Question 1

Scenario 6-2
Suppose demand for a product is given by the equation  and supply for the product is given by the equation 
-Refer to Scenario 6-2. Suppose the government sets a price floor at $13 for this product. Is this price floor binding, and what will be the size of the shortage/surplus in this market?

Accepted Answer

The price floor will not be bi...

Question 2

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 3

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 tax a good.
D)   All of the above are correct.E) C) and D)
F) A) and D)

Question 4

Figure 6-22 
-Refer to Figure 6-22. The equilibrium price in the market before the tax is imposed is

Accepted Answer

A)   $3.50.
B)   $5.00.
C)   $2.00.
D)   $1.50.E) None of the above
F) A) and D)

Question 5

A $5 tax levied on the buyers of pants will cause the

Accepted Answer

A)   supply curve for pants to shift down by $5.
B)   supply curve for pants to shift up by $5.
C)   demand curve for pants to shift down by $5.
D)   demand curve for pants to shift up by $5.E) B) and C)
F) B) and D)

Question 6

Table 6-6
 
-Refer to Table 6-6. If the government set a price floor at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 7

When a binding price ceiling is imposed on a market to benefit buyers,

Accepted Answer

A)   every buyer in the market benefits.
B)   every buyer and seller in the market benefits.
C)   every buyer who wants to buy the good will be able to do so, but only if he waits in long lines.
D)   some buyers will not be able to buy any amount of the good.E) A) and D)
F) None of the above

Question 8

Suppose the equilibrium price of a physical examination "physical")  by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, the

Accepted Answer

A)   demand curve for physicals shifts to the right.
B)   supply curve for physicals shifts to the left.
C)   quantity demanded of physicals increases, and the quantity supplied of physicals decreases.
D)   number of physicals performed stays the same.E) C) and D)
F) A) and B)

Question 9

A binding price ceiling causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 10

Even though federal law mandates that workers and firms each pay half of the total FICA tax, the tax burden may not fall equally on workers and firms.

Accepted Answer

A) True 
 B)False

Question 11

When OPEC raised the price of crude oil in the 1970s, it caused the

Accepted Answer

A)   demand for gasoline to increase.
B)   demand for gasoline to decrease.
C)   supply of gasoline to increase.
D)   supply of gasoline to decrease.E) A) and B)
F) C) and D)

Question 12

Table 6-2
 
-Refer to Table 6-2. A price ceiling set at $5 results in

Accepted Answer

A)   50 units sold.
B)   250 units sold.
C)   300 units sold.
D)   350 units sold.E) All of the above
F) A) and B)

Question 13

Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A)   $70
B)   $60
C)   $5
D)   $40E) B) and C)
F) C) and D)

Question 15

If the government wants to reduce smoking, it should impose a tax on

Accepted Answer

A)   buyers of cigarettes.
B)   sellers of cigarettes.
C)   either buyers or sellers of cigarettes.
D)   whichever side of the market is less elastic.E) A) and B)
F) C) and D)

Question 16

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Accepted Answer

A) True 
 B)False

Question 17

A tax imposed on the buyers of a good will lower the

Accepted Answer

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

Question 18

The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run.

Accepted Answer

A) True 
 B)False

Question 19

Price ceilings and price floors that are binding

Accepted Answer

A)   are desirable because they make markets more efficient and more fair.
B)   cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price.
C)   can have the effect of restoring a market to equilibrium.
D)   are imposed because they can make the poor in the economy better off without causing adverse effects.E) A) and B)
F) None of the above

Question 20

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) C) and D)
F) B) and D)

Exam 6: Supply, Demand, and Government Policies

When OPEC raised the price of crude oil in the 1970s, it caused the

Correct Answer
verified

A tax imposed on the buyers of a good will lower the

Correct Answer
verified

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Correct Answer
verified

Figure 6-22 -Refer to Figure 6-22. The equilibrium price in the market before the tax is imposed is

Correct Answer
verified

Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers.

Correct Answer
verified

If the government wants to reduce smoking, it should impose a tax on

Correct Answer
verified

When a binding price ceiling is imposed on a market to benefit buyers,

Correct Answer
verified

Correct Answer
verified
The price floor will not be bi...
View Answer

A $5 tax levied on the buyers of pants will cause the

Correct Answer
verified

The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Table 6-2 -Refer to Table 6-2. A price ceiling set at $5 results in

Correct Answer
verified

Even though federal law mandates that workers and firms each pay half of the total FICA tax, the tax burden may not fall equally on workers and firms.

Correct Answer
verified

A binding price ceiling causes a shortage in the market.

Correct Answer
verified

Table 6-6 -Refer to Table 6-6. If the government set a price floor at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
A price floor set at...
View Answer

Price ceilings and price floors that are binding

Correct Answer
verified

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

Correct Answer
verified

Suppose the equilibrium price of a physical examination "physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, the

Correct Answer
verified

Price controls are usually enacted

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

When OPEC raised the price of crude oil in the 1970s, it caused the

Correct AnswerverifiedShow Answer

A tax imposed on the buyers of a good will lower the

Correct AnswerverifiedShow Answer

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Correct AnswerverifiedShow Answer

Figure 6-22 -Refer to Figure 6-22. The equilibrium price in the market before the tax is imposed is

Correct AnswerverifiedShow Answer

Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers.

Correct AnswerverifiedShow Answer

If the government wants to reduce smoking, it should impose a tax on

Correct AnswerverifiedShow Answer

When a binding price ceiling is imposed on a market to benefit buyers,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe price floor will not be bi...View AnswerShow Answer

A $5 tax levied on the buyers of pants will cause the

Correct AnswerverifiedShow Answer

The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 6-2 -Refer to Table 6-2. A price ceiling set at $5 results in

Correct AnswerverifiedShow Answer

Even though federal law mandates that workers and firms each pay half of the total FICA tax, the tax burden may not fall equally on workers and firms.

Correct AnswerverifiedShow Answer

A binding price ceiling causes a shortage in the market.

Correct AnswerverifiedShow Answer

Table 6-6 -Refer to Table 6-6. If the government set a price floor at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at...View AnswerShow Answer

Price ceilings and price floors that are binding

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose the equilibrium price of a physical examination "physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, the

Correct AnswerverifiedShow Answer

Price controls are usually enacted

Correct AnswerverifiedShow Answer

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The price floor will not be bi...
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A price floor set at...
View Answer

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