Question 1

The mayor of Workerville proposes a local payroll tax to fund a new water park for the city.The mayor proposes to collect half the tax from workers and half the tax from firms.Workers will bear

Accepted Answer

A)   an equal share of the tax in comparison to firms.
B)   a greater share of the tax in comparison to firms.
C)   a smaller share of the tax in comparison to firms.
D)   All of the above are possible.E) B) and C)
F) None of the above

Question 2

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) None of the above

Question 3

Figure 6-11
 
-Refer to Figure 6-11.If the government imposes a price ceiling at $3,it would be

Accepted Answer

A)   binding if market demand is Demand A or Demand B.
B)   non-binding if market demand is Demand A or Demand B.
C)   binding if market demand is Demand A and non-binding if market demand is Demand B.
D)   non-binding if market demand is Demand A and binding if market demand is Demand B.E) A) and B)
F) A) and D)

Question 4

When a tax is imposed on the buyers of a good,the demand curve shifts

Accepted Answer

A)   upward by the amount of the tax.
B)   downward by the amount of the tax.
C)   upward by less than the amount of the tax.
D)   downward by less than the amount of the tax.E) A) and B)
F) B) and C)

Question 5

A binding price floor causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 6

Figure 6-3

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

Accepted Answer

A)   a shortage of wheat.
B)   equilibrium in the market.
C)   a surplus of wheat.
D)   lines of people waiting to buy wheat.E) None of the above
F) B) and C)

Question 7

If a good or service is sold in a competitive market free of government regulation,then the price of the good or service adjusts to balance supply and demand.

Accepted Answer

A) True 
 B)False

Question 8

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

Question 9

Figure 6-13
 
-Refer to Figure 6-13.In this market,a minimum wage of $7.25 is

Accepted Answer

A)   binding and creates a labor shortage.
B)   binding and creates unemployment.
C)   nonbinding and creates a labor shortage.
D)   nonbinding and creates neither a labor shortage nor unemployment.E) C) and D)
F) B) and D)

Question 10

When a tax is levied on buyers of tea,

Accepted Answer

A)   buyers of tea and sellers of tea both are made worse off.
B)   buyers of tea are made worse off, and the well-being of sellers is unaffected.
C)   buyers of tea are made worse off, and sellers of tea are made better off.
D)   the well-being of both buyers of tea and sellers of tea is unaffected.E) A) and C)
F) C) and D)

Question 11

A $3 tax levied on the buyers of shoes will cause the

Accepted Answer

A)   supply curve for shoes to shift down by $3.
B)   supply curve for shoes to shift up by $3.
C)   demand curve for shoes to shift down by $3.
D)   demand curve for shoes to shift up by $3.E) C) and D)
F) A) and B)

Question 12

A price ceiling set above the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-18
 
-Refer to Figure 6-18.How much tax revenue does this tax generate for the government?

Accepted Answer

A)   $75
B)   $125
C)   $175
D)   $300E) C) and D)
F) All of the above

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

If a tax is levied on the buyers of a product,then the demand curve will

Accepted Answer

A)   not shift.
B)   shift down.
C)   shift up.
D)   become flatter.E) C) and D)
F) All of the above

Question 16

Figure 6-21
 
-Refer to Figure 6-22.The amount of the tax per unit is

Accepted Answer

A)   $1.
B)   $1.50.
C)   $2.
D)   $3.E) B) and C)
F) A) and D)

Question 17

Figure 6-7
 
-Refer to Figure 6-7.For a price floor to be binding in this market,it would have to be set at

Accepted Answer

A)   any price below $6.
B)   a price between $3 and $6.
C)   a price between $6 and $9.
D)   any price above $6.E) A) and C)
F) A) and B)

Question 18

Opponents of the minimum wage point out that the minimum wage

Accepted Answer

A)   encourages teenagers to drop out of school.
B)   prevents some workers from getting needed on-the-job training.
C)   contributes to the problem of unemployment.
D)   All of the above are correct.E) B) and D)
F) A) and B)

Question 19

When a binding price floor is imposed on a market to benefit sellers,

Accepted Answer

A)   no sellers actually benefit.
B)   some sellers benefit, but no sellers are harmed.
C)   some sellers benefit, and some sellers are harmed.
D)   all sellers benefit.E) B) and C)
F) None of the above

Question 20

Figure 6-2
 
-Refer to Figure 6-2.The price ceiling

Accepted Answer

A)   causes a shortage of 45 units of the good.
B)   makes it necessary for sellers to ration the good.
C)   is not binding because it is set below the equilibrium price.
D)   Both a)  and b)  are correct.E) A) and C)
F) B) and D)

Exam 6: Supply, Demand, And Government Policies.

When a tax is levied on buyers of tea,

Correct AnswerverifiedShow Answer

Figure 6-2 -Refer to Figure 6-2.The price ceiling

Correct AnswerverifiedShow Answer

Figure 6-11 -Refer to Figure 6-11.If the government imposes a price ceiling at $3,it would be

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a good or service is sold in a competitive market free of government regulation,then the price of the good or service adjusts to balance supply and demand.

Correct AnswerverifiedShow Answer

Opponents of the minimum wage point out that the minimum wage

Correct AnswerverifiedShow Answer

Figure 6-7 -Refer to Figure 6-7.For a price floor to be binding in this market,it would have to be set at

Correct AnswerverifiedShow Answer

Figure 6-21 -Refer to Figure 6-22.The amount of the tax per unit is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a tax is imposed on the buyers of a good,the demand curve shifts

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

A binding price floor causes a shortage in the market.

Correct AnswerverifiedShow Answer

When a binding price floor is imposed on a market to benefit sellers,

Correct AnswerverifiedShow Answer

A $3 tax levied on the buyers of shoes will cause the

Correct AnswerverifiedShow Answer

If a tax is levied on the buyers of a product,then the demand curve will

Correct AnswerverifiedShow Answer

The mayor of Workerville proposes a local payroll tax to fund a new water park for the city.The mayor proposes to collect half the tax from workers and half the tax from firms.Workers will bear

Correct AnswerverifiedShow Answer

Figure 6-18 -Refer to Figure 6-18.How much tax revenue does this tax generate for the government?

Correct AnswerverifiedShow Answer

Figure 6-13 -Refer to Figure 6-13.In this market,a minimum wage of $7.25 is

Correct AnswerverifiedShow Answer

A price ceiling set above the equilibrium price causes a surplus in the market.

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

Correct Answer
verified