Question 1

Figure 6-20  
-Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)  $5 
B)  between $5 and $10 
C)  between $10 and $14 
D)  $14 
A)  $5 
B)  between $5 and $10 
C)  between $10 and $14 
D)  $14

Question 2

Figure 6-24  
-Refer to Figure 6-24. Andrew is a buyer of the good. Taking the tax into account, how much does Andrew effectively pay to acquire one unit of the good?

Accepted Answer

A)  $16 
B)  $18 
C)  $24 
D)  $26 
A)  $16 
B)  $18 
C)  $24 
D)  $26

Question 3

Regardless of whether a tax is levied on sellers or buyers, taxes encourage market activity.

Accepted Answer

A) True 
 B)False

Question 4

The imposition of a binding price ceiling on a market causes

Accepted Answer

A)  quantity demanded to be greater than quantity supplied. 
B)  quantity demanded to be less than quantity supplied. 
C)  quantity demanded to be equal to quantity supplied. 
D)  the price of the good to be greater than its equilibrium price. 
A)  quantity demanded to be greater than quantity supplied. 
B)  quantity demanded to be less than quantity supplied. 
C)  quantity demanded to be equal to quantity supplied. 
D)  the price of the good to be greater than its equilibrium price.

Question 5

The long-run effects of rent controls are a good illustration of the principle that

Accepted Answer

A)  society faces a short-run tradeoff between unemployment and inflation. 
B)  the cost of something is what you give up to get it. 
C)  people respond to incentives. 
D)  government can sometimes improve on market outcomes. 
A)  society faces a short-run tradeoff between unemployment and inflation. 
B)  the cost of something is what you give up to get it. 
C)  people respond to incentives. 
D)  government can sometimes improve on market outcomes.

Question 6

Figure 6-33  
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What is the effective price that sellers will receive for the good after the tax is imposed?

Accepted Answer

The effective price

Question 7

A $0.10 tax levied on the sellers of chocolate bars will cause the

Accepted Answer

A)  supply curve for chocolate bars to shift down by $0.10. 
B)  supply curve for chocolate bars to shift up by $0.10. 
C)  demand curve for chocolate bars to shift down by $0.10. 
D)  demand curve for chocolate bars to shift up by $0.10. 
A)  supply curve for chocolate bars to shift down by $0.10. 
B)  supply curve for chocolate bars to shift up by $0.10. 
C)  demand curve for chocolate bars to shift down by $0.10. 
D)  demand curve for chocolate bars to shift up by $0.10.

Question 8

Suppose the government has imposed a price ceiling on sliced sandwich bread. Which of the following events could transform the price ceiling from one that is binding to one that is not binding?

Accepted Answer

A)  An increase in the price of flour, which is used to make bread. 
B)  A decrease in the price of lunch meat. 
C)  A decease in the price of unsliced bread, which people consider as a substitute for sliced bread. 
D)  An decrease in the price of peanut butter and jelly. 
A)  An increase in the price of flour, which is used to make bread. 
B)  A decrease in the price of lunch meat. 
C)  A decease in the price of unsliced bread, which people consider as a substitute for sliced bread. 
D)  An decrease in the price of peanut butter and jelly.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

A price floor set below the equilibrium price causes quantity supplied to exceed quantity demanded.

Accepted Answer

A) True 
 B)False

Question 11

Figure 6-31  
-Refer to Figure 6-31. If the government set a price ceiling at $8, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set

Question 12

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Accepted Answer

A) True 
 B)False

Question 13

Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elastic. A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

Accepted Answer

A)  less than $0.50. 
B)  $0.50. 
C)  between $0.50 and $1. 
D)  $1. 
A)  less than $0.50. 
B)  $0.50. 
C)  between $0.50 and $1. 
D)  $1.

Question 14

Table 6-5
  
-Refer to Table 6-5. Suppose the government imposes a price floor of $3 on this market. What will be the size of the surplus or shortage) in this market?

Accepted Answer

A)  0 units 
B)  30 units 
C)  45 units 
D)  75 units 
A)  0 units 
B)  30 units 
C)  45 units 
D)  75 units

Question 15

Figure 6-6  
-Refer to Figure 6-6. If the government imposes a price floor of $6 on this market, then there will be

Accepted Answer

A)  no surplus. 
B)  a surplus of 20 units. 
C)  a surplus of 30 units. 
D)  a surplus of 40 units. 
A)  no surplus. 
B)  a surplus of 20 units. 
C)  a surplus of 30 units. 
D)  a surplus of 40 units.

Question 16

Figure 6-15  
-Refer to Figure 6-15. Suppose a price ceiling of $2 is imposed on this market. As a result,

Accepted Answer

A)  the quantity of the good supplied decreases by 30 units. 
B)  the demand curve shifts to the left so as to now pass through the point quantity = 30, price = $2). 
C)  buyers' total expenditure on the good decreases by $75. 
D)  buyers' total expenditure on the good falls by $15. 
A)  the quantity of the good supplied decreases by 30 units. 
B)  the demand curve shifts to the left so as to now pass through the point quantity = 30, price = $2). 
C)  buyers' total expenditure on the good decreases by $75. 
D)  buyers' total expenditure on the good falls by $15.

Question 17

When a binding price floor is imposed on a market,

Accepted Answer

A)  price no longer serves as a rationing device. 
B)  the quantity demanded at the price floor exceeds the quantity that would have been demanded without the price floor. 
C)  all sellers benefit. 
D)  All of the above are correct. 
A)  price no longer serves as a rationing device. 
B)  the quantity demanded at the price floor exceeds the quantity that would have been demanded without the price floor. 
C)  all sellers benefit. 
D)  All of the above are correct.

Question 18

The minimum wage does not apply to

Accepted Answer

A)  jobs for teenagers. 
B)  jobs for members of minority groups. 
C)  unpaid internships. 
D)  jobs that include on-the-job training. 
A)  jobs for teenagers. 
B)  jobs for members of minority groups. 
C)  unpaid internships. 
D)  jobs that include on-the-job training.

Question 19

The United States is the only country in the world with minimum-wage laws.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)  be binding and will result in a surplus of 75 units. 
B)  be binding and will result in a surplus of 125 units. 
C)  be binding and will result in a surplus of 200 units. 
D)  not be binding. 
A)  be binding and will result in a surplus of 75 units. 
B)  be binding and will result in a surplus of 125 units. 
C)  be binding and will result in a surplus of 200 units. 
D)  not be binding.

Exam 6: Supply, Demand, and Government Policies

Figure 6-20 -Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Figure 6-24 -Refer to Figure 6-24. Andrew is a buyer of the good. Taking the tax into account, how much does Andrew effectively pay to acquire one unit of the good?

Regardless of whether a tax is levied on sellers or buyers, taxes encourage market activity.

The imposition of a binding price ceiling on a market causes

The long-run effects of rent controls are a good illustration of the principle that

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What is the effective price that sellers will receive for the good after the tax is imposed?

A $0.10 tax levied on the sellers of chocolate bars will cause the

Suppose the government has imposed a price ceiling on sliced sandwich bread. Which of the following events could transform the price ceiling from one that is binding to one that is not binding?

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

A price floor set below the equilibrium price causes quantity supplied to exceed quantity demanded.

Figure 6-31 -Refer to Figure 6-31. If the government set a price ceiling at $8, would there be a shortage or surplus, and how large would be the shortage/surplus?

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elastic. A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

Table 6-5 -Refer to Table 6-5. Suppose the government imposes a price floor of $3 on this market. What will be the size of the surplus or shortage) in this market?

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price floor of $6 on this market, then there will be

Figure 6-15 -Refer to Figure 6-15. Suppose a price ceiling of $2 is imposed on this market. As a result,

When a binding price floor is imposed on a market,

The minimum wage does not apply to

The United States is the only country in the world with minimum-wage laws.

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

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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