Question 1

Figure 6-3
Panel (a)  Panel (b)   
-Refer to Figure 6-3. In panel (a) , there will be

Accepted Answer

A)   a shortage.
B)   equilibrium in the market.
C)   a surplus.
D)   lines of people waiting to buy the good.E) A) and B)
F) A) and C)

Question 2

Scenario 6-1
Suppose that demand in the market for good X is given by the equation  and that supply in the market for good X is given by the equation 
-Refer to Scenario 6-1. If the government set a price ceiling at $12, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set at $12 wou...

Question 3

Figure 6-13
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-13. Which of the following price floors would be binding in this market?

Accepted Answer

A)   $3
B)   $4
C)   $5
D)   $6E) All of the above
F) A) and B)

Question 4

Figure 6-16 
-Refer to Figure 6-16. In this market, a minimum wage of $2.75 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 C)
F) A) and C)

Question 5

When a tax is placed on the buyers of lemonade, the

Accepted Answer

A)   sellers bear the entire burden of the tax.
B)   buyers bear the entire burden of the tax.
C)   burden of the tax will be always be equally divided between the buyers and the sellers.
D)   burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal.E) A) and B)
F) A) and C)

Question 6

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 7

Figure 6-28 
-Refer to Figure 6-28. Suppose a tax of $4 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)   $4
B)   between $4 and $7
C)   between $7 and $10
D)   $10E) A) and C)
F) All of the above

Question 8

Table 6-1 
-Refer to Table 6-1. Suppose the government imposes a price ceiling of $70 on this market. What will be the size of the shortage in this market?

Accepted Answer

A)   0 units
B)   400 units
C)   600 units
D)   1000 unitsE) C) and D)
F) B) and C)

Question 9

If a tax is imposed on the sellers of a product, then the tax burden will fall entirely on the sellers.

Accepted Answer

A) True 
 B)False

Question 10

Long lines

Accepted Answer

A)   and discrimination according to seller bias are both inefficient rationing mechanisms because they both waste buyers' time.
B)   and discrimination according to seller bias are both inefficient rationing mechanisms because the good does not necessarily go to the buyer who values it most highly.
C)   are an inefficient rationing mechanism because they waste buyers' time, and discrimination according to seller bias is an inefficient rationing mechanism because the good does not necessarily go to the buyer who values it most highly.
D)   are an inefficient rationing mechanism because the good does not necessarily go to the buyer who values it most highly, and discrimination according to seller bias is an inefficient rationing mechanism because it wastes buyers' time.E) C) and D)
F) A) and B)

Question 11

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 ceiling at $17 for this product. Is this price ceiling binding, and what will be the size of the shortage/surplus in this market?

Accepted Answer

The price ceiling will not be ...

Question 12

Figure 6-22 
-Refer to Figure 6-22. The amount of the tax per unit is

Accepted Answer

A)   $2.00.
B)   $1.50.
C)   $3.00.
D)   $0.50.E) A) and B)
F) C) and D)

Question 13

The rationing mechanisms that develop under binding price ceilings are usually inefficient.

Accepted Answer

A) True 
 B)False

Question 14

A $0.10 tax levied on the sellers of chocolate bars will cause the

Accepted Answer

A)   supply curve for chocolate bars to shift down by $0.10.
B)   supply curve for chocolate bars to shift up by $0.10.
C)   demand curve for chocolate bars to shift down by $0.10.
D)   demand curve for chocolate bars to shift up by $0.10.E) All of the above
F) A) and B)

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

If the government levies a $1,000 tax per boat on sellers of boats, then the price paid by buyers of boats would

Accepted Answer

A)   increase by more than $1,000.
B)   increase by exactly $1,000.
C)   increase by less than $1,000.
D)   decrease by an indeterminate amount.E) C) and D)
F) None of the above

Question 17

In "Venezuela Versus the Market," the price control placed on coffee

Accepted Answer

A)   created a shortage of coffee.
B)   resulted in higher profits for coffee growers.
C)   increased coffee exports to other countries.
D)   increased the amount of land and coffee used in production.E) None of the above
F) A) and B)

Question 18

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

Question 19

Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms. Labor economists believe that

Accepted Answer

A)   lawmakers may have actually achieved their goal because statistics show that the tax burden is currently equally divided.
B)   the tax raises too little revenue for the government, so it should be eliminated.
C)   firms bear most of the burden of the tax.
D)   workers bear most of the burden of the tax.E) A) and B)
F) B) and D)

Question 20

Which of the following causes a surplus of a good?

Accepted Answer

A)   a binding price floor
B)   a binding price ceiling
C)   a tax on the good
D)   More than one of the above is correct.E) All of the above
F) B) and C)

Exam 6: Supply, Demand, and Government Policies

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

Correct Answer
verified

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price ceiling of $70 on this market. What will be the size of the shortage in this market?

Correct Answer
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The rationing mechanisms that develop under binding price ceilings are usually inefficient.

Correct Answer
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Correct Answer
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The price ceiling will not be ...
View Answer

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. Which of the following price floors would be binding in this market?

Correct Answer
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Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms. Labor economists believe that

Correct Answer
verified

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. In panel (a) , there will be

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

Correct Answer
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If the government levies a $1,000 tax per boat on sellers of boats, then the price paid by buyers of boats would

Correct Answer
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A $0.10 tax levied on the sellers of chocolate bars will cause the

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

Correct Answer
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If a tax is imposed on the sellers of a product, then the tax burden will fall entirely on the sellers.

Correct Answer
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When a tax is placed on the buyers of lemonade, the

Correct Answer
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Correct Answer
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A price ceiling set at $12 wou...
View Answer

Figure 6-28 -Refer to Figure 6-28. Suppose a tax of $4 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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Which of the following causes a surplus of a good?

Correct Answer
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Figure 6-22 -Refer to Figure 6-22. The amount of the tax per unit is

Correct Answer
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In "Venezuela Versus the Market," the price control placed on coffee

Correct Answer
verified

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $2.75 is

Correct Answer
verified

Long lines

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

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

Correct AnswerverifiedShow Answer

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price ceiling of $70 on this market. What will be the size of the shortage in this market?

Correct AnswerverifiedShow Answer

The rationing mechanisms that develop under binding price ceilings are usually inefficient.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe price ceiling will not be ...View AnswerShow Answer

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. Which of the following price floors would be binding in this market?

Correct AnswerverifiedShow Answer

Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms. Labor economists believe that

Correct AnswerverifiedShow Answer

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. In panel (a) , there will be

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the government levies a $1,000 tax per boat on sellers of boats, then the price paid by buyers of boats would

Correct AnswerverifiedShow Answer

A $0.10 tax levied on the sellers of chocolate bars will cause the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a tax is imposed on the sellers of a product, then the tax burden will fall entirely on the sellers.

Correct AnswerverifiedShow Answer

When a tax is placed on the buyers of lemonade, the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA price ceiling set at $12 wou...View AnswerShow Answer

Figure 6-28 -Refer to Figure 6-28. Suppose a tax of $4 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct AnswerverifiedShow Answer

Which of the following causes a surplus of a good?

Correct AnswerverifiedShow Answer

Figure 6-22 -Refer to Figure 6-22. The amount of the tax per unit is

Correct AnswerverifiedShow Answer

In "Venezuela Versus the Market," the price control placed on coffee

Correct AnswerverifiedShow Answer

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $2.75 is

Correct AnswerverifiedShow Answer

Long lines

Correct AnswerverifiedShow Answer

Correct Answer
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The price ceiling will not be ...
View Answer

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A price ceiling set at $12 wou...
View Answer

Correct Answer
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