Question 1

Minimum-wage laws dictate the lowest wage that firms may pay workers.

Accepted Answer

A) True 
 B)False

Question 2

A tax on the sellers of coffee mugs

Accepted Answer

A)  increases the size of the coffee mug market. 
B)  decreases the size of the coffee mug market. 
C)  has no effect on the size of the coffee mug market. 
D)  may increase, decrease, or have no effect on the size of the coffee mug market. 
A)  increases the size of the coffee mug market. 
B)  decreases the size of the coffee mug market. 
C)  has no effect on the size of the coffee mug market. 
D)  may increase, decrease, or have no effect on the size of the coffee mug market.

Question 3

If the government levies a $5 tax per ticket on buyers of NFL game tickets, then the price paid by buyers of NFL game tickets would

Accepted Answer

A)  increase by less than $5. 
B)  increase by exactly $5. 
C)  increase by more than $5. 
D)  decrease by an indeterminate amount. 
A)  increase by less than $5. 
B)  increase by exactly $5. 
C)  increase by more than $5. 
D)  decrease by an indeterminate amount.

Question 4

Figure 6-4  
-Refer to Figure 6-4. A government-imposed price of $6 in this market could be an example of a

Accepted Answer

A)  (i) only 
B)  (ii) only 
C)  (i) and (iv) only 
D)  (ii) and (iii) only 
A)  (i) only 
B)  (ii) only 
C)  (i) and (iv) only 
D)  (ii) and (iii) only

Question 5

A tax on buyers decreases the quantity of the good sold in the market.

Accepted Answer

A) True 
 B)False

Question 6

A nonbinding price ceiling

Accepted Answer

A)  (i) only 
B)  (iii) only 
C)  (i) and (iii) only 
D)  (ii) and (iv) only 
A)  (i) only 
B)  (iii) only 
C)  (i) and (iii) only 
D)  (ii) and (iv) only

Question 7

Minimum-wage laws benefit society by creating a surplus of labor.

Accepted Answer

A) True 
 B)False

Question 8

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

Accepted Answer

A) True 
 B)False

Question 9

Minimum-wage laws dictate the

Accepted Answer

A)  average price employers must pay for labor. 
B)  highest price employers may pay for labor. 
C)  lowest price employers may pay for labor. 
D)  the highest and lowest prices employers may pay for labor. 
A)  average price employers must pay for labor. 
B)  highest price employers may pay for labor. 
C)  lowest price employers may pay for labor. 
D)  the highest and lowest prices employers may pay for labor.

Question 10

When a tax is imposed on a good, the result is always a shortage of the good.

Accepted Answer

A) True 
 B)False

Question 11

Figure 6-19  
-Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. Which of the following is correct?

Accepted Answer

A)  One-fourth of the burden of the tax will fall on buyers, and three-fourths of the burden of the tax will fall on sellers. 
B)  One-third of the burden of the tax will fall on buyers, and two-thirds of the burden of the tax will fall on sellers. 
C)  One-half of the burden of the tax will fall on buyers, and one-half of the burden of the tax will fall on sellers. 
D)  Two-thirds of the burden of the tax will fall on buyers, and one-third of the burden of the tax will fall on sellers. 
A)  One-fourth of the burden of the tax will fall on buyers, and three-fourths of the burden of the tax will fall on sellers. 
B)  One-third of the burden of the tax will fall on buyers, and two-thirds of the burden of the tax will fall on sellers. 
C)  One-half of the burden of the tax will fall on buyers, and one-half of the burden of the tax will fall on sellers. 
D)  Two-thirds of the burden of the tax will fall on buyers, and one-third of the burden of the tax will fall on sellers.

Question 12

Renters of rent-controlled apartments will likely benefit from both lower rents and higher quality of apartments.

Accepted Answer

A) True 
 B)False

Question 13

A tax on buyers increases the size of a market.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-9  
-Refer to Figure 6-9. At which price would a price ceiling be nonbinding?

Accepted Answer

A)  $4 
B)  $5 
C)  $3 
D)  $7 
A)  $4 
B)  $5 
C)  $3 
D)  $7

Question 15

Suppose the government imposes a 25-cent tax on the buyers of incandescent light bulbs. Which of the following is not correct? The tax would

Accepted Answer

A)  shift the demand curve downward by 25 cents. 
B)  lower the equilibrium price by 25 cents. 
C)  reduce the equilibrium quantity. 
D)  discourage market activity. 
A)  shift the demand curve downward by 25 cents. 
B)  lower the equilibrium price by 25 cents. 
C)  reduce the equilibrium quantity. 
D)  discourage market activity.

Question 16

Figure 6-26  
-Refer to Figure 6-26. The effective price received by sellers after the tax is imposed is

Accepted Answer

A)  $8. 
B)  $16. 
C)  $14. 
D)  $12. 
A)  $8. 
B)  $16. 
C)  $14. 
D)  $12.

Question 17

A tax on the buyers of sofas

Accepted Answer

A)  increases the size of the sofa market. 
B)  decreases the size of the sofa market. 
C)  has no effect on the size of the sofa market. 
D)  may increase, decrease, or have no effect on the size of the sofa market. 
A)  increases the size of the sofa market. 
B)  decreases the size of the sofa market. 
C)  has no effect on the size of the sofa market. 
D)  may increase, decrease, or have no effect on the size of the sofa market.

Question 18

Price is the rationing mechanism in a free, competitive market.

Accepted Answer

A) True 
 B)False

Question 19

Figure 6-24  
-Refer to Figure 6-24. The price paid by buyers after the tax is imposed is

Accepted Answer

A)  $24. 
B)  21. 
C)  $18. 
D)  $16. 
A)  $24. 
B)  21. 
C)  $18. 
D)  $16.

Question 20

Lawmakers can decide whether the buyers or the sellers must send a tax to the government, but they cannot legislate the true burden of a tax.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

Minimum-wage laws dictate the lowest wage that firms may pay workers.

A tax on the sellers of coffee mugs

If the government levies a $5 tax per ticket on buyers of NFL game tickets, then the price paid by buyers of NFL game tickets would

Figure 6-4 -Refer to Figure 6-4. A government-imposed price of $6 in this market could be an example of a

A tax on buyers decreases the quantity of the good sold in the market.

A nonbinding price ceiling

Minimum-wage laws benefit society by creating a surplus of labor.

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

Minimum-wage laws dictate the

When a tax is imposed on a good, the result is always a shortage of the good.

Figure 6-19 -Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. Which of the following is correct?

Renters of rent-controlled apartments will likely benefit from both lower rents and higher quality of apartments.

A tax on buyers increases the size of a market.

Figure 6-9 -Refer to Figure 6-9. At which price would a price ceiling be nonbinding?

Suppose the government imposes a 25-cent tax on the buyers of incandescent light bulbs. Which of the following is not correct? The tax would

Figure 6-26 -Refer to Figure 6-26. The effective price received by sellers after the tax is imposed is

A tax on the buyers of sofas

Price is the rationing mechanism in a free, competitive market.

Figure 6-24 -Refer to Figure 6-24. The price paid by buyers after the tax is imposed is

Lawmakers can decide whether the buyers or the sellers must send a tax to the government, but they cannot legislate the true burden of a tax.

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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