Question 1

In an unregulated labor market,the wage adjusts to balance labor supply and labor demand.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)   $2
B)   $3
C)   $4
D)   $5E) A) and B)
F) A) and C)

Question 3

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) A) and D)
F) B) and D)

Question 4

Figure 6-7 
-Refer to Figure 6-7.Which of the following statements is correct?

Accepted Answer

A)   A price ceiling set at $6 will be binding and will result in a shortage of 8 units.
B)   A price ceiling set at $6 will be binding and will result in a shortage of 4 units.
C)   A price ceiling set at $16 will be binding and will result in a shortage of 12 units.
D)   A price ceiling set at $16 will be binding and will result in a shortage of 6 units.E) None of the above
F) C) and D)

Question 5

If a tax is levied on the sellers of sugar,then

Accepted Answer

A)   buyers will bear the entire burden of the tax.
B)   sellers will bear the entire burden of the tax.
C)   buyers and sellers will share the burden of the tax.
D)   the government will bear the entire burden of the tax.E) A) and B)
F) A) and C)

Question 6

Which of the following is not a function of prices in a market system?

Accepted Answer

A)   Prices have the crucial job of balancing supply and demand.
B)   Prices send signals to buyers and sellers to help them make rational economic decisions.
C)   Prices coordinate economic activity.
D)   Prices ensure an equal distribution of goods and services among consumers.E) All of the above
F) A) and D)

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Figure 6-8 1 before 1973;they paid a price of P2 after OPEC increased the price of crude oil in 1973,and there was a shortage of gasoline at that price. B)  Buyers of gasoline paid a price of P1 before 1973;they paid a price of P3 after OPEC increased the price of crude oil in 1973,and there was a shortage of gasoline at that price. C)  Buyers of gasoline paid a price of P2 before 1973;they paid a price of P3 after OPEC increased the price of crude oil in 1973,with no shortage of gasoline at that price. D)  The price ceiling was binding before 1973;the price ceiling was no longer binding after OPEC increased the price of crude oil in 1973." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 6-8.Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

Accepted Answer

A)   Buyers of gasoline paid a price of P1 before 1973;they paid a price of P2 after OPEC increased the price of crude oil in 1973,and there was a shortage of gasoline at that price.
B)   Buyers of gasoline paid a price of P1 before 1973;they paid a price of P3 after OPEC increased the price of crude oil in 1973,and there was a shortage of gasoline at that price.
C)   Buyers of gasoline paid a price of P2 before 1973;they paid a price of P3 after OPEC increased the price of crude oil in 1973,with no shortage of gasoline at that price.
D)   The price ceiling was binding before 1973;the price ceiling was no longer binding after OPEC increased the price of crude oil in 1973.E) None of the above
F) A) and D)

Question 9

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Accepted Answer

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

Question 10

Figure 6-16
Panel (a) Panel (b)    Panel (c)  
-Refer to Figure 6-16.In which market will the majority of the tax burden fall on buyers?

Accepted Answer

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

Question 11

A tax imposed on the sellers of a good will

Accepted Answer

A)   lower the price paid by buyers and lower the equilibrium quantity.
B)   lower the price paid by buyers and raise the equilibrium quantity.
C)   lower the effective price received by sellers and lower the equilibrium quantity.
D)   lower the effective price received by sellers and raise the equilibrium quantity.E) C) and D)
F) A) and B)

Question 12

Using the graph shown,answer the following questions.
What was the equilibrium price in this market before the tax?
What is the amount of the tax?
How much of the tax will the buyers pay?
How much of the tax will the sellers pay?
How much will the buyer pay for the product after the tax is imposed?
How much will the seller receive after the tax is imposed?
As a result of the tax,what has happened to the level of market activity?

Accepted Answer

a.
$6
b.
$4
c.
$1
d.
$3
e.
$7
...

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

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

Question 15

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

Accepted Answer

A)   waiting lists
B)   race
C)   price
D)   bribesE) A) and B)
F) A) and C)

Question 16

If a price floor is a binding constraint on a market,then

Accepted Answer

A)   the equilibrium price must be above the price floor.
B)   the quantity demanded must exceed the quantity supplied.
C)   sellers cannot sell all they want to sell at the price floor.
D)   buyers cannot buy all they want to buy at the price floor.E) B) and C)
F) A) and D)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Figure 6-13
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-13.The amount of the tax per unit is

Accepted Answer

A)   $6.
B)   $8.
C)   $14.
D)   $18.E) All of the above
F) None of the above

Exam 6: Supply, Demand, and Government Policies

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Correct Answer
verified

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

Correct Answer
verified

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.

Correct Answer
verified

If a price floor is a binding constraint on a market,then

Correct Answer
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Figure 6-7 -Refer to Figure 6-7.Which of the following statements is correct?

Correct Answer
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If a tax is levied on the sellers of sugar,then

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

Correct Answer
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Which of the following is not a function of prices in a market system?

Correct Answer
verified

One disadvantage of government subsidies over price controls is that subsidies

Correct Answer
verified

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

Correct Answer
verified

Figure 6-13 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-13.The amount of the tax per unit is

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

Correct Answer
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Correct Answer
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a.
$6
b.
$4
c.
$1
d.
$3
e.
$7
...
View Answer

Figure 6-8 -Refer to Figure 6-8.Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

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

Correct Answer
verified

A tax imposed on the sellers of a good will

Correct Answer
verified

In an unregulated labor market,the wage adjusts to balance labor supply and labor demand.

Correct Answer
verified

Figure 6-16 Panel (a) Panel (b) Panel (c) -Refer to Figure 6-16.In which market will the majority of the tax burden fall on buyers?

Correct Answer
verified

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

Correct Answer
verified

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

If a price floor is a binding constraint on a market,then

Correct AnswerverifiedShow Answer

Figure 6-7 -Refer to Figure 6-7.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

If a tax is levied on the sellers of sugar,then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not a function of prices in a market system?

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 causes quantity supplied to exceed quantity demanded.

Correct AnswerverifiedShow Answer

Figure 6-13 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-13.The amount of the tax per unit is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answerverifieda.$6b.$4c.$1d.$3e.$7...View AnswerShow Answer

Figure 6-8 -Refer to Figure 6-8.Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A tax imposed on the sellers of a good will

Correct AnswerverifiedShow Answer

In an unregulated labor market,the wage adjusts to balance labor supply and labor demand.

Correct AnswerverifiedShow Answer

Figure 6-16 Panel (a) Panel (b) Panel (c) -Refer to Figure 6-16.In which market will the majority of the tax burden fall on buyers?

Correct AnswerverifiedShow Answer

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

Correct AnswerverifiedShow Answer

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Correct AnswerverifiedShow Answer

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a.
$6
b.
$4
c.
$1
d.
$3
e.
$7
...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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