Question 1

The wedge between the buyers' price and the sellers' price is the same,regardless of whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 2

A binding price ceiling causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 3

Figure 6-20 
-Refer to Figure 6-20.What is the amount of the tax per unit?

Accepted Answer

A)   $8
B)   $6
C)   $4
D)   $2E) All of the above
F) C) and D)

Question 4

Other than OPEC,the shortage of gasoline in the U.S.in the 1970s could also be blamed on

Accepted Answer

A)   a sharp increase in the demand for gasoline that was brought on by the Vietnam War.
B)   the government's policy of maintaining a price ceiling on gasoline.
C)   an indifference among U.S.consumers toward conservation.
D)   the lack of substitutes for crude oil.E) All of the above
F) None of the above

Question 5

Figure 6-14
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-14.The per-unit burden of the tax on sellers is

Accepted Answer

A)   $6.
B)   $8.
C)   $10.
D)   $14.E) A) and B)
F) B) and D)

Question 6

A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

Accepted Answer

A) True 
 B)False

Question 7

When a free market for a good reaches equilibrium,anyone who is willing and able to sell at the market price can sell the good.

Accepted Answer

A) True 
 B)False

Question 8

Table 6-4
The following table contains the demand schedule and supply schedule for a market for a particular good.Suppose sellers of the good successfully lobby Congress to impose a price floor $3 above the equilibrium price in this market.
 
-Refer to Table 6-4.Following the imposition of a price floor $3 above the equilibrium price,irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor.The resulting market price is

Accepted Answer

A)   $2.
B)   $3.
C)   $4.
D)   $5.E) B) and D)
F) None of the above

Question 9

Figure 6-7 
-Refer to Figure 6-7.Which of the following price controls would cause a shortage of 20 units of the good?

Accepted Answer

A)   a price ceiling set at $4
B)   a price ceiling set at $5
C)   a price floor set at $7
D)   a price floor set at $8E) None of the above
F) All of the above

Question 10

A large majority of economists favor eliminating the minimum wage.

Accepted Answer

A) True 
 B)False

Question 11

Figure 6-26 
-Refer to Figure 6-26.A price ceiling set at $30 would create a shortage of 20 units.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-16 
-Refer to Figure 6-16.Suppose a tax of $5 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) B) and D)
F) B) and C)

Question 14

In the 1970s,long lines at gas stations in the United States were primarily a result of the fact that

Accepted Answer

A)   OPEC raised the price of crude oil in world markets.
B)   U.S.gasoline producers raised the price of gasoline.
C)   the U.S.government maintained a price ceiling on gasoline.
D)   Americans typically commuted long distances.E) None of the above
F) A) and D)

Question 15

If a tax is levied on the sellers of a product,then there will be a(n)

Accepted Answer

A)   downward shift of the demand curve.
B)   upward shift of the demand curve.
C)   movement up and to the left along the demand curve.
D)   movement down and to the right along the demand curve.E) A) and B)
F) B) and C)

Question 16

Table 6-1
 
-Refer to Table 6-1.Suppose the government imposes a price ceiling of $1 on this market.What will be the size of the shortage in this market?

Accepted Answer

A)   0 units
B)   2 units
C)   8 units
D)   10 unitsE) A) and B)
F) A) and C)

Question 17

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Accepted Answer

A) True 
 B)False

Question 18

A nonbinding price floor (i) causes a surplus.
(ii) causes a shortage.
(iii) is set at a price above the equilibrium price.
(iv) 
Is set at a price below the equilibrium price.

Accepted Answer

A)   (iii) only
B)   (iv) only
C)   (i) and (iii) only
D)   (ii) and (iv) onlyE) All of the above
F) A) and D)

Question 19

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

Accepted Answer

A)   not shift.
B)   shift up.
C)   shift down.
D)   become flatter.E) None of the above
F) B) and D)

Question 20

If the minimum wage exceeds the equilibrium wage,then

Accepted Answer

A)   the quantity demanded of labor will exceed the quantity supplied.
B)   the quantity supplied of labor will exceed the quantity demanded.
C)   the minimum wage will not be binding.
D)   there will be no unemployment.E) All of the above
F) A) and C)

Exam 6: Supply,demand,and Government Policies

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

Correct Answer
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Correct Answer
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When a free market for a good reaches equilibrium,anyone who is willing and able to sell at the market price can sell the good.

Correct Answer
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A large majority of economists favor eliminating the minimum wage.

Correct Answer
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If a tax is levied on the sellers of a product,then there will be a(n)

Correct Answer
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If the minimum wage exceeds the equilibrium wage,then

Correct Answer
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The wedge between the buyers' price and the sellers' price is the same,regardless of whether the tax is levied on buyers or sellers.

Correct Answer
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Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14.The per-unit burden of the tax on sellers is

Correct Answer
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Figure 6-7 -Refer to Figure 6-7.Which of the following price controls would cause a shortage of 20 units of the good?

Correct Answer
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Figure 6-16 -Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.Which of the following is correct?

Correct Answer
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A nonbinding price floor (i) causes a surplus. (ii) causes a shortage. (iii) is set at a price above the equilibrium price. (iv) Is set at a price below the equilibrium price.

Correct Answer
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A binding price ceiling causes a shortage in the market.

Correct Answer
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Other than OPEC,the shortage of gasoline in the U.S.in the 1970s could also be blamed on

Correct Answer
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The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Correct Answer
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Table 6-1 -Refer to Table 6-1.Suppose the government imposes a price ceiling of $1 on this market.What will be the size of the shortage in this market?

Correct Answer
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In the 1970s,long lines at gas stations in the United States were primarily a result of the fact that

Correct Answer
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A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

Correct Answer
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Figure 6-20 -Refer to Figure 6-20.What is the amount of the tax per unit?

Correct Answer
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If a tax is levied on the buyers of a product,then the supply curve will

Correct Answer
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Figure 6-26 -Refer to Figure 6-26.A price ceiling set at $30 would create a shortage of 20 units.

Correct Answer
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Exam 6: Supply,demand,and Government Policies

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a free market for a good reaches equilibrium,anyone who is willing and able to sell at the market price can sell the good.

Correct AnswerverifiedShow Answer

A large majority of economists favor eliminating the minimum wage.

Correct AnswerverifiedShow Answer

If a tax is levied on the sellers of a product,then there will be a(n)

Correct AnswerverifiedShow Answer

If the minimum wage exceeds the equilibrium wage,then

Correct AnswerverifiedShow Answer

The wedge between the buyers' price and the sellers' price is the same,regardless of whether the tax is levied on buyers or sellers.

Correct AnswerverifiedShow Answer

Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14.The per-unit burden of the tax on sellers is

Correct AnswerverifiedShow Answer

Figure 6-7 -Refer to Figure 6-7.Which of the following price controls would cause a shortage of 20 units of the good?

Correct AnswerverifiedShow Answer

Figure 6-16 -Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.Which of the following is correct?

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A nonbinding price floor (i) causes a surplus. (ii) causes a shortage. (iii) is set at a price above the equilibrium price. (iv) Is set at a price below the equilibrium price.

Correct AnswerverifiedShow Answer

A binding price ceiling causes a shortage in the market.

Correct AnswerverifiedShow Answer

Other than OPEC,the shortage of gasoline in the U.S.in the 1970s could also be blamed on

Correct AnswerverifiedShow Answer

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Correct AnswerverifiedShow Answer

Table 6-1 -Refer to Table 6-1.Suppose the government imposes a price ceiling of $1 on this market.What will be the size of the shortage in this market?

Correct AnswerverifiedShow Answer

In the 1970s,long lines at gas stations in the United States were primarily a result of the fact that

Correct AnswerverifiedShow Answer

A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

Correct AnswerverifiedShow Answer

Figure 6-20 -Refer to Figure 6-20.What is the amount of the tax per unit?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-26 -Refer to Figure 6-26.A price ceiling set at $30 would create a shortage of 20 units.

Correct AnswerverifiedShow Answer

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