Question 1

Figure 6-15
 
-Refer to Figure 6-15.Suppose a tax of $2 per unit is imposed on this market.How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)   $3
B)   between $3 and $5
C)   between $5 and $7
D)   $7E) All of the above
F) None of the above

Question 2

An outcome that can result from either a price ceiling or a price floor is

Accepted Answer

A)   a surplus in the market.
B)   a shortage in the market.
C)   a nonbinding price control.
D)   long lines of frustrated buyers.E) A) and B)
F) B) and C)

Question 3

Figure 6-25

-Refer to Figure 6-25.In which market will the tax burden be most equally divided between buyers and sellers?

Accepted Answer

A)   market (a) 
B)   market (b) 
C)   market (c) 
D)   All of the above are correct.E) B) and D)
F) A) and B)

Question 4

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) A) and C)
F) C) and D)

Question 5

Suppose that the demand for digital cameras is elastic,and the supply of digital cameras is inelastic.A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

Accepted Answer

A)   less than $10.
B)   $10.
C)   between $10 and $20.
D)   $20.E) All of the above
F) C) and D)

Question 6

Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?

Accepted Answer

A)   Policymakers have studied the effects of the price ceiling carefully, and they recognize that the price ceiling is advantageous for society as a whole.
B)   Buyers of milk, recognizing that the price ceiling is good for them, have pressured policymakers into imposing the price ceiling.
C)   Sellers of milk, recognizing that the price ceiling is good for them, have pressured policymakers into imposing the price ceiling.
D)   Buyers and sellers of milk have agreed that the price ceiling is good for both of them and have therefore pressured policymakers into imposing the price ceiling.E) B) and C)
F) A) and B)

Question 7

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

Accepted Answer

A)   every seller in the market benefits.
B)   all buyers and sellers benefit.
C)   every seller who wants to sell the good will be able to do so, but only if he appeals to the personal biases of the buyers.
D)   some sellers will not be able to sell any amount of the good.E) B) and C)
F) A) and B)

Question 8

The minimum wage was instituted to ensure workers

Accepted Answer

A)   a middle-class standard of living.
B)   employment.
C)   a minimally adequate standard of living.
D)   unemployment compensation.E) A) and C)
F) A) and B)

Question 9

Since half of the FICA tax is paid by firms and the other half is paid by workers,the burden of the tax must fall equally on firms and workers.

Accepted Answer

A) True 
 B)False

Question 10

Figure 6-26
 
-Refer to Figure 6-26.A price floor set at $40 would create a surplus of 20 units.

Accepted Answer

A) True 
 B)False

Question 11

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.The mayor will be able to successfully divide the burden of the tax equally if the

Accepted Answer

A)   demand for labor is more elastic than the supply of labor.
B)   supply of labor is more elastic than the demand for labor.
C)   demand for labor and supply of labor are equally elastic.
D)   It is not possible for the tax burden to fall equally on firms and workers.E) A) and D)
F) B) and D)

Question 12

Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is correct?

Accepted Answer

A)   Rent control and the minimum wage are both examples of price ceilings.
B)   Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor.
C)   Rent control is an example of a price floor, and the minimum wage is an example of a price ceiling.
D)   Rent control and the minimum wage are both examples of price floors.E) A) and C)
F) A) and D)

Question 14

Price ceilings are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 15

Figure 6-3

-Refer to Figure 6-3.A binding price floor is shown in

Accepted Answer

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

Question 16

States in the U.S.may mandate minimum wages above the federal level.

Accepted Answer

A) True 
 B)False

Question 17

When policymakers set prices by legal decree,they obscure the signals that normally guide the allocation of society's resources.

Accepted Answer

A) True 
 B)False

Question 18

Figure 6-6
 
-Refer to Figure 6-6.If the government imposes a price ceiling of $12 on this market,then there will be

Accepted Answer

A)   no shortage.
B)   a shortage of 10 units.
C)   a shortage of 20 units.
D)   a shortage of 40 units.E) A) and D)
F) A) and C)

Question 19

Table 6-1
 
-Refer to Table 6-1.Which of the following price floors would be binding in this market?

Accepted Answer

A)   $1
B)   $2
C)   $3
D)   $4E) A) and D)
F) B) and C)

Question 20

Figure 6-4
 
-Refer to Figure 6-4.A government-imposed price of $12 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) All of the above
F) None of the above

Exam 6: Supply, Demand, And Government Policies.

The minimum wage was instituted to ensure workers

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

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Figure 6-3 -Refer to Figure 6-3.A binding price floor is shown in

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Figure 6-15 -Refer to Figure 6-15.Suppose a tax of $2 per unit is imposed on this market.How much will buyers pay per unit after the tax is imposed?

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States in the U.S.may mandate minimum wages above the federal level.

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Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

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Which of the following is correct?

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Table 6-1 -Refer to Table 6-1.Which of the following price floors would be binding in this market?

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

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Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?

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Figure 6-26 -Refer to Figure 6-26.A price floor set at $40 would create a surplus of 20 units.

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Price ceilings are typically imposed to benefit sellers.

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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.The mayor will be able to successfully divide the burden of the tax equally if the

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When policymakers set prices by legal decree,they obscure the signals that normally guide the allocation of society's resources.

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Figure 6-25 -Refer to Figure 6-25.In which market will the tax burden be most equally divided between buyers and sellers?

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Suppose that the demand for digital cameras is elastic,and the supply of digital cameras is inelastic.A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

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An outcome that can result from either a price ceiling or a price floor is

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Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $12 in this market is an example of a

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Figure 6-6 -Refer to Figure 6-6.If the government imposes a price ceiling of $12 on this market,then there will be

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Since half of the FICA tax is paid by firms and the other half is paid by workers,the burden of the tax must fall equally on firms and workers.

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