Question 1

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A price ceiling set

Question 3

Table 6-3
The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market.
  
-Refer to Table 6-3. How many units of the good are sold after the imposition of the price floor?

Accepted Answer

A)  5 
B)  9 
C)  10 
D)  15 
A)  5 
B)  9 
C)  10 
D)  15

Question 4

Figure 6-31  
-Refer to Figure 6-31. If the government set a price ceiling at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set at $15 wou

Question 5

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour, then a shortage of labor will exist.

Accepted Answer

A) True 
 B)False

Question 6

Figure 6-21  
-Refer to Figure 6-21. What is the amount of the tax per unit?

Accepted Answer

A)  $1 
B)  $2 
C)  $3 
D)  $4 
A)  $1 
B)  $2 
C)  $3 
D)  $4

Question 7

When a price floor is binding, is the price floor set above or below the market equilibrium price?

Accepted Answer

A binding price floo

Question 8

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 9

Suppose the government imposes a $40 tax on the buyers of refrigerators. The tax would

Accepted Answer

A)  shift the demand curve downward by less than $40. 
B)  raise the equilibrium price by $40. 
C)  create a $20 tax burden each for buyers and sellers. 
D)  discourage market activity. 
A)  shift the demand curve downward by less than $40. 
B)  raise the equilibrium price by $40. 
C)  create a $20 tax burden each for buyers and sellers. 
D)  discourage market activity.

Question 10

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 11

The following table shows the demand and supply schedules in a particular market.
   If the government sets a price floor $2 above the equilibrium price, how many units will be sold in this market?

Accepted Answer

The equilibrium price is $3, so the pric

Question 12

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-21  
-Refer to Figure 6-21. In the after-tax equilibrium, how much revenue does the government collect from the tax on this good?

Accepted Answer

A)  $210 
B)  $345 
C)  $420 
D)  $480 
A)  $210 
B)  $345 
C)  $420 
D)  $480

Question 14

Figure 6-11  
-Refer to Figure 6-11. If the government imposes a price ceiling at $6, it would be

Accepted Answer

A)  binding if market demand is Demand A or Demand B. 
B)  non-binding if market demand is Demand A or Demand B. 
C)  binding if market demand is Demand A and non-binding if market demand is Demand B. 
D)  non-binding if market demand is Demand A and binding if market demand is Demand B. 
A)  binding if market demand is Demand A or Demand B. 
B)  non-binding if market demand is Demand A or Demand B. 
C)  binding if market demand is Demand A and non-binding if market demand is Demand B. 
D)  non-binding if market demand is Demand A and binding if market demand is Demand B.

Question 15

Which of the following is correct? Price controls

Accepted Answer

A)  always help those they are designed to help. 
B)  never help those they are designed to help. 
C)  often hurt those they are designed to help. 
D)  always hurt those they are designed to help. 
A)  always help those they are designed to help. 
B)  never help those they are designed to help. 
C)  often hurt those they are designed to help. 
D)  always hurt those they are designed to help.

Question 16

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 17

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 18

If a tax is levied on the sellers of flour, then

Accepted Answer

A)  buyers will bear the entire burden of the tax. 
B)  sellers will bear the entire burden of the tax. 
C)  buyers and sellers will share the burden of the tax. 
D)  the government will bear the entire burden of the tax. 
A)  buyers will bear the entire burden of the tax. 
B)  sellers will bear the entire burden of the tax. 
C)  buyers and sellers will share the burden of the tax. 
D)  the government will bear the entire burden of the tax.

Question 19

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 20

The quantity sold in a market will decrease if the government

Accepted Answer

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

Exam 6: Supply, Demand, and Government Policies

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

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

Figure 6-31 -Refer to Figure 6-31. If the government set a price ceiling at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour, then a shortage of labor will exist.

Figure 6-21 -Refer to Figure 6-21. What is the amount of the tax per unit?

When a price floor is binding, is the price floor set above or below the market equilibrium price?

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

Suppose the government imposes a $40 tax on the buyers of refrigerators. The tax would

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

The following table shows the demand and supply schedules in a particular market. If the government sets a price floor $2 above the equilibrium price, how many units will be sold in this market?

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Figure 6-21 -Refer to Figure 6-21. In the after-tax equilibrium, how much revenue does the government collect from the tax on this good?

Figure 6-11 -Refer to Figure 6-11. If the government imposes a price ceiling at $6, it would be

Which of the following is correct? Price controls

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

If a tax is levied on the sellers of flour, then

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

The quantity sold in a market will decrease if the government

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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