Question 1

Suppose the government imposes a 20-cent tax on the sellers of iced tea.Which of the following is not correct? The tax would

Accepted Answer

A)   shift the supply curve upward by 20 cents.
B)   raise the equilibrium price by 20 cents.
C)   reduce the equilibrium quantity.
D)   discourage market activity.E) A) and B)
F) C) and D)

Question 2

Price controls

Accepted Answer

A)   always produce a fair outcome.
B)   always produce an efficient outcome.
C)   can generate inequities of their own.
D)   All of the above are correct.E) All of the above
F) B) and C)

Question 3

Price floors are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 4

A minimum wage that is set below a market's equilibrium wage will result in an excess

Accepted Answer

A)   demand for labor,that is,unemployment.
B)   demand for labor,that is,a shortage of workers.
C)   supply of labor,that is,unemployment.
D)   None of the above is correct.E) B) and D)
F) A) and D)

Question 5

Price controls are usually enacted

Accepted Answer

A)   as a means of raising revenue for public purposes.
B)   when policymakers believe that the market price of a good or service is unfair to buyers or sellers.
C)   when policymakers detect inefficiencies in a market.
D)   All of the above are correct.E) C) and D)
F) B) and D)

Question 6

Which of the following causes a shortage of a good?

Accepted Answer

A)   a binding price floor
B)   a binding price ceiling
C)   a tax on the good
D)   None of the above is correct.E) B) and C)
F) B) and D)

Question 7

Price controls often hurt those they are trying to help.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A)   $8
B)   $10
C)   $12
D)   $14E) A) and B)
F) C) and D)

Question 9

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 10

To say that a price floor is binding is to say that the price floor

Accepted Answer

A)   results in a shortage.
B)   is set below the equilibrium price.
C)   causes quantity supplied to exceed quantity demanded.
D)   All of the above are correct.E) A) and B)
F) C) and D)

Question 11

The imposition of a binding price floor on a market causes quantity demanded to be

Accepted Answer

A)   greater than quantity supplied.
B)   less than quantity supplied.
C)   equal to quantity supplied.
D)   Both a) and b) are possible.E) B) and D)
F) All of the above

Question 12

Whether a tax is levied on sellers or buyers,buyers and sellers usually share the burden of taxes.

Accepted Answer

A) True 
 B)False

Question 13

To say that a price ceiling is nonbinding is to say that the price ceiling

Accepted Answer

A)   results in a surplus.
B)   is set above the equilibrium price.
C)   causes quantity demanded to exceed quantity supplied.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 14

Most labor economists believe that the supply of labor is much more elastic than the demand.

Accepted Answer

A) True 
 B)False

Question 15

Table 6-2
 
-Refer to Table 6-2.A price ceiling set at $15 will

Accepted Answer

A)   be binding and will result in a shortage of 50 units.
B)   be binding and will result in a shortage of 100 units.
C)   be binding and will result in a shortage of 125 units.
D)   not be binding.E) A) and B)
F) A) and C)

Question 16

Suppose there is currently a tax of $50 per ticket on airline tickets.Sellers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $30 per ticket,then the

Accepted Answer

A)   demand curve will shift upward by $20,and the price paid by buyers will decrease by less than $20.
B)   demand curve will shift upward by $20,and the price paid by buyers will decrease by $20.
C)   supply curve will shift downward by $20,and the effective price received by sellers will increase by less than $20.
D)   supply curve will shift downward by $20,and the effective price received by sellers will increase by $20.E) A) and C)
F) None of the above

Question 17

Figure 6-23 
-Refer to Figure 6-23.How much tax revenue does this tax produce for the government?

Accepted Answer

A)   $480
B)   $600
C)   $800
D)   $1120E) C) and D)
F) None of the above

Question 18

Figure 6-18 
-Refer to Figure 6-18.Buyers pay how much of the tax per unit?

Accepted Answer

A)   $1.
B)   $1.50.
C)   $2.50.
D)   $3.50.E) A) and B)
F) A) and D)

Question 19

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Accepted Answer

A)   price will no longer be the mechanism that rations scarce resources.
B)   long lines of buyers may develop.
C)   sellers could ration the good or service according to their own personal biases.
D)   All of the above are correct.E) A) and C)
F) C) and D)

Question 20

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) None of the above
F) B) and C)

Exam 6: Supply,demand,and Government Policies

To say that a price ceiling is nonbinding is to say that the price ceiling

Correct AnswerverifiedShow Answer

A minimum wage that is set below a market's equilibrium wage will result in an excess

Correct AnswerverifiedShow Answer

Table 6-2 -Refer to Table 6-2.A price ceiling set at $15 will

Correct AnswerverifiedShow Answer

To say that a price floor is binding is to say that the price floor

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following causes a shortage of a good?

Correct AnswerverifiedShow Answer

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Correct AnswerverifiedShow Answer

Suppose there is currently a tax of $50 per ticket on airline tickets.Sellers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $30 per ticket,then the

Correct AnswerverifiedShow Answer

Whether a tax is levied on sellers or buyers,buyers and sellers usually share the burden of taxes.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The imposition of a binding price floor on a market causes quantity demanded to be

Correct AnswerverifiedShow Answer

Price floors are typically imposed to benefit sellers.

Correct AnswerverifiedShow Answer

Price controls often hurt those they are trying to help.

Correct AnswerverifiedShow Answer

Figure 6-18 -Refer to Figure 6-18.Buyers pay how much of the tax per unit?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-23 -Refer to Figure 6-23.How much tax revenue does this tax produce for the government?

Correct AnswerverifiedShow Answer

Suppose the government imposes a 20-cent tax on the sellers of iced tea.Which of the following is not correct? The tax would

Correct AnswerverifiedShow Answer

Most labor economists believe that the supply of labor is much more elastic than the demand.

Correct AnswerverifiedShow Answer

Price controls are usually enacted

Correct AnswerverifiedShow Answer

Price controls

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