Question 1

A tax imposed on the buyers of a good will lower the

Accepted Answer

A)  price paid by buyers and lower the equilibrium quantity. 
B)  price paid by buyers and raise the equilibrium quantity. 
C)  effective price received by sellers and lower the equilibrium quantity. 
D)  effective price received by sellers and raise the equilibrium quantity. 
A)  price paid by buyers and lower the equilibrium quantity. 
B)  price paid by buyers and raise the equilibrium quantity. 
C)  effective price received by sellers and lower the equilibrium quantity. 
D)  effective price received by sellers and raise the equilibrium quantity.

Question 2

You receive a paycheck from your employer, and your pay stub indicates that $300 was deducted to pay the FICA (Social Security/Medicare) tax. Which of the following statements is correct?

Accepted Answer

A)  The $300 that you paid is not necessarily the true burden of the tax that falls on you, the employee. 
B)  Your employer is required by law to pay $300 to match the $300 deducted from your check. 
C)  This type of tax is an example of a payroll tax. 
D)  All of the above are correct. 
A)  The $300 that you paid is not necessarily the true burden of the tax that falls on you, the employee. 
B)  Your employer is required by law to pay $300 to match the $300 deducted from your check. 
C)  This type of tax is an example of a payroll tax. 
D)  All of the above are correct.

Question 3

Figure 6-28  
-Refer to Figure 6-28. Suppose a tax of $6 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Accepted Answer

A)  less than 20 units 
B)  20 units 
C)  between 20 units and 35 units 
D)  greater than 35 units 
A)  less than 20 units 
B)  20 units 
C)  between 20 units and 35 units 
D)  greater than 35 units

Question 4

Figure 6-19  
-Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)  $3 
B)  between $3 and $5 
C)  between $5 and $7 
D)  $7 
A)  $3 
B)  between $3 and $5 
C)  between $5 and $7 
D)  $7

Question 5

Figure 6-17
This figure shows the market demand and market supply curves for good Y  
-Refer to Figure 6-17. A government-imposed price of $12 in this market is an example of a

Accepted Answer

A)  binding price ceiling that creates a shortage. 
B)  non-binding price ceiling that creates a shortage. 
C)  binding price floor that creates a surplus. 
D)  non-binding price floor that creates a surplus. 
A)  binding price ceiling that creates a shortage. 
B)  non-binding price ceiling that creates a shortage. 
C)  binding price floor that creates a surplus. 
D)  non-binding price floor that creates a surplus.

Question 6

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, the

Accepted Answer

A)  demand curve for physicals shifts to the right. 
B)  supply curve for physicals shifts to the left. 
C)  quantity demanded of physicals increases, and the quantity supplied of physicals decreases. 
D)  number of physicals performed stays the same. 
A)  demand curve for physicals shifts to the right. 
B)  supply curve for physicals shifts to the left. 
C)  quantity demanded of physicals increases, and the quantity supplied of physicals decreases. 
D)  number of physicals performed stays the same.

Question 7

Figure 6-6  
-Refer to Figure 6-6. Which of the following statements is not correct?

Accepted Answer

A)  A price ceiling set at $6 would be binding, but a price ceiling set at $12 would not be binding. 
B)  A price floor set at $14 would be binding, but a price floor set at $8 would not be binding. 
C)  A price ceiling set at $9 would result in a shortage. 
D)  A price floor set at $6 would result in a shortage. 
A)  A price ceiling set at $6 would be binding, but a price ceiling set at $12 would not be binding. 
B)  A price floor set at $14 would be binding, but a price floor set at $8 would not be binding. 
C)  A price ceiling set at $9 would result in a shortage. 
D)  A price floor set at $6 would result in a shortage.

Question 8

Figure 6-21  
-Refer to Figure 6-21. What is the amount of the tax per unit?

Accepted Answer

A)  $1 
B)  $2 
C)  $3 
D)  $4 
A)  $1 
B)  $2 
C)  $3 
D)  $4

Question 9

If the government wants to reduce smoking, it should impose a tax on

Accepted Answer

A)  buyers of cigarettes. 
B)  sellers of cigarettes. 
C)  either buyers or sellers of cigarettes. 
D)  whichever side of the market is less elastic. 
A)  buyers of cigarettes. 
B)  sellers of cigarettes. 
C)  either buyers or sellers of cigarettes. 
D)  whichever side of the market is less elastic.

Question 10

Figure 6-9  
-Refer to Figure 6-9. A price ceiling 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 11

Figure 6-23    
-Refer to Figure 6-23. For every unit of the good that is sold, sellers are required to send

Accepted Answer

A)  one dollar to the government, and buyers are required to send two dollars to the government. 
B)  two dollars to the government, and buyers are required to send one dollar to the government. 
C)  three dollars to the government, and buyers are required to send nothing to the government. 
D)  nothing to the government, and buyers are required to send two dollars to the government. 
A)  one dollar to the government, and buyers are required to send two dollars to the government. 
B)  two dollars to the government, and buyers are required to send one dollar to the government. 
C)  three dollars to the government, and buyers are required to send nothing to the government. 
D)  nothing to the government, and buyers are required to send two dollars to the government.

Question 12

The price paid by buyers in a market will increase if the government

Accepted Answer

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

Question 13

A tax on sellers will shift the

Accepted Answer

A)  demand curve upward by the amount of the tax. 
B)  demand curve downward by the amount of the tax. 
C)  supply curve upward by the amount of the tax. 
D)  supply curve downward by the amount of the tax. 
A)  demand curve upward by the amount of the tax. 
B)  demand curve downward by the amount of the tax. 
C)  supply curve upward by the amount of the tax. 
D)  supply curve downward by the amount of the tax.

Question 14

In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that

Accepted Answer

A)  OPEC raised the price of crude oil in world markets. 
B)  U.S. gasoline producers raised the price of gasoline. 
C)  the U.S. government maintained a price ceiling on gasoline. 
D)  Americans typically commuted long distances. 
A)  OPEC raised the price of crude oil in world markets. 
B)  U.S. gasoline producers raised the price of gasoline. 
C)  the U.S. government maintained a price ceiling on gasoline. 
D)  Americans typically commuted long distances.

Question 15

When a binding price floor is imposed on a market,

Accepted Answer

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

Question 16

When a tax is placed on the buyers of cell phones, the size of the cell phone market

Accepted Answer

A)  and the effective price received by sellers both decrease. 
B)  decreases, but the effective price received by sellers increases. 
C)  increases, but the effective price received by sellers decreases. 
D)  and the effective price received by sellers both increase. 
A)  and the effective price received by sellers both decrease. 
B)  decreases, but the effective price received by sellers increases. 
C)  increases, but the effective price received by sellers decreases. 
D)  and the effective price received by sellers both increase.

Question 17

When a tax is placed on the sellers of cell phones, the size of the cell phone market

Accepted Answer

A)  and the effective price received by sellers both increase. 
B)  increases, but the effective price received by sellers decreases. 
C)  decreases, but the effective price received by sellers increases. 
D)  and the effective price received by sellers both decrease. 
A)  and the effective price received by sellers both increase. 
B)  increases, but the effective price received by sellers decreases. 
C)  decreases, but the effective price received by sellers increases. 
D)  and the effective price received by sellers both decrease.

Question 18

Figure 6-32  
-Refer to Figure 6-32. If the government set a price floor at $55, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at $55 would

Question 19

Price ceilings and price floors that are binding

Accepted Answer

A)  are desirable because they make markets more efficient and more fair. 
B)  cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price. 
C)  can have the effect of restoring a market to equilibrium. 
D)  are imposed because they can make the poor in the economy better off without causing adverse effects. 
A)  are desirable because they make markets more efficient and more fair. 
B)  cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price. 
C)  can have the effect of restoring a market to equilibrium. 
D)  are imposed because they can make the poor in the economy better off without causing adverse effects.

Question 20

Which of the following is not a result of rent control?

Accepted Answer

A)  fewer new apartments offered for rent 
B)  less maintenance provided by landlords 
C)  bribery 
D)  higher quality housing 
A)  fewer new apartments offered for rent 
B)  less maintenance provided by landlords 
C)  bribery 
D)  higher quality housing

Exam 6: Supply, Demand, and Government Policies

A tax imposed on the buyers of a good will lower the

You receive a paycheck from your employer, and your pay stub indicates that $300 was deducted to pay the FICA (Social Security/Medicare) tax. Which of the following statements is correct?

Figure 6-28 -Refer to Figure 6-28. Suppose a tax of $6 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Figure 6-19 -Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Figure 6-17 This figure shows the market demand and market supply curves for good Y -Refer to Figure 6-17. A government-imposed price of $12 in this market is an example of a

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, the

Figure 6-6 -Refer to Figure 6-6. Which of the following statements is not correct?

Figure 6-21 -Refer to Figure 6-21. What is the amount of the tax per unit?

If the government wants to reduce smoking, it should impose a tax on

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

Figure 6-23 -Refer to Figure 6-23. For every unit of the good that is sold, sellers are required to send

The price paid by buyers in a market will increase if the government

A tax on sellers will shift the

In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that

When a binding price floor is imposed on a market,

When a tax is placed on the buyers of cell phones, the size of the cell phone market

When a tax is placed on the sellers of cell phones, the size of the cell phone market

Figure 6-32 -Refer to Figure 6-32. If the government set a price floor at $55, would there be a shortage or surplus, and how large would be the shortage/surplus?

Price ceilings and price floors that are binding

Which of the following is not a result of rent control?

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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