Question 1

The imposition of a binding price ceiling on a market causes

Accepted Answer

A)   quantity demanded to be greater than quantity supplied.
B)   quantity demanded to be less than quantity supplied.
C)   quantity demanded to be equal to quantity supplied.
D)   the price of the good to be greater than its equilibrium price.E) All of the above
F) A) and B)

Question 2

Figure 6-27
This figure shows the market demand and market supply curves for good Z. 
-Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)   $16
B)   between $16 and $20
C)   between $20 and $22
D)   $22E) A) and C)
F) A) and B)

Question 3

When a tax is imposed on the buyers of a good, the demand curve shifts

Accepted Answer

A)   upward by the amount of the tax.
B)   downward by the amount of the tax.
C)   upward by less than the amount of the tax.
D)   downward by less than the amount of the tax.E) C) and D)
F) All of the above

Question 4

Table 6-2
 
-Refer to Table 6-2. A price floor set at $20 will

Accepted Answer

A)   be binding and will result in a surplus of 75 units.
B)   be binding and will result in a surplus of 125 units.
C)   be binding and will result in a surplus of 200 units.
D)   not be binding.E) A) and D)
F) A) and C)

Question 5

The price received by sellers in a market will decrease if the government

Accepted Answer

A)   increases a binding price floor in that market.
B)   increases a binding price ceiling in that market.
C)   decreases a tax on the good sold in that market.
D)   None of the above is correct.E) A) and B)
F) All of the above

Question 6

Table 6-1
 
-Refer to Table 6-1. Suppose the government imposes a price ceiling of $40 on this market. What will be the size of the shortage in this market?

Accepted Answer

A)   0 units
B)   400 units
C)   1200 units
D)   1600 unitsE) C) and D)
F) B) and C)

Question 7

When the government imposes a binding price ceiling on a competitive market, a surplus of the good arises, and sellers must ration the scarce goods among the large number of potential buyers.

Accepted Answer

A) True 
 B)False

Question 8

Figure 6-29
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-29. Suppose D1 represents the demand curve for gasoline in both the short run and long run, S1 represents the supply curve for gasoline in the short run, and S2 represents the supply curve for gasoline in the long run. After the imposition of the $2,

Accepted Answer

A)   buyers bear a higher burden of the tax in the short run than in the long run.
B)   sellers bear a higher burden of the tax in the short run than in the long run.
C)   buyers and sellers bear an equal burden of the tax in both the short run and long run.
D)   buyers and sellers bear an equal burden of the tax in the short run, but buyers bear a higher burden of the tax in the long run.E) B) and D)
F) B) and C)

Question 9

Figure 6-9 
-Refer to Figure 6-9. A price ceiling set at

Accepted Answer

A)   $4 will be binding and will result in a shortage of 8 units.
B)   $4 will be binding and will result in a shortage of 16 units.
C)   $7 will be binding and will result in a surplus of 4 units.
D)   $7 will be binding and will result in a surplus of 8 units.E) All of the above
F) C) and D)

Question 10

The minimum wage does not apply to

Accepted Answer

A)   jobs for teenagers.
B)   jobs for members of minority groups.
C)   unpaid internships.
D)   jobs that include on-the-job training.E) A) and B)
F) A) and C)

Question 11

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

Accepted Answer

A) True 
 B)False

Question 12

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Accepted Answer

A) True 
 B)False

Question 13

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour, then a shortage of labor will exist.

Accepted Answer

A) True 
 B)False

Question 14

A tax burden falls more heavily on the side of the market that is less elastic.

Accepted Answer

A) True 
 B)False

Question 15

Figure 6-16 
-Refer to Figure 6-16. In this market, a minimum wage of $7.25 is

Accepted Answer

A)   binding and creates a labor shortage.
B)   binding and creates unemployment.
C)   nonbinding and creates a labor shortage.
D)   nonbinding and creates neither a labor shortage nor unemployment.E) B) and D)
F) C) and D)

Question 16

Lawmakers can decide whether the buyers or the sellers must send a tax to the government, but they cannot legislate the true burden of a tax.

Accepted Answer

A) True 
 B)False

Question 17

Sellers of a good bear the larger share of the tax burden when a tax is placed on a product for which the 
i)  supply is more elastic than the demand.
Ii)  demand in more elastic than the supply.
Iii)  tax is placed on the sellers of the product.
Iv)  tax is placed on the buyers of the product.

Accepted Answer

A)   i)  only
B)   ii)  only
C)   i)  and iv)  only
D)   ii)  and iii)  onlyE) C) and D)
F) A) and B)

Question 18

Opponents of the minimum wage point out that the minimum wage

Accepted Answer

A)   encourages teenagers to drop out of school.
B)   prevents some workers from getting needed on-the-job training.
C)   contributes to the problem of unemployment.
D)   All of the above are correct.E) A) and D)
F) B) and C)

Question 19

Figure 6-24 
-Refer to Figure 6-24. Suppose sellers, rather than buyers, were required to pay this tax in the same amount per unit as shown in the graph) . Relative to the tax on buyers, the tax on sellers would result in

Accepted Answer

A)   buyers bearing the same share of the tax burden.
B)   sellers bearing the same share of the tax burden.
C)   the same amount of tax revenue for the government.
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 20

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

Accepted Answer

A)   a smaller quantity of the good is bought and sold.
B)   a smaller quantity of the good is demanded.
C)   a larger quantity of the good is supplied.
D)   the price rises above the previous equilibrium.E) B) and C)
F) C) and D)

Exam 6: Supply, Demand, and Government Policies

A tax burden falls more heavily on the side of the market that is less elastic.

Correct Answer
verified

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Correct Answer
verified

The minimum wage does not apply to

Correct Answer
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If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour, then a shortage of labor will exist.

Correct Answer
verified

Lawmakers can decide whether the buyers or the sellers must send a tax to the government, but they cannot legislate the true burden of a tax.

Correct Answer
verified

Opponents of the minimum wage point out that the minimum wage

Correct Answer
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Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct Answer
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Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $7.25 is

Correct Answer
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Correct Answer
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Figure 6-24 -Refer to Figure 6-24. Suppose sellers, rather than buyers, were required to pay this tax in the same amount per unit as shown in the graph) . Relative to the tax on buyers, the tax on sellers would result in

Correct Answer
verified

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

Correct Answer
verified

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

Correct Answer
verified

Sellers of a good bear the larger share of the tax burden when a tax is placed on a product for which the i) supply is more elastic than the demand. Ii) demand in more elastic than the supply. Iii) tax is placed on the sellers of the product. Iv) tax is placed on the buyers of the product.

Correct Answer
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The imposition of a binding price ceiling on a market causes

Correct Answer
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When a tax is imposed on the buyers of a good, the demand curve shifts

Correct Answer
verified

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price ceiling of $40 on this market. What will be the size of the shortage in this market?

Correct Answer
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When the government imposes a binding price ceiling on a competitive market, a surplus of the good arises, and sellers must ration the scarce goods among the large number of potential buyers.

Correct Answer
verified

Table 6-2 -Refer to Table 6-2. A price floor set at $20 will

Correct Answer
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Figure 6-9 -Refer to Figure 6-9. A price ceiling set at

Correct Answer
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The price received by sellers in a market will decrease if the government

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

A tax burden falls more heavily on the side of the market that is less elastic.

Correct AnswerverifiedShow Answer

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Correct AnswerverifiedShow Answer

The minimum wage does not apply to

Correct AnswerverifiedShow Answer

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour, then a shortage of labor will exist.

Correct AnswerverifiedShow Answer

Lawmakers can decide whether the buyers or the sellers must send a tax to the government, but they cannot legislate the true burden of a tax.

Correct AnswerverifiedShow Answer

Opponents of the minimum wage point out that the minimum wage

Correct AnswerverifiedShow Answer

Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct AnswerverifiedShow Answer

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $7.25 is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 6-24 -Refer to Figure 6-24. Suppose sellers, rather than buyers, were required to pay this tax in the same amount per unit as shown in the graph) . Relative to the tax on buyers, the tax on sellers would result in

Correct AnswerverifiedShow Answer

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

Correct AnswerverifiedShow Answer

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

Correct AnswerverifiedShow Answer

Sellers of a good bear the larger share of the tax burden when a tax is placed on a product for which the i) supply is more elastic than the demand. Ii) demand in more elastic than the supply. Iii) tax is placed on the sellers of the product. Iv) tax is placed on the buyers of the product.

Correct AnswerverifiedShow Answer

The imposition of a binding price ceiling on a market causes

Correct AnswerverifiedShow Answer

When a tax is imposed on the buyers of a good, the demand curve shifts

Correct AnswerverifiedShow Answer

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price ceiling of $40 on this market. What will be the size of the shortage in this market?

Correct AnswerverifiedShow Answer

When the government imposes a binding price ceiling on a competitive market, a surplus of the good arises, and sellers must ration the scarce goods among the large number of potential buyers.

Correct AnswerverifiedShow Answer

Table 6-2 -Refer to Table 6-2. A price floor set at $20 will

Correct AnswerverifiedShow Answer

Figure 6-9 -Refer to Figure 6-9. A price ceiling set at

Correct AnswerverifiedShow Answer

The price received by sellers in a market will decrease if the government

Correct AnswerverifiedShow Answer

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