Question 1

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 2

Opponents of the minimum wage point out that the minimum wage

Accepted Answer

A)  encourages teenagers to drop out of school. 
B)  prevents some workers from getting needed on-the-job training. 
C)  contributes to the problem of unemployment. 
D)  All of the above are correct. 
A)  encourages teenagers to drop out of school. 
B)  prevents some workers from getting needed on-the-job training. 
C)  contributes to the problem of unemployment. 
D)  All of the above are correct.

Question 3

Figure 6-12  
-Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is

Accepted Answer

A)  less than Q3. 
B)  Q3. 
C)  between Q1 and Q3. 
D)  at least Q1. 
A)  less than Q3. 
B)  Q3. 
C)  between Q1 and Q3. 
D)  at least Q1.

Question 4

A binding minimum wage creates a shortage of labor.

Accepted Answer

A) True 
 B)False

Question 5

A price floor is

Accepted Answer

A)  a legal minimum on the price at which a good can be sold. 
B)  often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price floor. 
C)  a source of inefficiency in a market. 
D)  All of the above are correct. 
A)  a legal minimum on the price at which a good can be sold. 
B)  often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price floor. 
C)  a source of inefficiency in a market. 
D)  All of the above are correct.

Question 6

The minimum wage does not apply to

Accepted Answer

A)  jobs for teenagers. 
B)  jobs for members of minority groups. 
C)  unpaid internships. 
D)  jobs that include on-the-job training. 
A)  jobs for teenagers. 
B)  jobs for members of minority groups. 
C)  unpaid internships. 
D)  jobs that include on-the-job training.

Question 7

A minimum wage that is set above a market's equilibrium wage will result in an excess

Accepted Answer

A)  demand for labor, that is, unemployment. 
B)  demand for labor, that is, a shortage of workers. 
C)  supply of labor, that is, unemployment. 
D)  supply of labor, that is, a shortage of workers. 
A)  demand for labor, that is, unemployment. 
B)  demand for labor, that is, a shortage of workers. 
C)  supply of labor, that is, unemployment. 
D)  supply of labor, that is, a shortage of workers.

Question 8

The minimum wage was instituted to ensure workers

Accepted Answer

A)  a middle-class standard of living. 
B)  employment. 
C)  a minimally adequate standard of living. 
D)  unemployment compensation. 
A)  a middle-class standard of living. 
B)  employment. 
C)  a minimally adequate standard of living. 
D)  unemployment compensation.

Question 9

Does a binding price ceiling result in a shortage or a surplus in the market?

Accepted Answer

A binding price ceil

Question 10

Rent-control laws dictate

Accepted Answer

A)  the exact rent that landlords must charge tenants. 
B)  a maximum rent that landlords may charge tenants. 
C)  a minimum rent that landlords may charge tenants. 
D)  both a minimum rent and a maximum rent that landlords may charge tenants. 
A)  the exact rent that landlords must charge tenants. 
B)  a maximum rent that landlords may charge tenants. 
C)  a minimum rent that landlords may charge tenants. 
D)  both a minimum rent and a maximum rent that landlords may charge tenants.

Question 11

Figure 6-29
Suppose the government imposes a $2 on this market.  
-Refer to Figure 6-29. Suppose D1 represents the demand curve for paperback novels, D2 represents the demand curve for gasoline, and S1 represents the supply curve for paperback novels and gasoline. After the imposition of the $2 on paperback novels and on gasoline, the

Accepted Answer

A)  buyers of gasoline bear a higher burden of the $2 tax than buyers of paperback novels. 
B)  sellers of gasoline bear a higher burden of the $2 tax than sellers of paperback novels. 
C)  buyers of gasoline bear an equal burden of the $2 tax as buyers of paperback novels. 
D)  Both a) and b) are correct. 
A)  buyers of gasoline bear a higher burden of the $2 tax than buyers of paperback novels. 
B)  sellers of gasoline bear a higher burden of the $2 tax than sellers of paperback novels. 
C)  buyers of gasoline bear an equal burden of the $2 tax as buyers of paperback novels. 
D)  Both a) and b) are correct.

Question 12

Figure 6-32  
-Refer to Figure 6-32. If the government set a price ceiling at $40, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

There woul

Question 13

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

Accepted Answer

A) True 
 B)False

Question 14

If the government levies a $500 tax per car on sellers of cars, then the price received by sellers of cars would

Accepted Answer

A)  decrease by less than $500. 
B)  decrease by exactly $500. 
C)  decrease by more than $500. 
D)  increase by an indeterminate amount. 
A)  decrease by less than $500. 
B)  decrease by exactly $500. 
C)  decrease by more than $500. 
D)  increase by an indeterminate amount.

Question 15

Figure 6-24  
-Refer to Figure 6-24. Which of the following statements is correct?

Accepted Answer

A)  The amount of the tax per unit is $6. 
B)  The tax leaves the size of the market unchanged. 
C)  The tax is levied on buyers of the good, rather than on sellers. 
D)  All of the above are correct. 
A)  The amount of the tax per unit is $6. 
B)  The tax leaves the size of the market unchanged. 
C)  The tax is levied on buyers of the good, rather than on sellers. 
D)  All of the above are correct.

Question 16

Figure 6-36  
-Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)  $8 
B)  $6 
C)  $12 
D)  $10 
A)  $8 
B)  $6 
C)  $12 
D)  $10

Question 18

Scenario 6-2
Suppose demand for a product is given by the equation   and supply for the product is given by the equation  
-Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Accepted Answer

The equilibrium pric

Question 19

When a tax is imposed on the sellers of a good, the supply curve shifts

Accepted Answer

A)  upward by the amount of the tax. 
B)  downward by the amount of the tax. 
C)  upward by less than the amount of the tax. 
D)  downward by less than the amount of the tax. 
A)  upward by the amount of the tax. 
B)  downward by the amount of the tax. 
C)  upward by less than the amount of the tax. 
D)  downward by less than the amount of the tax.

Question 20

The price received by sellers in a market will increase 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)  imposes a binding price ceiling in that market. 
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)  imposes a binding price ceiling in that market.

Exam 6: Supply, Demand, and Government Policies

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

Opponents of the minimum wage point out that the minimum wage

Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is

A binding minimum wage creates a shortage of labor.

A price floor is

The minimum wage does not apply to

A minimum wage that is set above a market's equilibrium wage will result in an excess

The minimum wage was instituted to ensure workers

Does a binding price ceiling result in a shortage or a surplus in the market?

Rent-control laws dictate

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $40, would there be a shortage or surplus, and how large would be the shortage/surplus?

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

If the government levies a $500 tax per car on sellers of cars, then the price received by sellers of cars would

Figure 6-24 -Refer to Figure 6-24. Which of the following statements is correct?

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

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

Scenario 6-2 Suppose demand for a product is given by the equation and supply for the product is given by the equation -Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

When a tax is imposed on the sellers of a good, the supply curve shifts

The price received by sellers in a market will increase 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

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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