Question 1

Table 6-2
  
-Refer to Table 6-2. A price floor set at $20 results in

Accepted Answer

A)  75 units sold. 
B)  125 units sold. 
C)  200 units sold. 
D)  275 units sold. 
A)  75 units sold. 
B)  125 units sold. 
C)  200 units sold. 
D)  275 units sold.

Question 2

If a tax is levied on the buyers of a product, then there will be an)

Accepted Answer

A)  downward shift of the supply curve. 
B)  upward shift of the supply curve. 
C)  movement up and to the right along the supply curve. 
D)  movement down and to the left along the supply curve. 
A)  downward shift of the supply curve. 
B)  upward shift of the supply curve. 
C)  movement up and to the right along the supply curve. 
D)  movement down and to the left along the supply curve.

Question 3

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 ceiling of $4 on this market, then there will be

Accepted Answer

A)  no shortage. 
B)  a shortage of 5 units. 
C)  a shortage of 10 units. 
D)  a shortage of 20 units. 
A)  no shortage. 
B)  a shortage of 5 units. 
C)  a shortage of 10 units. 
D)  a shortage of 20 units.

Question 4

The price paid by buyers in a market will increase if the government 
i) increases a binding price floor in that market.
Ii) increases a binding price ceiling in that market.
Iii) decreases a tax on the good sold in that market.

Accepted Answer

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

Question 5

One common example of a price ceiling is rent control.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

Accepted Answer

A)  frequent rental programs such as "Rent nine times and the tenth rental is free!" 
B)  enhanced maintenance programs to promote the high quality of the cars 
C)  free gasoline given to people as an incentive to a rent a car 
D)  slow replacement of old rental cars with newer ones 
A)  frequent rental programs such as "Rent nine times and the tenth rental is free!" 
B)  enhanced maintenance programs to promote the high quality of the cars 
C)  free gasoline given to people as an incentive to a rent a car 
D)  slow replacement of old rental cars with newer ones

Question 7

Congress intended that

Accepted Answer

A)  the entire FICA tax be paid by workers. 
B)  the entire FICA tax be paid by firms. 
C)  one-quarter of the FICA tax be paid by workers, and three-quarters be paid by firms. 
D)  half the FICA tax be paid by workers, and half be paid by firms. 
A)  the entire FICA tax be paid by workers. 
B)  the entire FICA tax be paid by firms. 
C)  one-quarter of the FICA tax be paid by workers, and three-quarters be paid by firms. 
D)  half the FICA tax be paid by workers, and half be paid by firms.

Question 8

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 9

Figure 6-26  
-Refer to Figure 6-26. The per-unit burden of the tax is

Accepted Answer

A)  $2 for buyers and $6 for sellers. 
B)  $4 for buyers and $4 for sellers. 
C)  $6 for buyers and $2 for sellers. 
D)  $8 for buyers and $0 for sellers. 
A)  $2 for buyers and $6 for sellers. 
B)  $4 for buyers and $4 for sellers. 
C)  $6 for buyers and $2 for sellers. 
D)  $8 for buyers and $0 for sellers.

Question 10

Table 6-2
  
-Refer to Table 6-2. A price ceiling set at $5 results in

Accepted Answer

A)  50 units sold. 
B)  250 units sold. 
C)  300 units sold. 
D)  350 units sold. 
A)  50 units sold. 
B)  250 units sold. 
C)  300 units sold. 
D)  350 units sold.

Question 11

The tax burden will fall most heavily on buyers of the good when the demand curve

Accepted Answer

A)  is relatively steep, and the supply curve is relatively flat. 
B)  is relatively flat, and the supply curve is relatively steep. 
C)  and the supply curve are both relatively flat. 
D)  and the supply curve are both relatively steep. 
A)  is relatively steep, and the supply curve is relatively flat. 
B)  is relatively flat, and the supply curve is relatively steep. 
C)  and the supply curve are both relatively flat. 
D)  and the supply curve are both relatively steep.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Workers determine the supply of labor, and firms determine the demand for labor.

Accepted Answer

A) True 
 B)False

Question 14

Scenario 6-1
Suppose that demand in the market for good X is given by the equation   and that supply in the market for good X is given by the equation  
-Refer to Scenario 6-1. If the government set a price floor at $13, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at

Question 15

In a free market, the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

Accepted Answer

A) True 
 B)False

Question 16

If the government levies a $5 tax per ticket on buyers of NFL game tickets, then the price paid by buyers of NFL game tickets would

Accepted Answer

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

Question 17

The Federal Insurance Contribution Act (FICA) tax is an example of a(n)

Accepted Answer

A)  payroll tax. 
B)  sales tax. 
C)  farm subsidy. 
D)  income subsidy. 
A)  payroll tax. 
B)  sales tax. 
C)  farm subsidy. 
D)  income subsidy.

Question 18

If the supply curve is more price elastic than the demand 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 buyers will bear

Question 19

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 20

A tax on buyers shifts the demand curve and the supply curve.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

Table 6-2 -Refer to Table 6-2. A price floor set at $20 results in

If a tax is levied on the buyers of a product, then there will be an)

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 ceiling of $4 on this market, then there will be

The price paid by buyers in a market will increase if the government i) increases a binding price floor in that market. Ii) increases a binding price ceiling in that market. Iii) decreases a tax on the good sold in that market.

One common example of a price ceiling is rent control.

Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

Congress intended that

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 6-26 -Refer to Figure 6-26. The per-unit burden of the tax is

Table 6-2 -Refer to Table 6-2. A price ceiling set at $5 results in

The tax burden will fall most heavily on buyers of the good when the demand curve

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

Workers determine the supply of labor, and firms determine the demand for labor.

Scenario 6-1 Suppose that demand in the market for good X is given by the equation and that supply in the market for good X is given by the equation -Refer to Scenario 6-1. If the government set a price floor at $13, would there be a shortage or surplus, and how large would be the shortage/surplus?

In a free market, the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

If the government levies a $5 tax per ticket on buyers of NFL game tickets, then the price paid by buyers of NFL game tickets would

The Federal Insurance Contribution Act (FICA) tax is an example of a(n)

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

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

A tax on buyers shifts the demand curve and the supply curve.

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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