Question 1

There are several criticisms of the minimum wage. Which of the following is not one of those criticisms? The minimum wage

Accepted Answer

A)  often hurts those people who it is intended to help. 
B)  results in an excess supply of low-skilled labor. 
C)  prevents some unskilled workers from getting needed on-the-job training. 
D)  fails to raise the wage of any employed person. 
A)  often hurts those people who it is intended to help. 
B)  results in an excess supply of low-skilled labor. 
C)  prevents some unskilled workers from getting needed on-the-job training. 
D)  fails to raise the wage of any employed person.

Question 2

If a tax is imposed on the buyers of a product, then the tax burden will fall entirely on the buyers.

Accepted Answer

A) True 
 B)False

Question 3

A binding minimum wage may not help all workers, but it does not hurt any workers.

Accepted Answer

A) True 
 B)False

Question 4

The quantity sold in a market will decrease if the government decreases a

Accepted Answer

A)  binding price floor in that market. 
B)  binding price ceiling in that market. 
C)  tax on the good sold in that market. 
D)  All of the above are correct. 
A)  binding price floor in that market. 
B)  binding price ceiling in that market. 
C)  tax on the good sold in that market. 
D)  All of the above are correct.

Question 5

When a tax is placed on the buyers 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 6

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. Following the imposition of a price floor $2 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting shortage is

Accepted Answer

A)  0 units. 
B)  2 units. 
C)  5 units. 
D)  7 units. 
A)  0 units. 
B)  2 units. 
C)  5 units. 
D)  7 units.

Question 7

Figure 6-26  
-Refer to Figure 6-26. The per-unit burden of the tax is

Accepted Answer

A)  $2 for buyers and $6 for sellers. 
B)  $4 for buyers and $4 for sellers. 
C)  $6 for buyers and $2 for sellers. 
D)  $8 for buyers and $0 for sellers. 
A)  $2 for buyers and $6 for sellers. 
B)  $4 for buyers and $4 for sellers. 
C)  $6 for buyers and $2 for sellers. 
D)  $8 for buyers and $0 for sellers.

Question 8

Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

Accepted Answer

A) True 
 B)False

Question 9

The burden of a luxury tax most likely falls more heavily on sellers because demand is more elastic and supply is more inelastic.

Accepted Answer

A) True 
 B)False

Question 10

In 2012, the U.S. minimum wage according to federal law was

Accepted Answer

A)  $4.25 per hour. 
B)  $5.15 per hour. 
C)  $5.75 per hour. 
D)  $7.25 per hour. 
A)  $4.25 per hour. 
B)  $5.15 per hour. 
C)  $5.75 per hour. 
D)  $7.25 per hour.

Question 11

If a tax is levied on the buyers of a product, then there will be a(n)

Accepted Answer

A)  downward shift of the supply curve. 
B)  upward shift of the supply curve. 
C)  movement up and to the right along the supply curve. 
D)  movement down and to the left along the supply curve. 
A)  downward shift of the supply curve. 
B)  upward shift of the supply curve. 
C)  movement up and to the right along the supply curve. 
D)  movement down and to the left along the supply curve.

Question 12

If the government removes a tax on a good, then the quantity of the good sold will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  not change. 
D)  All of the above are possible. 
A)  increase. 
B)  decrease. 
C)  not change. 
D)  All of the above are possible.

Question 13

Figure 6-9  
-Refer to Figure 6-9. A price floor set at

Accepted Answer

A)  $4 will be binding and will result in a shortage of 8 units. 
B)  $4 will be binding and will result in a shortage of 16 units. 
C)  $7 will be binding and will result in a surplus of 4 units. 
D)  $7 will be binding and will result in a surplus of 8 units. 
A)  $4 will be binding and will result in a shortage of 8 units. 
B)  $4 will be binding and will result in a shortage of 16 units. 
C)  $7 will be binding and will result in a surplus of 4 units. 
D)  $7 will be binding and will result in a surplus of 8 units.

Question 14

A tax on sellers shifts the supply curve to the left.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)  $7 
B)  $6 
C)  $4 
D)  $5 
A)  $7 
B)  $6 
C)  $4 
D)  $5

Question 16

Figure 6-21  
-Refer to Figure 6-21. How is the burden of the tax shared between buyers and sellers? Buyers bear

Accepted Answer

A)  three-fourths of the burden, and sellers bear one-fourth of the burden. 
B)  two-thirds of the burden, and sellers bear one-third of the burden. 
C)  one-half of the burden, and sellers bear one-half of the burden. 
D)  one-fourth of the burden, and sellers bear three-fourths of the burden. 
A)  three-fourths of the burden, and sellers bear one-fourth of the burden. 
B)  two-thirds of the burden, and sellers bear one-third of the burden. 
C)  one-half of the burden, and sellers bear one-half of the burden. 
D)  one-fourth of the burden, and sellers bear three-fourths of the burden.

Question 17

The tax incidence

Accepted Answer

A)  is the manner in which the burden of a tax is shared among participants in a market. 
B)  can be shifted to the buyer by imposing the tax on the buyers of a product in a market. 
C)  can be shifted to the seller by imposing the tax on the sellers of a product in a market. 
D)  All of the above are correct. 
A)  is the manner in which the burden of a tax is shared among participants in a market. 
B)  can be shifted to the buyer by imposing the tax on the buyers of a product in a market. 
C)  can be shifted to the seller by imposing the tax on the sellers of a product in a market. 
D)  All of the above are correct.

Question 18

Figure 6-6  
-Refer to Figure 6-6. If the government imposes a price ceiling of $8 on this market, then there will be

Accepted Answer

A)  no shortage. 
B)  a shortage of 10 units. 
C)  a shortage of 20 units. 
D)  a shortage of 40 units. 
A)  no shortage. 
B)  a shortage of 10 units. 
C)  a shortage of 20 units. 
D)  a shortage of 40 units.

Question 19

If a price floor is not binding, then

Accepted Answer

A)  there will be a surplus in the market. 
B)  there will be a shortage in the market. 
C)  there will be no effect on the market price or quantity sold. 
D)  the market will be less efficient than it would be without the price floor. 
A)  there will be a surplus in the market. 
B)  there will be a shortage in the market. 
C)  there will be no effect on the market price or quantity sold. 
D)  the market will be less efficient than it would be without the price floor.

Question 20

The goal of rent control is to help the poor by making housing more affordable.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

There are several criticisms of the minimum wage. Which of the following is not one of those criticisms? The minimum wage

If a tax is imposed on the buyers of a product, then the tax burden will fall entirely on the buyers.

A binding minimum wage may not help all workers, but it does not hurt any workers.

The quantity sold in a market will decrease if the government decreases a

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

Figure 6-26 -Refer to Figure 6-26. The per-unit burden of the tax is

Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

The burden of a luxury tax most likely falls more heavily on sellers because demand is more elastic and supply is more inelastic.

In 2012, the U.S. minimum wage according to federal law was

If a tax is levied on the buyers of a product, then there will be a(n)

If the government removes a tax on a good, then the quantity of the good sold will

Figure 6-9 -Refer to Figure 6-9. A price floor set at

A tax on sellers shifts the supply curve to the left.

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

Figure 6-21 -Refer to Figure 6-21. How is the burden of the tax shared between buyers and sellers? Buyers bear

The tax incidence

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price ceiling of $8 on this market, then there will be

If a price floor is not binding, then

The goal of rent control is to help the poor by making housing more affordable.

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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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