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

Accepted Answer

A)  The buyers send the tax payment. 
B)  The sellers send the tax payment. 
C)  A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers. 
D)  The question of who sends the tax payment cannot be determined from the figure. 
A)  The buyers send the tax payment. 
B)  The sellers send the tax payment. 
C)  A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers. 
D)  The question of who sends the tax payment cannot be determined from the figure.

Question 19

If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Accepted Answer

The sellers will bea

Question 20

Table 6-6
  
-Refer to Table 6-6. If the government set a price floor at $2, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at $2 would

Exam 6: Supply, Demand, and Government Policies

The goal of rent control is to help the poor by making housing more affordable.

Figure 6-3 Panel a) Panel b) -Refer to Figure 6-3. In panel a), there will be

When a tax is placed on the sellers of cell phones, the size of the cell phone market

Figure 6-28 -Refer to Figure 6-28. Suppose a tax of $6 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?

Figure 6-23 -Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

A tax imposed on the sellers of a good will

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or surplus, and how large would be the shortage/surplus?

The minimum wage has its greatest impact on the market for teenage labor.

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

The term tax incidence refers to how the burden of a tax is distributed among the various people who make up the economy.

Table 6-1 -Refer to Table 6-1. Which of the following price floors would be binding in this market?

Figure 6-21 -Refer to Figure 6-21. The price that buyers pay after the tax is imposed is

Taxes levied on sellers and taxes levied on buyers are equivalent.

The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

Minimum-wage laws are precise policy instruments that can specifically target workers whose family incomes are low.

A minimum wage that is set below a market's equilibrium wage will

Figure 6-25 -Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Table 6-6 -Refer to Table 6-6. If the government set a price floor at $2, would there be a shortage or surplus, and how large would be the shortage/surplus?

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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