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

Table 6-1  
-Refer to Table 6-1. Suppose the government imposes a price ceiling of $40 on this market. What will be the size of the shortage in this market?

Accepted Answer

A)  0 units 
B)  400 units 
C)  1200 units 
D)  1600 units 
A)  0 units 
B)  400 units 
C)  1200 units 
D)  1600 units

Question 3

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

Accepted Answer

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

Question 4

The tax incidence depends on whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  no surplus. 
B)  a surplus of 20 units. 
C)  a surplus of 30 units. 
D)  a surplus of 40 units. 
A)  no surplus. 
B)  a surplus of 20 units. 
C)  a surplus of 30 units. 
D)  a surplus of 40 units.

Question 6

Figure 6-34  
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the sellers in this market?

Accepted Answer

With a $6 tax per unit, the am

Question 7

If the supply curve is more price elastic than the demand curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Accepted Answer

When the supply curve is more price elas

Question 8

Suppose that a tax is placed on books. If the sellers pay the majority of the tax, then we know that the

Accepted Answer

A)  demand is more inelastic than the supply. 
B)  supply is more inelastic than the demand. 
C)  government has required that buyers remit the tax payments. 
D)  government has required that sellers remit the tax payments. 
A)  demand is more inelastic than the supply. 
B)  supply is more inelastic than the demand. 
C)  government has required that buyers remit the tax payments. 
D)  government has required that sellers remit the tax payments.

Question 9

To say that a price floor is binding is to say that the price floor

Accepted Answer

A)  results in a shortage. 
B)  is set below the equilibrium price. 
C)  causes quantity supplied to exceed quantity demanded. 
D)  All of the above are correct. 
A)  results in a shortage. 
B)  is set below the equilibrium price. 
C)  causes quantity supplied to exceed quantity demanded. 
D)  All of the above are correct.

Question 10

Figure 6-18
The vertical distance between points A and B represents the tax in the market.  
-Refer to Figure 6-18. The effective price that sellers receive after the tax is imposed is

Accepted Answer

A)  $6. 
B)  $10. 
C)  $16. 
D)  $24. 
A)  $6. 
B)  $10. 
C)  $16. 
D)  $24.

Question 11

When a binding price floor is imposed on a market,

Accepted Answer

A)  price no longer serves as a rationing device. 
B)  the quantity demanded at the price floor exceeds the quantity that would have been demanded without the price floor. 
C)  all sellers benefit. 
D)  All of the above are correct. 
A)  price no longer serves as a rationing device. 
B)  the quantity demanded at the price floor exceeds the quantity that would have been demanded without the price floor. 
C)  all sellers benefit. 
D)  All of the above are correct.

Question 12

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 13

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. Suppose the government sets a price ceiling at $12 for this product. Is this price ceiling binding, and what will be the size of the shortage/surplus in this market?

Accepted Answer

The price ceiling wi

Question 14

A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

Accepted Answer

A) True 
 B)False

Question 15

When a tax is placed on the sellers of a product, the

Accepted Answer

A)  size of the market decreases. 
B)  effective price received by sellers decreases, and the price paid by buyers increases. 
C)  supply of the product decreases. 
D)  All of the above are correct. 
A)  size of the market decreases. 
B)  effective price received by sellers decreases, and the price paid by buyers increases. 
C)  supply of the product decreases. 
D)  All of the above are correct.

Question 16

Figure 6-33  
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

Accepted Answer

Buyers wil

Question 17

Figure 6-36  
-Refer to Figure 6-36. If the government places a $2 tax in the market, the seller receives $6.

Accepted Answer

A) True 
 B)False

Question 18

The impact of the minimum wage depends on the skill and experience of the worker.

Accepted Answer

A) True 
 B)False

Question 19

The minimum wage, if it is binding, lowers the incomes of

Accepted Answer

A)  no workers. 
B)  only those workers who become unemployed. 
C)  only those workers who have jobs. 
D)  all workers. 
A)  no workers. 
B)  only those workers who become unemployed. 
C)  only those workers who have jobs. 
D)  all workers.

Question 20

Which of the following is not correct? In a 2006 survey of Ph.D. economists,

Accepted Answer

A)  47 percent favored eliminating the minimum wage. 
B)  14 percent would maintain the minimum wage at its current level. 
C)  38 percent would increase the minimum wage. 
D)  10 percent would decrease the minimum wage. 
A)  47 percent favored eliminating the minimum wage. 
B)  14 percent would maintain the minimum wage at its current level. 
C)  38 percent would increase the minimum wage. 
D)  10 percent would decrease the minimum wage.

Exam 6: Supply, Demand, and Government Policies

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

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price ceiling of $40 on this market. What will be the size of the shortage in this market?

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

The tax incidence depends on whether the tax is levied on buyers or sellers.

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

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the sellers in this market?

If the supply curve is more price elastic than the demand curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Suppose that a tax is placed on books. If the sellers pay the majority of the tax, then we know that the

To say that a price floor is binding is to say that the price floor

Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The effective price that sellers receive after the tax is imposed is

When a binding price floor is imposed on a market,

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 ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

When a tax is placed on the sellers of a product, the

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the seller receives $6.

The impact of the minimum wage depends on the skill and experience of the worker.

The minimum wage, if it is binding, lowers the incomes of

Which of the following is not correct? In a 2006 survey of Ph.D. economists,

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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