Question 1

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

Accepted Answer

A)  waiting lists 
B)  race 
C)  price 
D)  bribes 
A)  waiting lists 
B)  race 
C)  price 
D)  bribes

Question 2

Figure 6-32  
-Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set at $80 wou

Question 3

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor,

Accepted Answer

A)  quantity demanded decreases. 
B)  quantity supplied increases. 
C)  there is a surplus. 
D)  All of the above are correct. 
A)  quantity demanded decreases. 
B)  quantity supplied increases. 
C)  there is a surplus. 
D)  All of the above are correct.

Question 4

Figure 6-22  
-Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

Accepted Answer

A)  $2.00. 
B)  $3.50. 
C)  $5.00. 
D)  $3.00. 
A)  $2.00. 
B)  $3.50. 
C)  $5.00. 
D)  $3.00.

Question 5

Figure 6-25  
-Refer to Figure 6-25. 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 sellers of the good, rather than the buyers, are required to pay the tax to the government. After the sellers are required to pay the tax, relative to the case depicted in the graph, 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 6

A price ceiling set below the equilibrium price causes a shortage in the market.

Accepted Answer

A) True 
 B)False

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 $13, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at

Question 8

Figure 6-33  
-Refer to Figure 6-33. Suppose a $4 per-unit tax is imposed on the sellers of this good. How many units of this good will be sold after the tax is imposed?

Accepted Answer

With a $4 per-unit t

Question 9

A price floor is binding when it is set

Accepted Answer

A)  above the equilibrium price, causing a shortage. 
B)  above the equilibrium price, causing a surplus. 
C)  below the equilibrium price, causing a shortage. 
D)  below the equilibrium price, causing a surplus. 
A)  above the equilibrium price, causing a shortage. 
B)  above the equilibrium price, causing a surplus. 
C)  below the equilibrium price, causing a shortage. 
D)  below the equilibrium price, causing a surplus.

Question 10

Define a price floor.

Accepted Answer

A price floor is a l

Question 11

A tax on buyers increases the size of a market.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

Accepted Answer

A)  Buyers bear the entire burden of the tax. 
B)  Sellers bear the entire burden of the tax. 
C)  Buyers and sellers share the burden of the tax. 
D)  We have to know whether it is the buyers or the sellers that are required to pay the tax to the government in order to make this determination. 
A)  Buyers bear the entire burden of the tax. 
B)  Sellers bear the entire burden of the tax. 
C)  Buyers and sellers share the burden of the tax. 
D)  We have to know whether it is the buyers or the sellers that are required to pay the tax to the government in order to make this determination.

Question 13

Figure 6-22  
-Refer to Figure 6-22. As the figure is drawn, who sends the tax payment to the government?

Accepted Answer

A)  The buyers send the tax payment. 
B)  The sellers send the tax payment. 
C)  A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers. 
D)  The question of who sends the tax payment cannot be determined from the graph. 
A)  The buyers send the tax payment. 
B)  The sellers send the tax payment. 
C)  A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers. 
D)  The question of who sends the tax payment cannot be determined from the graph.

Question 14

A binding price ceiling may not help all consumers, but it does not hurt any consumers.

Accepted Answer

A) True 
 B)False

Question 15

When a tax is placed on the sellers of energy drinks, the

Accepted Answer

A)  sellers bear the entire burden of the tax. 
B)  buyers bear the entire burden of the tax. 
C)  burden of the tax will be always be equally divided between the buyers and the sellers. 
D)  burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal. 
A)  sellers bear the entire burden of the tax. 
B)  buyers bear the entire burden of the tax. 
C)  burden of the tax will be always be equally divided between the buyers and the sellers. 
D)  burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal.

Question 16

Figure 6-6  
-Refer to Figure 6-6. Which of the following statements is not correct?

Accepted Answer

A)  A price ceiling set at $6 would be binding, but a price ceiling set at $12 would not be binding. 
B)  A price floor set at $14 would be binding, but a price floor set at $8 would not be binding. 
C)  A price ceiling set at $9 would result in a shortage. 
D)  A price floor set at $6 would result in a shortage. 
A)  A price ceiling set at $6 would be binding, but a price ceiling set at $12 would not be binding. 
B)  A price floor set at $14 would be binding, but a price floor set at $8 would not be binding. 
C)  A price ceiling set at $9 would result in a shortage. 
D)  A price floor set at $6 would result in a shortage.

Question 17

Define a price ceiling.

Accepted Answer

A price ceiling is a

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Figure 6-10  
-Refer to Figure 6-10. A price ceiling set at

Accepted Answer

A)  $6 will be binding and will result in a shortage of 10 units. 
B)  $6 will be binding and will result in a shortage of 6 units. 
C)  $16 will be binding and will result in a shortage of 10 units. 
D)  $16 will be binding and will result in a shortage of 4 units. 
A)  $6 will be binding and will result in a shortage of 10 units. 
B)  $6 will be binding and will result in a shortage of 6 units. 
C)  $16 will be binding and will result in a shortage of 10 units. 
D)  $16 will be binding and will result in a shortage of 4 units.

Question 20

If a price ceiling is a binding constraint on a market, then

Accepted Answer

A)  the equilibrium price must be below the price ceiling. 
B)  the quantity supplied must exceed the quantity demanded. 
C)  sellers cannot sell all they want to sell at the price ceiling. 
D)  buyers cannot buy all they want to buy at the price ceiling. 
A)  the equilibrium price must be below the price ceiling. 
B)  the quantity supplied must exceed the quantity demanded. 
C)  sellers cannot sell all they want to sell at the price ceiling. 
D)  buyers cannot buy all they want to buy at the price ceiling.

Exam 6: Supply, Demand, and Government Policies

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or surplus, and how large would be the shortage/surplus?

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor,

Figure 6-22 -Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

A price ceiling set below the equilibrium price causes a shortage in the market.

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?

Figure 6-33 -Refer to Figure 6-33. Suppose a $4 per-unit tax is imposed on the sellers of this good. How many units of this good will be sold after the tax is imposed?

A price floor is binding when it is set

Define a price floor.

A tax on buyers increases the size of a market.

Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

Figure 6-22 -Refer to Figure 6-22. As the figure is drawn, who sends the tax payment to the government?

A binding price ceiling may not help all consumers, but it does not hurt any consumers.

When a tax is placed on the sellers of energy drinks, the

Figure 6-6 -Refer to Figure 6-6. Which of the following statements is not correct?

Define a price ceiling.

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

Figure 6-10 -Refer to Figure 6-10. A price ceiling set at

If a price ceiling is a binding constraint on a market, then

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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