Question 1

If a nonbinding price floor is imposed on a market, then the

Accepted Answer

A)  quantity sold in the market will decrease. 
B)  quantity sold in the market will stay the same. 
C)  price in the market will increase. 
D)  price in the market will decrease. 
A)  quantity sold in the market will decrease. 
B)  quantity sold in the market will stay the same. 
C)  price in the market will increase. 
D)  price in the market will decrease.

Question 2

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 3

If a price ceiling is not binding, then it will have no effect on the market.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

A payroll tax is a

Accepted Answer

A)  fixed number of dollars that every firm must pay to the government for each worker that the firm hires. 
B)  tax that each firm must pay to the government before the firm can hire workers and operate its business. 
C)  tax on the wages that firms pay their workers. 
D)  tax on all wages above the minimum wage. 
A)  fixed number of dollars that every firm must pay to the government for each worker that the firm hires. 
B)  tax that each firm must pay to the government before the firm can hire workers and operate its business. 
C)  tax on the wages that firms pay their workers. 
D)  tax on all wages above the minimum wage.

Question 6

A tax on the buyers of sofas

Accepted Answer

A)  increases the size of the sofa market. 
B)  decreases the size of the sofa market. 
C)  has no effect on the size of the sofa market. 
D)  may increase, decrease, or have no effect on the size of the sofa market. 
A)  increases the size of the sofa market. 
B)  decreases the size of the sofa market. 
C)  has no effect on the size of the sofa market. 
D)  may increase, decrease, or have no effect on the size of the sofa market.

Question 7

The price paid by buyers in a market will decrease if the government

Accepted Answer

A)  imposes a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  increases a tax on the good sold in that market. 
D)  decreases a binding price floor in that market. 
A)  imposes a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  increases a tax on the good sold in that market. 
D)  decreases a binding price floor in that market.

Question 8

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 9

Figure 6-34  
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, who will bear the greater burden of the tax - the buyers, the sellers, or will the burden be shared equally?

Accepted Answer

With a $6 tax per unit, the bu

Question 10

Under rent control, tenants can expect

Accepted Answer

A)  lower rent and higher quality housing. 
B)  lower rent and lower quality housing. 
C)  higher rent and a shortage of rental housing. 
D)  higher rent and a surplus of rental housing. 
A)  lower rent and higher quality housing. 
B)  lower rent and lower quality housing. 
C)  higher rent and a shortage of rental housing. 
D)  higher rent and a surplus of rental housing.

Question 11

Suppose that the demand for digital cameras is elastic, and the supply of digital cameras is inelastic. A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

Accepted Answer

A)  less than $10 
B)  $10. 
C)  between $10 and $20. 
D)  $20. 
A)  less than $10 
B)  $10. 
C)  between $10 and $20. 
D)  $20.

Question 12

A tax imposed on the sellers of a good will raise 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 13

In a competitive market free of government regulation,

Accepted Answer

A)  price adjusts until quantity demanded is greater than quantity supplied. 
B)  price adjusts until quantity demanded is less than quantity supplied. 
C)  price adjusts until quantity demanded equals quantity supplied. 
D)  supply adjusts to meet demand at every price. 
A)  price adjusts until quantity demanded is greater than quantity supplied. 
B)  price adjusts until quantity demanded is less than quantity supplied. 
C)  price adjusts until quantity demanded equals quantity supplied. 
D)  supply adjusts to meet demand at every price.

Question 14

After a binding price floor becomes effective, a

Accepted Answer

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)  All of the above are correct. 
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)  All of the above are correct.

Question 15

When a free market for a good reaches equilibrium, anyone who is willing and able to sell at the market price can sell the good.

Accepted Answer

A) True 
 B)False

Question 16

A binding price ceiling 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)  ii) only 
B)  iv) only 
C)  i) and iii) only 
D)  ii) and iv) only 
A)  ii) only 
B)  iv) only 
C)  i) and iii) only 
D)  ii) and iv) only

Question 17

An example of a price floor is

Accepted Answer

A)  the regulation of gasoline prices in the U.S. in the 1970s. 
B)  rent control. 
C)  the minimum wage. 
D)  any restriction on price that leads to a shortage. 
A)  the regulation of gasoline prices in the U.S. in the 1970s. 
B)  rent control. 
C)  the minimum wage. 
D)  any restriction on price that leads to a shortage.

Question 18

How does elasticity affect the burden of a tax? Justify your answer using supply and demand diagrams.

Accepted Answer

@#IMG-DLM& The tax burden fall

Question 19

Figure 6-22  
-Refer to Figure 6-22. The amount of the tax per unit is

Accepted Answer

A)  $2.00. 
B)  $1.50. 
C)  $3.00. 
D)  $0.50. 
A)  $2.00. 
B)  $1.50. 
C)  $3.00. 
D)  $0.50.

Question 20

Figure 6-2  
-Refer to Figure 6-2. The price ceiling causes quantity

Accepted Answer

A)  supplied to exceed quantity demanded by 45 units. 
B)  supplied to exceed quantity demanded by 85 units. 
C)  demanded to exceed quantity supplied by 45 units. 
D)  demanded to exceed quantity supplied by 85 units. 
A)  supplied to exceed quantity demanded by 45 units. 
B)  supplied to exceed quantity demanded by 85 units. 
C)  demanded to exceed quantity supplied by 45 units. 
D)  demanded to exceed quantity supplied by 85 units.

Exam 6: Supply, Demand, and Government Policies

If a nonbinding price floor is imposed on a market, then the

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

If a price ceiling is not binding, then it will have no effect on the market.

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

A payroll tax is a

A tax on the buyers of sofas

The price paid by buyers in a market will decrease if the government

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

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, who will bear the greater burden of the tax - the buyers, the sellers, or will the burden be shared equally?

Under rent control, tenants can expect

Suppose that the demand for digital cameras is elastic, and the supply of digital cameras is inelastic. A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

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

In a competitive market free of government regulation,

After a binding price floor becomes effective, a

When a free market for a good reaches equilibrium, anyone who is willing and able to sell at the market price can sell the good.

A binding price ceiling 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.

An example of a price floor is

How does elasticity affect the burden of a tax? Justify your answer using supply and demand diagrams.

Figure 6-22 -Refer to Figure 6-22. The amount of the tax per unit is

Figure 6-2 -Refer to Figure 6-2. The price ceiling causes quantity

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

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

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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