Question 1

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 2

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

Accepted Answer

A) True 
 B)False

Question 3

If a good or service is sold in a competitive market free of government regulation, then the price of the good or service adjusts to balance supply and demand.

Accepted Answer

A) True 
 B)False

Question 4

The minimum wage

Accepted Answer

A)  is an example of a price ceiling. 
B)  has its greatest impact on middle-aged and immigrant workers. 
C)  does not apply to unpaid internships. 
D)  does not affect the quantity of labor demanded; it only affects the quantity of labor supplied. 
A)  is an example of a price ceiling. 
B)  has its greatest impact on middle-aged and immigrant workers. 
C)  does not apply to unpaid internships. 
D)  does not affect the quantity of labor demanded; it only affects the quantity of labor supplied.

Question 5

Figure 6-6  
-Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism?

Accepted Answer

A)  a price ceiling set at $8 
B)  a price ceiling set at $6 
C)  a price floor set at $8 
D)  a price floor set at $6 
A)  a price ceiling set at $8 
B)  a price ceiling set at $6 
C)  a price floor set at $8 
D)  a price floor set at $6

Question 6

In "Venezuela Versus the Market," the long lines and shortages are caused by

Accepted Answer

A)  declining world energy prices. 
B)  unfettered capitalism. 
C)  price floors that are intended to make food more affordable for the poor. 
D)  price ceilings that are intended to make food more affordable for the poor. 
A)  declining world energy prices. 
B)  unfettered capitalism. 
C)  price floors that are intended to make food more affordable for the poor. 
D)  price ceilings that are intended to make food more affordable for the poor.

Question 7

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 $7, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at

Question 8

The quantity sold in a market will increase if the government

Accepted Answer

A)  decreases a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  decreases a tax on the good sold in that market. 
D)  More than one of the above is correct. 
A)  decreases a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  decreases a tax on the good sold in that market. 
D)  More than one of the above is correct.

Question 9

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 10

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

Accepted Answer

A)  $8 
B)  $7 
C)  $6 
D)  $9 
A)  $8 
B)  $7 
C)  $6 
D)  $9

Question 11

Table 6-1
  
-Refer to Table 6-1. Suppose the government imposes a price floor of $30 on this market. What will be the size of the surplus in this market?

Accepted Answer

A)  0 units 
B)  200 units 
C)  1800 units 
D)  2000 units 
A)  0 units 
B)  200 units 
C)  1800 units 
D)  2000 units

Question 12

Over time, housing shortages caused by rent control

Accepted Answer

A)  increase, because the demand for and supply of housing are less elastic in the long run. 
B)  increase, because the demand for and supply of housing are more elastic in the long run. 
C)  decrease, because the demand for and supply of housing are less elastic in the long run. 
D)  decrease, because the demand for and supply of housing are more elastic in the long run. 
A)  increase, because the demand for and supply of housing are less elastic in the long run. 
B)  increase, because the demand for and supply of housing are more elastic in the long run. 
C)  decrease, because the demand for and supply of housing are less elastic in the long run. 
D)  decrease, because the demand for and supply of housing are more elastic in the long run.

Question 13

When a tax is placed on the sellers of a product, buyers pay

Accepted Answer

A)  more, and sellers receive more than they did before the tax. 
B)  more, and sellers receive less than they did before the tax. 
C)  less, and sellers receive more than they did before the tax. 
D)  less, and sellers receive less than they did before the tax. 
A)  more, and sellers receive more than they did before the tax. 
B)  more, and sellers receive less than they did before the tax. 
C)  less, and sellers receive more than they did before the tax. 
D)  less, and sellers receive less than they did before the tax.

Question 14

Figure 6-1
Panel a) Panel b)
    
-Refer to Figure 6-1. The price ceiling shown in panel a)

Accepted Answer

A)  is not binding. 
B)  creates a surplus. 
C)  creates a shortage. 
D)  Both a) and b) are correct. 
A)  is not binding. 
B)  creates a surplus. 
C)  creates a shortage. 
D)  Both a) and b) are correct.

Question 15

In the housing market, supply and demand are

Accepted Answer

A)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
B)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
C)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
D)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
A)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
B)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
C)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
D)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.

Question 16

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 17

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 $7 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 18

Price controls

Accepted Answer

A)  always produce a fair outcome. 
B)  always produce an efficient outcome. 
C)  can generate inequities of their own. 
D)  All of the above are correct. 
A)  always produce a fair outcome. 
B)  always produce an efficient outcome. 
C)  can generate inequities of their own. 
D)  All of the above are correct.

Question 19

Which of the following would not interfere with market equilibria?

Accepted Answer

A)  a minimum wage 
B)  a rent control 
C)  a non-binding price floor 
D)  a binding price ceiling 
A)  a minimum wage 
B)  a rent control 
C)  a non-binding price floor 
D)  a binding price ceiling

Question 20

Price controls can generate inequities.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

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

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

If a good or service is sold in a competitive market free of government regulation, then the price of the good or service adjusts to balance supply and demand.

The minimum wage

Figure 6-6 -Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism?

In "Venezuela Versus the Market," the long lines and shortages are caused by

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 $7, would there be a shortage or surplus, and how large would be the shortage/surplus?

The quantity sold in a market will increase if the government

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

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

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price floor of $30 on this market. What will be the size of the surplus in this market?

Over time, housing shortages caused by rent control

When a tax is placed on the sellers of a product, buyers pay

Figure 6-1 Panel a) Panel b) -Refer to Figure 6-1. The price ceiling shown in panel a)

In the housing market, supply and demand are

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 6-13 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 $7 on this market, then there will be

Price controls

Which of the following would not interfere with market equilibria?

Price controls can generate inequities.

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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