Question 1

The minimum wage is more often binding for teenagers than for other members of the labor force.

Accepted Answer

A) True 
 B)False

Question 2

Figure 6-29
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-29. The buyers will bear a higher share of the tax burden than sellers if the demand is

Accepted Answer

A)  D1, and the supply is S1. 
B)  D2, and the supply is S1. 
C)  D1, and the supply is S2. 
D)  D2, and the supply is S2.

Question 3

A binding minimum wage tends to

Accepted Answer

A)  cause a labor surplus. 
B)  cause unemployment. 
C)  have the greatest impact in the market for teenage labor. 
D)  All of the above are correct.

Question 4

The minimum wage has its greatest impact on the market for

Accepted Answer

A)  female labor. 
B)  older labor. 
C)  black labor. 
D)  teenage labor.

Question 5

If a binding price ceiling is imposed on the baby formula market, then

Accepted Answer

A)  the quantity of baby formula demanded will increase. 
B)  the quantity of baby formula supplied will decrease. 
C)  a shortage of baby formula will develop. 
D)  All of the above are correct.

Question 6

In the short run, rent control causes the quantity supplied

Accepted Answer

A)  and quantity demanded to fall. 
B)  to fall and quantity demanded to rise. 
C)  to rise and quantity demanded to fall. 
D)  and quantity demanded to rise.

Question 7

The price received by sellers in a market will increase if the government decreases a

Accepted Answer

A)  binding price floor in that market. 
B)  binding price ceiling in that market. 
C)  tax on the good sold in that market. 
D)  None of the above is correct.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

If a tax is imposed on a market with inelastic demand and elastic supply, then

Accepted Answer

A)  buyers will bear most of the burden of the tax. 
B)  sellers will bear most of the burden of the tax. 
C)  the burden of the tax will be shared equally between buyers and sellers. 
D)  it is impossible to determine how the burden of the tax will be shared.

Question 10

A nonbinding price ceiling i) causes a surplus.
Ii) causes a shortage.
Iii) is set at a price above the equilibrium price.
Iv) is set at a price below the equilibrium price.

Accepted Answer

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

Question 11

Suppose the government wants to encourage Americans to exercise more, so it imposes a binding price ceiling on the market for in-home treadmills. As a result,

Accepted Answer

A)  the demand for treadmills will increase. 
B)  the supply of treadmills will decrease. 
C)  a shortage of treadmills will develop. 
D)  All of the above are correct.

Question 12

In a free, competitive market, what is the rationing mechanism?

Accepted Answer

A)  seller bias 
B)  buyer bias 
C)  government law 
D)  price

Question 13

Figure 6-36 
-Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer pays $4.

Accepted Answer

A) True 
 B)False

Question 14

Buyers and sellers always share the burden of a tax equally.

Accepted Answer

A) True 
 B)False

Question 15

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $20 per ticket, then the

Accepted Answer

A)  demand curve will shift upward by $30, and the price paid by buyers will decrease by less than $30. 
B)  demand curve will shift upward by $30, and the price paid by buyers will decrease by $30. 
C)  supply curve will shift downward by $30, and the effective price received by sellers will increase by less than $30. 
D)  supply curve will shift downward by $30, and the effective price received by sellers will increase by $30.

Question 16

Figure 6-34 
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how many units will be bought and sold in the market after the tax is imposed?

Accepted Answer

The answer of Figure 6-34 
-Refer to Figure 6-34. If...

Question 17

Figure 6-31 
-Refer to Figure 6-31. If the government set a price floor at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

The answer of Figure 6-31 
-Refer to Figure 6-31. If...

Question 18

If a binding price floor is imposed on the video game market, then

Accepted Answer

A)  the demand for video games will decrease. 
B)  the supply of video games will increase. 
C)  a surplus of video games will develop. 
D)  All of the above are correct.

Question 19

A price floor set above the equilibrium price is binding.

Accepted Answer

A) True 
 B)False

Question 20

Most of the burden of a luxury tax falls on the middle class workers who produce luxury goods rather than on the rich who buy them.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

The minimum wage is more often binding for teenagers than for other members of the labor force.

Figure 6-29 Suppose the government imposes a $2 on this market. -Refer to Figure 6-29. The buyers will bear a higher share of the tax burden than sellers if the demand is

A binding minimum wage tends to

The minimum wage has its greatest impact on the market for

If a binding price ceiling is imposed on the baby formula market, then

In the short run, rent control causes the quantity supplied

The price received by sellers in a market will increase if the government decreases a

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

If a tax is imposed on a market with inelastic demand and elastic supply, then

A nonbinding price ceiling i) causes a surplus. Ii) causes a shortage. Iii) is set at a price above the equilibrium price. Iv) is set at a price below the equilibrium price.

Suppose the government wants to encourage Americans to exercise more, so it imposes a binding price ceiling on the market for in-home treadmills. As a result,

In a free, competitive market, what is the rationing mechanism?

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer pays $4.

Buyers and sellers always share the burden of a tax equally.

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $20 per ticket, then the

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how many units will be bought and sold in the market after the tax is imposed?

Figure 6-31 -Refer to Figure 6-31. If the government set a price floor at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

If a binding price floor is imposed on the video game market, then

A price floor set above the equilibrium price is binding.

Most of the burden of a luxury tax falls on the middle class workers who produce luxury goods rather than on the rich who buy them.