Question 1

A tax on sellers increases the quantity of the good sold in the market.

Accepted Answer

A) True 
 B)False

Question 2

The minimum wage has its greatest impact on the market for teenage labor.

Accepted Answer

A) True 
 B)False

Question 3

A price floor set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 4

Figure 6-13
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-13. If the government imposes a price ceiling of $6 on this market, then there will be

Accepted Answer

A)  no shortage.
B)  a shortage of 5 units.
C)  a shortage of 10 units.
D)  a shortage of 20 units.E) B) and C)
F) A) and C)

Question 5

Figure 6-22 
-Refer to Figure 6-22. How much tax revenue does this tax generate for the government?

Accepted Answer

A)  $80.
B)  $60.
C)  $15.
D)  $45.E) A) and C)
F) A) and D)

Question 6

Figure 6-8 
-Refer to Figure 6-8. If the government imposes a price ceiling of $2 on this market, then there will be

Accepted Answer

A)  no shortage of the good.
B)  a shortage of 10 units of the good.
C)  a shortage of 20 units of the good.
D)  a shortage of 30 units of the good.E) A) and C)
F) B) and D)

Question 7

If a price ceiling is not binding, then it will have no effect on the market.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

One disadvantage of government subsidies over price controls is that subsidies

Accepted Answer

A)  prevent the attainment of equilibrium in the markets in which they are imposed.
B)  make higher taxes necessary.
C)  are always unfair to those with low incomes.
D)  cause unemployment.E) B) and C)
F) A) and B)

Question 10

A binding minimum wage may not help all workers, but it does not hurt any workers.

Accepted Answer

A) True 
 B)False

Question 11

If a nonbinding price ceiling is imposed on a market, then the

Accepted Answer

A)  quantity sold in the market will decrease.
B)  quantity sold in the market will stay the same.
C)  price in the market will increase.
D)  price in the market will decrease.E) B) and D)
F) B) and C)

Question 12

A binding price floor may not help all sellers, but it does not hurt any sellers.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-18
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-18. The effective price that sellers receive after the tax is imposed is

Accepted Answer

A)  $6.
B)  $10.
C)  $16.
D)  $24.E) All of the above
F) A) and B)

Question 15

Table 6-2 
-Refer to Table 6-2. A price floor set at $20 results in

Accepted Answer

A)  75 units sold.
B)  125 units sold.
C)  200 units sold.
D)  275 units sold.E) A) and B)
F) A) and C)

Question 16

Price floors are typically imposed to benefit buyers.

Accepted Answer

A) True 
 B)False

Question 17

Figure 6-35 
-Refer to Figure 6-35. A price ceiling set at $70 would create a shortage of 40 units.

Accepted Answer

A) True 
 B)False

Question 18

Figure 6-4 
-Refer to Figure 6-4. A government-imposed price of $6 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.E) B) and C)
F) A) and C)

Question 19

If the supply curve is more price elastic than the demand curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Accepted Answer

When the supply curve is more price elas...

Question 20

Figure 6-27
This figure shows the market demand and market supply curves for good Z. 
-Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. Which of the following is correct?

Accepted Answer

A)  Buyers and sellers will share the burden of the tax equally.
B)  Buyers will bear more of the burden of the tax than sellers will.
C)  Sellers will bear more of the burden of the tax than buyers will.
D)  Any of the above is possible.E) A) and C)
F) B) and D)

Exam 6: Supply, Demand, and Government Policies

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

Correct AnswerverifiedShow Answer

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. If the government imposes a price ceiling of $6 on this market, then there will be

Correct AnswerverifiedShow Answer

One disadvantage of government subsidies over price controls is that subsidies

Correct AnswerverifiedShow Answer

A price floor set above the equilibrium price is not binding.

Correct AnswerverifiedShow Answer

Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The effective price that sellers receive after the tax is imposed is

Correct AnswerverifiedShow Answer

A binding minimum wage may not help all workers, but it does not hurt any workers.

Correct AnswerverifiedShow Answer

Figure 6-4 -Refer to Figure 6-4. A government-imposed price of $6 in this market is an example of a

Correct AnswerverifiedShow Answer

If a nonbinding price ceiling is imposed on a market, then the

Correct AnswerverifiedShow Answer

Figure 6-22 -Refer to Figure 6-22. How much tax revenue does this tax generate for the government?

Correct AnswerverifiedShow Answer

Figure 6-8 -Refer to Figure 6-8. If the government imposes a price ceiling of $2 on this market, then there will be

Correct AnswerverifiedShow Answer

A tax on sellers increases the quantity of the good sold in the market.

Correct AnswerverifiedShow Answer

The minimum wage has its greatest impact on the market for teenage labor.

Correct AnswerverifiedShow Answer

Table 6-2 -Refer to Table 6-2. A price floor set at $20 results in

Correct AnswerverifiedShow Answer

Figure 6-35 -Refer to Figure 6-35. A price ceiling set at $70 would create a shortage of 40 units.

Correct AnswerverifiedShow Answer

A binding price floor may not help all sellers, but it does not hurt any sellers.

Correct AnswerverifiedShow Answer

If a price ceiling is not binding, then it will have no effect on the market.

Correct AnswerverifiedShow Answer

Price floors are typically imposed to benefit buyers.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the supply curve is more price elastic than the demand curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Correct AnswerverifiedWhen the supply curve is more price elas...View AnswerShow Answer

Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. Which of the following is correct?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
When the supply curve is more price elas...
View Answer

Correct Answer
verified