Question 1

Figure 6-25  
-Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Accepted Answer

A)  $5. 
B)  $6. 
C)  $7. 
D)  $8. 
A)  $5. 
B)  $6. 
C)  $7. 
D)  $8.

Question 2

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

Accepted Answer

A binding price ceil

Question 3

Figure 6-15  
-Refer to Figure 6-15. Suppose a price floor of $4 is imposed on this market. As a result,

Accepted Answer

A)  buyers' total expenditure on the good decreases by $15. 
B)  the supply curve shifts to the left so as to now pass through the point (quantity = 30, price = $4). 
C)  the quantity demanded of the good decreases by 30 units. 
D)  the number of units sold in the market will increase by 15 units. 
A)  buyers' total expenditure on the good decreases by $15. 
B)  the supply curve shifts to the left so as to now pass through the point (quantity = 30, price = $4). 
C)  the quantity demanded of the good decreases by 30 units. 
D)  the number of units sold in the market will increase by 15 units.

Question 4

In a particular market, market demand is given by the equation   and market supply is given by the equation   Suppose a per-unit tax is imposed that reduces the number of units bought and sold in the market to 25 units. What is the size of the tax, and who bears the greater burden of the tax, buyers or sellers?

Accepted Answer

If the number of transactions falls to 2

Question 5

Figure 6-3
Panel (a) Panel (b)    
-Refer to Figure 6-3. A nonbinding price floor is shown in

Accepted Answer

A)  both panel (a) and panel (b). 
B)  panel (a) only. 
C)  panel (b) only. 
D)  neither panel (a) nor panel (b). 
A)  both panel (a) and panel (b). 
B)  panel (a) only. 
C)  panel (b) only. 
D)  neither panel (a) nor panel (b).

Question 6

Table 6-6  
-Refer to Table 6-6. In this market, over what range of prices would a price ceiling set by the government be binding?

Accepted Answer

A price ceiling must be set be

Question 7

Figure 6-13
This figure shows the market demand and market supply curves for good X.  
-Refer to Figure 6-13. Which of the following price ceilings would be binding in this market?

Accepted Answer

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

Question 8

Figure 6-33  
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the sellers in this market?

Accepted Answer

The burden

Question 9

Figure 6-25  
-Refer to Figure 6-25. The equilibrium price in the market before the tax is imposed is

Accepted Answer

A)  $1. 
B)  $2. 
C)  $5. 
D)  $6. 
A)  $1. 
B)  $2. 
C)  $5. 
D)  $6.

Question 10

A tax on sellers 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 11

If the minimum wage exceeds the equilibrium wage, then

Accepted Answer

A)  the quantity demanded of labor will exceed the quantity supplied. 
B)  the quantity supplied of labor will exceed the quantity demanded. 
C)  the minimum wage will not be binding. 
D)  there will be no unemployment. 
A)  the quantity demanded of labor will exceed the quantity supplied. 
B)  the quantity supplied of labor will exceed the quantity demanded. 
C)  the minimum wage will not be binding. 
D)  there will be no unemployment.

Question 12

Figure 6-2  
-Refer to Figure 6-2. The price ceiling

Accepted Answer

A)  causes a shortage of 45 units of the good. 
B)  makes it necessary for sellers to ration the good. 
C)  is not binding because it is set below the equilibrium price. 
D)  causes a shortage of 40 units of the good. 
A)  causes a shortage of 45 units of the good. 
B)  makes it necessary for sellers to ration the good. 
C)  is not binding because it is set below the equilibrium price. 
D)  causes a shortage of 40 units of the good.

Question 13

Table 6-5  
-Refer to Table 6-5. Which of the following price ceilings would be binding in this market?

Accepted Answer

A)  $3 
B)  $6 
C)  $9 
D)  None of the above price ceilings would be binding. 
A)  $3 
B)  $6 
C)  $9 
D)  None of the above price ceilings would be binding.

Question 14

A binding minimum wage creates unemployment.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Accepted Answer

A)  a binding price floor 
B)  a binding price ceiling 
C)  a tax on the good 
D)  All of the above are correct. 
A)  a binding price floor 
B)  a binding price ceiling 
C)  a tax on the good 
D)  All of the above are correct.

Question 16

Figure 6-7  
-Refer to Figure 6-7. Which of the following price controls would cause a shortage of 20 units of the good?

Accepted Answer

A)  a price ceiling set at $6 
B)  a price ceiling set at $5 
C)  a price floor set at $9 
D)  a price floor set at $8 
A)  a price ceiling set at $6 
B)  a price ceiling set at $5 
C)  a price floor set at $9 
D)  a price floor set at $8

Question 17

Figure 6-2  
-Refer to Figure 6-2. The price ceiling

Accepted Answer

A)  is binding. 
B)  causes a shortage. 
C)  causes the quantity demanded to exceed the quantity supplied. 
D)  All of the above are correct. 
A)  is binding. 
B)  causes a shortage. 
C)  causes the quantity demanded to exceed the quantity supplied. 
D)  All of the above are correct.

Question 18

Figure 6-4  
-Refer to Figure 6-4. A government-imposed price ceiling of $6 in this market results in

Accepted Answer

A)  a shortage of 8 units. 
B)  a shortage of 4 units. 
C)  14 units sold. 
D)  10 units sold. 
A)  a shortage of 8 units. 
B)  a shortage of 4 units. 
C)  14 units sold. 
D)  10 units sold.

Question 19

Figure 6-7  
-Refer to Figure 6-7. For a price floor to be binding in this market, it would have to be set at

Accepted Answer

A)  any price below $7. 
B)  any price below $3. 
C)  any price below $9. 
D)  any price above $7. 
A)  any price below $7. 
B)  any price below $3. 
C)  any price below $9. 
D)  any price above $7.

Question 20

Which of the following observations would be consistent with the imposition of a binding price floor on a market? After the price floor becomes effective,

Accepted Answer

A)  a smaller quantity of the good is bought and sold. 
B)  a larger quantity of the good is demanded. 
C)  a smaller quantity of the good is supplied. 
D)  the price falls below the equilibrium price. 
A)  a smaller quantity of the good is bought and sold. 
B)  a larger quantity of the good is demanded. 
C)  a smaller quantity of the good is supplied. 
D)  the price falls below the equilibrium price.

Exam 6: Supply, Demand, and Government Policies

Figure 6-25 -Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

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

Figure 6-15 -Refer to Figure 6-15. Suppose a price floor of $4 is imposed on this market. As a result,

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. A nonbinding price floor is shown in

Table 6-6 -Refer to Table 6-6. In this market, over what range of prices would a price ceiling set by the government be binding?

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. Which of the following price ceilings would be binding in this market?

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the sellers in this market?

Figure 6-25 -Refer to Figure 6-25. The equilibrium price in the market before the tax is imposed is

A tax on sellers 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.

If the minimum wage exceeds the equilibrium wage, then

Figure 6-2 -Refer to Figure 6-2. The price ceiling

Table 6-5 -Refer to Table 6-5. Which of the following price ceilings would be binding in this market?

A binding minimum wage creates unemployment.

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Figure 6-7 -Refer to Figure 6-7. Which of the following price controls would cause a shortage of 20 units of the good?

Figure 6-2 -Refer to Figure 6-2. The price ceiling

Figure 6-4 -Refer to Figure 6-4. A government-imposed price ceiling of $6 in this market results in

Figure 6-7 -Refer to Figure 6-7. For a price floor to be binding in this market, it would have to be set at

Which of the following observations would be consistent with the imposition of a binding price floor on a market? After the price floor becomes effective,

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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