Question 1

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 2

Figure 6-29
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-29. The buyers and sellers will bear an equal share of the tax burden 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 tax on buyers shifts the demand curve and the supply curve.

Accepted Answer

A) True 
 B)False

Question 4

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

Accepted Answer

A) True 
 B)False

Question 5

Figure 6-22 
-Refer to Figure 6-22. Sellers pay how much of the tax per unit?

Accepted Answer

A)  $0.50. 
B)  $1.50. 
C)  $3.00. 
D)  $5.00.

Question 6

The quantity sold 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)  decreases a tax on the good sold in that market. 
D)  More than one of the above is correct.

Question 7

Figure 6-32 
-Refer to Figure 6-32. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

The answer of Figure 6-32 
-Refer to Figure 6-32. If...

Question 8

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 9

Figure 6-8 
-Refer to Figure 6-8. If the government imposes a price floor of $5 on this market, then there will be

Accepted Answer

A)  no surplus of the good. 
B)  a surplus of 5 units of the good. 
C)  a surplus of 10 units of the good. 
D)  a surplus of 15 units of the good.

Question 10

A tax on sellers increases supply.

Accepted Answer

A) True 
 B)False

Question 11

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 12

If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Accepted Answer

The answer of If the demand curve is more price...

Question 13

When a payroll tax is enacted, the wage received by workers

Accepted Answer

A)  falls, and the wage paid by firms rises. 
B)  falls, and the wage paid by firms falls. 
C)  rises, and the wage paid by firms falls. 
D)  rises, and the wage paid by firms rises.

Question 14

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

Accepted Answer

A)  increases a binding price floor in that market. 
B)  increases a binding price ceiling in that market. 
C)  decreases a tax on the good sold in that market. 
D)  All of the above are correct.

Question 15

When a binding price ceiling is imposed on a market,

Accepted Answer

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

Question 16

In the housing market, supply and demand are

Accepted Answer

A)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
B)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run. 
C)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run. 
D)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.

Question 17

As a rationing mechanism, discrimination according to seller bias is

Accepted Answer

A)  efficient and fair. 
B)  efficient, but potentially unfair. 
C)  inefficient, but fair. 
D)  inefficient and potentially unfair.

Question 18

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 19

A legal maximum on the price at which a good can be sold is called a price

Accepted Answer

A)  floor. 
B)  subsidy. 
C)  support. 
D)  ceiling.

Question 20

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 floor at $13 for this product. Is this price floor binding, and what will be the size of the shortage/surplus in this market?

Accepted Answer

The answer of Scenario 6-2
Suppose demand for a product is...

Exam 6: Supply, Demand, and Government Policies

The minimum wage has its greatest impact on the market for

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

A tax on buyers shifts the demand curve and the supply curve.

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

Figure 6-22 -Refer to Figure 6-22. Sellers pay how much of the tax per unit?

The quantity sold in a market will increase if the government

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

Figure 6-8 -Refer to Figure 6-8. If the government imposes a price floor of $5 on this market, then there will be

A tax on sellers increases supply.

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

If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

When a payroll tax is enacted, the wage received by workers

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

When a binding price ceiling is imposed on a market,

In the housing market, supply and demand are

As a rationing mechanism, discrimination according to seller bias is

A price ceiling is a legal minimum on the price at which a good or service can be sold.

A legal maximum on the price at which a good can be sold is called a price