Question 1

An excise tax on cigarettes

Accepted Answer

A)  will cause both the market price and quantity to increase 
B)  will cause both the market price and quantity to fall 
C)  will cause the market price to rise and the market quantity to fall 
D)  will cause the market price to fall and the market quantity to rise 
E)  None of the above.

Question 2

If the government wants to manipulate the equilibrium price,it will normally create a price floor or price ceiling;if the government want to manipulate the equilibrium quantity,it will normally impose taxes or award subsidies.

Accepted Answer

A) True 
 B)False

Question 3

Federal subsidies to higher education benefit

Accepted Answer

A)  only the student 
B)  only universities 
C)  both universities and students 
D)  neither universities nor students

Question 4

The incidence of an excise tax

Accepted Answer

A)  refers to who really pays it 
B)  always falls on suppliers 
C)  is equally divided between demanders and suppliers 
D)  is determined by the number of demanders 
E)  is decided by the government when the tax is imposed

Question 5

A government-imposed price ceiling set below the market's equilibrium price will create an excess demand for a product.As a result of the excess demand,either the demand curve will tend to shift to the left or the supply curve will shift to the right-or both.

Accepted Answer

A) True 
 B)False

Question 6

Whether an excise tax is imposed on a demander or supplier is irrelevant because

Accepted Answer

A)  in either case the price that the demander has to pay will decrease;while the price the supplier receives will increase 
B)  in either case the price that the demander has to pay will increase;while the price the supplier receives will decrease 
C)  either situation will create excess demand 
D)  either situation will create excess supply 
E)  none of these are correct

Question 7

In what way is the result of an excise tax imposed on either demanders or suppliers similar to the result of a price ceiling?

Accepted Answer

A)  The amount that consumers pay for the good will be less than they previously paid 
B)  The amount of the good that will be traded in the market will be less than previously traded 
C)  both price ceilings and excise taxes create excess demand 
D)  The amount that consumers pay for the good will be greater than they previously paid 
E)  both price floors and excise taxes create excess supply

Question 8

Federal subsidies to higher education have the effect of

Accepted Answer

A)  increasing the number of people seeking higher education and lowering tuition 
B)  increasing the number of people seeking higher education and raising tuition 
C)  decreasing the number of people seeking higher education and lowering tuition 
D)  decreasing the number of people seeking higher education and raising tuition

Question 9

In what way is the result of a subsidy given to either demanders or suppliers similar to the result of a price ceiling?

Accepted Answer

A)  The amount that consumers pay for the good will be less than they previously paid 
B)  The amount of the good that will be traded in the market will be less than previously traded 
C)  both price ceilings and subsidies create excess demand 
D)  The amount that consumers pay for the good will be greater than they previously paid 
E)  both price floors and excise taxes create excess supply

Question 10

If an excise tax is imposed on restaurant meals,

Accepted Answer

A)  fewer meals will be produced and sold 
B)  more meals will be produced and sold 
C)  the government's tax revenue will fall 
D)  the market price of meals will decrease 
E)  restaurants will sell more meals,but at a lower price per meal

Question 11

A stock variable

Accepted Answer

A)  measures a process that takes place over a period of time 
B)  is used often used to measure the quantity demanded of a good at various prices 
C)  is related to inventory controls 
D)  measures a quantity in existence at a moment in time 
E)  is a definition unique to economics

Question 12

-In Figure 4-5,if the government imposes a price floor of $2,the result will be

Accepted Answer

A)  equilibrium 
B)  no different than before the minimum price is imposed 
C)  a shortage 
D)  that the demand curve will shift leftward 
E)  a surplus

Question 13

Federal subsidies to higher education have the effect of

Accepted Answer

A)  increasing the demand for higher education 
B)  increasing the supply of higher education 
C)  decreasing the demand for higher education 
D)  decreasing the supply of higher education

Exam 4: Working With Supply and Demand

An excise tax on cigarettes

If the government wants to manipulate the equilibrium price,it will normally create a price floor or price ceiling;if the government want to manipulate the equilibrium quantity,it will normally impose taxes or award subsidies.

Federal subsidies to higher education benefit

The incidence of an excise tax

A government-imposed price ceiling set below the market's equilibrium price will create an excess demand for a product.As a result of the excess demand,either the demand curve will tend to shift to the left or the supply curve will shift to the right-or both.

Whether an excise tax is imposed on a demander or supplier is irrelevant because

In what way is the result of an excise tax imposed on either demanders or suppliers similar to the result of a price ceiling?

Federal subsidies to higher education have the effect of

In what way is the result of a subsidy given to either demanders or suppliers similar to the result of a price ceiling?

If an excise tax is imposed on restaurant meals,

A stock variable

-In Figure 4-5,if the government imposes a price floor of $2,the result will be

Federal subsidies to higher education have the effect of