Question 1

Suppose the government imposes a 30-cent tax on the sellers of soft drinks. Which of the following is not correct? The tax would

Accepted Answer

A)  shift the supply curve upward by 30 cents.
B)  raise the equilibrium price by 30 cents.
C)  reduce the equilibrium quantity.
D)  discourage market activity.E) B) and C)
F) A) and D)

Question 2

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.E) A) and D)
F) B) and D)

Question 3

Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

Accepted Answer

A) True 
 B)False

Question 4

When a binding price ceiling is imposed on a market to benefit buyers,

Accepted Answer

A)  no buyers actually benefit.
B)  some buyers benefit, but no buyers are harmed.
C)  some buyers benefit, and some buyers are harmed.
D)  all buyers benefit.E) A) and B)
F) All of the above

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Figure 6-33 
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the sellers in this market?

Accepted Answer

The burden...

Question 7

A tax on the buyers of cereal will increase the price of cereal paid by buyers,

Accepted Answer

A)  decrease the effective price of cereal received by sellers, and decrease the equilibrium quantity of cereal.
B)  decrease the effective price of cereal received by sellers, and increase the equilibrium quantity of cereal.
C)  increase the effective price of cereal received by sellers, and decrease the equilibrium quantity of cereal.
D)  increase the effective price of cereal received by sellers, and increase the equilibrium quantity of cereal.E) A) and B)
F) C) and D)

Question 8

If the government passes a law requiring buyers of college textbooks to send $5 to the government for every textbook they buy, then

Accepted Answer

A)  the demand curve for textbooks shifts downward by $5.
B)  buyers of textbooks pay $5 more per textbook than they were paying before the tax.
C)  sellers of textbooks are unaffected by the tax.
D)  All of the above are correct.E) B) and C)
F) A) and B)

Question 9

Figure 6-1
Panel (a) 
Panel (b)   
-Refer to Figure 6-1. A binding price ceiling is shown in

Accepted Answer

A)  panel (a)  only.
B)  panel (b)  only.
C)  both panel (a)  and panel (b) .
D)  neither panel (a)  nor panel (b) .E) A) and C)
F) A) and B)

Question 10

A tax on sellers and an increase in input prices affect the supply curve in the same way.

Accepted Answer

A) True 
 B)False

Question 11

A binding minimum wage

Accepted Answer

A)  alters both the quantity demanded and quantity supplied of labor.
B)  affects only the quantity of labor demanded; it does not affect the quantity of labor supplied.
C)  has no effect on the quantity of labor demanded or the quantity of labor supplied.
D)  causes only temporary unemployment because the market will adjust and eliminate any temporary surplus of workers.E) A) and C)
F) C) and D)

Question 12

Figure 6-23 
-Suppose the government imposes a $40 tax on the buyers of refrigerators. The tax would

Accepted Answer

A)  shift the demand curve downward by less than $40.
B)  raise the equilibrium price by $40.
C)  create a $20 tax burden each for buyers and sellers.
D)  discourage market activity.E) A) and B)
F) A) and C)

Question 13

Figure 6-3
Panel (a) 
Panel (b)   
-Refer to Figure 6-3. In panel (a) , there will be

Accepted Answer

A)  a shortage.
B)  equilibrium in the market.
C)  a surplus.
D)  lines of people waiting to buy the good.E) All of the above
F) B) and C)

Question 14

Figure 6-6 
-Refer to Figure 6-6. If the government imposes a price floor of $10 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 10 units.E) A) and B)
F) None of the above

Question 15

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 16

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Accepted Answer

A)  the supply curve for mopeds shifts downward by $200.
B)  sellers of mopeds receive $200 less per moped than they were receiving before the tax.
C)  buyers of mopeds are unaffected by the tax.
D)  None of the above is correct.E) None of the above
F) B) and C)

Question 17

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.E) A) and C)
F) None of the above

Question 18

Figure 6-30
Panel (a) 
Panel (b)    Panel (c)  
-Refer to Figure 6-30. In which market will the tax burden be most equally divided between buyers and sellers?

Accepted Answer

A)  the market shown in panel (a) .
B)  the market shown in panel (b) .
C)  the market shown in panel (c) .
D)  All of the above are correct.E) None of the above
F) B) and C)

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Figure 6-19 
-Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Accepted Answer

A)  less than 50 units
B)  50 units
C)  between 50 units and 100 units
D)  greater than 100 unitsE) B) and C)
F) A) and B)

Exam 6: Supply, Demand, and Government Policies

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price floor of $10 on this market, then there will be

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Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. In panel (a) , there will be

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A tax on the buyers of cereal will increase the price of cereal paid by buyers,

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

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A tax on sellers and an increase in input prices affect the supply curve in the same way.

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Figure 6-19 -Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

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Figure 6-30 Panel (a) Panel (b) Panel (c) -Refer to Figure 6-30. In which market will the tax burden be most equally divided between buyers and sellers?

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Figure 6-23 -Suppose the government imposes a $40 tax on the buyers of refrigerators. The tax would

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Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the sellers in this market?

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

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If the government passes a law requiring buyers of college textbooks to send $5 to the government for every textbook they buy, then

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A binding minimum wage

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

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

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If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

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When a binding price ceiling is imposed on a market to benefit buyers,

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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.

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Suppose the government imposes a 30-cent tax on the sellers of soft drinks. Which of the following is not correct? The tax would

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Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

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Figure 6-1 Panel (a) Panel (b) -Refer to Figure 6-1. A binding price ceiling is shown in

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The burden...
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