Question 1

Under rent control,landlords cease to be responsive to tenants' concerns about the quality of the housing because

Accepted Answer

A)   with rent control, the government guarantees landlords a minimum level of profit.
B)   they become resigned to the fact that many of their apartments are going to be vacant at any given time.
C)   with shortages and waiting lists, they have no incentive to maintain and improve their property.
D)   with rent control, it becomes the government's responsibility to maintain rental housing.E) A) and C)
F) A) and D)

Question 2

Which of the following would not interfere with market equilibria?

Accepted Answer

A)   a minimum wage
B)   a rent control
C)   a non-binding price floor
D)   a binding price ceilingE) A) and B)
F) None of the above

Question 3

Taxes levied on sellers and taxes levied on buyers are equivalent.

Accepted Answer

A) True 
 B)False

Question 4

Most labor economists believe that the supply of labor is

Accepted Answer

A)   less elastic than the demand, and, therefore, firms bear most of the burden of the payroll tax.
B)   less elastic than the demand, and, therefore, workers bear most of the burden of the payroll tax.
C)   more elastic than the demand, and, therefore, workers bear most of the burden of the payroll tax.
D)   more elastic than the demand, and, therefore, firms bear most of the burden of the payroll tax.E) B) and D)
F) B) and C)

Question 5

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

Accepted Answer

A)   shift down.
B)   shift up.
C)   become flatter.
D)   not shift.E) B) and D)
F) A) and C)

Question 6

A price ceiling caused the gasoline shortage of 1973 in the United States.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)   surplus of 40 units.
B)   surplus of 85 units.
C)   shortage of 45 units.
D)   shortage of 85 units.E) All of the above
F) B) and D)

Question 8

The tax burden falls more heavily on the side of the market that is more inelastic.

Accepted Answer

A) True 
 B)False

Question 9

Figure 6-6
 
-Refer to Figure 6-6.Which of the following statements is correct?

Accepted Answer

A)   A price ceiling set at $12 would be binding, but a price ceiling set at $8 would not be binding.
B)   A price floor set at $8 would be binding, but a price ceiling set at $8 would not be binding.
C)   A price ceiling set at $9 would result in a surplus.
D)   A price floor set at $11 would result in a surplus.E) A) and D)
F) C) and D)

Question 10

When free markets ration goods with prices,it is both efficient and impersonal.

Accepted Answer

A) True 
 B)False

Question 11

A tax of $1 on buyers always decreases the equilibrium price by $1.

Accepted Answer

A) True 
 B)False

Question 12

A large majority of economists favor eliminating the minimum wage.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)   supplied to exceed quantity demanded by 45 units.
B)   supplied to exceed quantity demanded by 85 units.
C)   demanded to exceed quantity supplied by 45 units.
D)   demanded to exceed quantity supplied by 85 units.E) B) and C)
F) All of the above

Question 14

A binding minimum wage creates a surplus of labor.

Accepted Answer

A) True 
 B)False

Question 15

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) All of the above
F) A) and B)

Question 16

A tax on the sellers of cameras encourages

Accepted Answer

A)   sellers to supply a smaller quantity at every price.
B)   buyers to demand a smaller quantity at every price.
C)   sellers to supply a larger quantity at every price.
D)   Both a)  and b)  are correct.E) None of the above
F) B) and D)

Question 17

Which of the following is not an example of a public policy?

Accepted Answer

A)   rent-control laws
B)   minimum-wage laws
C)   taxes
D)   equilibrium lawsE) A) and B)
F) None of the above

Question 18

Table 6-2
 
-Refer to Table 6-2.A price floor set at $5 will

Accepted Answer

A)   be binding and will result in a surplus of 50 units.
B)   be binding and will result in a surplus of 75 units.
C)   be binding and will result in a surplus of 125 units.
D)   not be binding.E) A) and B)
F) None of the above

Question 19

The burden that results from a tax on yachts falls more heavily on the buyers of yachts than on the sellers of yachts.

Accepted Answer

A) True 
 B)False

Question 20

If the government removes a tax on a good,then the price paid by buyers will

Accepted Answer

A)   increase, and the price received by sellers will increase.
B)   increase, and the price received by sellers will decrease.
C)   decrease, and the price received by sellers will increase.
D)   decrease, and the price received by sellers will decrease.E) A) and C)
F) All of the above

Exam 6: Supply, Demand, And Government Policies.

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

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A binding minimum wage creates a surplus of labor.

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The burden that results from a tax on yachts falls more heavily on the buyers of yachts than on the sellers of yachts.

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Taxes levied on sellers and taxes levied on buyers are equivalent.

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A price ceiling caused the gasoline shortage of 1973 in the United States.

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Under rent control,landlords cease to be responsive to tenants' concerns about the quality of the housing because

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Most labor economists believe that the supply of labor is

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A tax on the sellers of cameras encourages

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Figure 6-6 -Refer to Figure 6-6.Which of the following statements is correct?

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The tax burden falls more heavily on the side of the market that is more inelastic.

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Table 6-2 -Refer to Table 6-2.A price floor set at $5 will

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Which of the following is not an example of a public policy?

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A binding minimum wage

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If the government removes a tax on a good,then the price paid by buyers will

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Which of the following would not interfere with market equilibria?

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When free markets ration goods with prices,it is both efficient and impersonal.

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

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A large majority of economists favor eliminating the minimum wage.

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A tax of $1 on buyers always decreases the equilibrium price by $1.

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

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