Question 1

When a price ceiling is binding, is the price ceiling set above or below the market equilibrium price?

Accepted Answer

A binding price ceil...

Question 2

A tax on sellers 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 3

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

Accepted Answer

A)   a smaller quantity of the good is bought and sold.
B)   a larger quantity of the good is demanded.
C)   a smaller quantity of the good is supplied.
D)   the price falls below the equilibrium price.E) A) and B)
F) None of the above

Question 4

Figure 6-33 
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the sellers in this market?

Accepted Answer

The burden...

Question 5

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

Question 6

Figure 6-15 
-Refer to Figure 6-15. Suppose a price floor of $4 is imposed on this market. As a result,

Accepted Answer

A)   buyers' total expenditure on the good decreases by $15.
B)   the supply curve shifts to the left so as to now pass through the point (quantity = 30, price = $4) .
C)   the quantity demanded of the good decreases by 30 units.
D)   the number of units sold in the market will increase by 15 units.E) A) and D)
F) C) and D)

Question 7

Figure 6-4 
-Refer to Figure 6-4. A government-imposed price ceiling of $6 in this market results in

Accepted Answer

A)   a shortage of 8 units.
B)   a shortage of 4 units.
C)   14 units sold.
D)   10 units sold.E) A) and B)
F) A) and C)

Question 8

Figure 6-25 
-Refer to Figure 6-25. The equilibrium price in the market before the tax is imposed is

Accepted Answer

A)   $1.
B)   $2.
C)   $5.
D)   $6.E) C) and D)
F) B) and D)

Question 9

Figure 6-3
Panel (a)  Panel (b)   
-Refer to Figure 6-3. A nonbinding price floor is shown in

Accepted Answer

A)   both panel (a)  and panel (b) .
B)   panel (a)  only.
C)   panel (b)  only.
D)   neither panel (a)  nor panel (b) .E) B) and D)
F) A) and D)

Question 10

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 ceilings would be binding in this market?

Accepted Answer

A)   $4
B)   $5
C)   $6
D)   $7E) A) and B)
F) A) and D)

Question 11

In a particular market, market demand is given by the equation  and market supply is given by the equation  Suppose a per-unit tax is imposed that reduces the number of units bought and sold in the market to 25 units. What is the size of the tax, and who bears the greater burden of the tax, buyers or sellers?

Accepted Answer

If the number of transactions falls to 2...

Question 12

Figure 6-25 
-Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Accepted Answer

A)   $5.
B)   $6.
C)   $7.
D)   $8.E) A) and B)
F) B) and C)

Question 13

Table 6-6 
-Refer to Table 6-6. In this market, over what range of prices would a price ceiling set by the government be binding?

Accepted Answer

A price ceiling must be set be...

Question 14

Table 6-5 
-Refer to Table 6-5. Which of the following price ceilings would be binding in this market?

Accepted Answer

A)   $3
B)   $6
C)   $9
D)   None of the above price ceilings would be binding.E) A) and B)
F) B) and D)

Question 15

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Accepted Answer

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

Question 16

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 $6
B)   a price ceiling set at $5
C)   a price floor set at $9
D)   a price floor set at $8E) B) and C)
F) C) and D)

Question 17

Figure 6-2 
-Refer to Figure 6-2. The price ceiling

Accepted Answer

A)   causes a shortage of 45 units of the good.
B)   makes it necessary for sellers to ration the good.
C)   is not binding because it is set below the equilibrium price.
D)   causes a shortage of 40 units of the good.E) A) and B)
F) None of the above

Question 18

Figure 6-7 
-Refer to Figure 6-7. For a price floor to be binding in this market, it would have to be set at

Accepted Answer

A)   any price below $7.
B)   any price below $3.
C)   any price below $9.
D)   any price above $7.E) C) and D)
F) All of the above

Question 19

A binding minimum wage creates unemployment.

Accepted Answer

A) True 
 B)False

Question 20

Figure 6-2 
-Refer to Figure 6-2. The price ceiling

Accepted Answer

A)   is binding.
B)   causes a shortage.
C)   causes the quantity demanded to exceed the quantity supplied.
D)   All of the above are correct.E) None of the above
F) All of the above

Exam 6: Supply, Demand, and Government Policies

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. A nonbinding price floor is shown in

Correct Answer
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A tax on sellers 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
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When a price ceiling is binding, is the price ceiling set above or below the market equilibrium price?

Correct Answer
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A binding price ceil...
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Figure 6-15 -Refer to Figure 6-15. Suppose a price floor of $4 is imposed on this market. As a result,

Correct Answer
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Table 6-5 -Refer to Table 6-5. Which of the following price ceilings would be binding in this market?

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 6-2 -Refer to Figure 6-2. The price ceiling

Correct Answer
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Figure 6-25 -Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Correct Answer
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Table 6-6 -Refer to Table 6-6. In this market, over what range of prices would a price ceiling set by the government be binding?

Correct Answer
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A price ceiling must be set be...
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Which of the following observations would be consistent with the imposition of a binding price floor on a market? After the price floor becomes effective,

Correct Answer
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Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the sellers in this market?

Correct Answer
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The burden...
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If the minimum wage exceeds the equilibrium wage, then

Correct Answer
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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 ceilings would be binding in this market?

Correct Answer
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Figure 6-2 -Refer to Figure 6-2. The price ceiling

Correct Answer
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Figure 6-25 -Refer to Figure 6-25. The equilibrium price in the market before the tax is imposed is

Correct Answer
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Correct Answer
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If the number of transactions falls to 2...
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Which of the following causes the price paid by buyers to be different than the price received by sellers?

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Figure 6-7 -Refer to Figure 6-7. For a price floor to be binding in this market, it would have to be set at

Correct Answer
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A binding minimum wage creates unemployment.

Correct Answer
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Figure 6-4 -Refer to Figure 6-4. A government-imposed price ceiling of $6 in this market results in

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

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. A nonbinding price floor is shown in

Correct AnswerverifiedShow Answer

A tax on sellers 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

When a price ceiling is binding, is the price ceiling set above or below the market equilibrium price?

Correct AnswerverifiedA binding price ceil...View AnswerShow Answer

Figure 6-15 -Refer to Figure 6-15. Suppose a price floor of $4 is imposed on this market. As a result,

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Table 6-5 -Refer to Table 6-5. Which of the following price ceilings would be binding in this market?

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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?

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Figure 6-2 -Refer to Figure 6-2. The price ceiling

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Figure 6-25 -Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

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Table 6-6 -Refer to Table 6-6. In this market, over what range of prices would a price ceiling set by the government be binding?

Correct AnswerverifiedA price ceiling must be set be...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the sellers in this market?

Correct AnswerverifiedThe burden...View AnswerShow Answer

If the minimum wage exceeds the equilibrium wage, then

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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 ceilings would be binding in this market?

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Figure 6-2 -Refer to Figure 6-2. The price ceiling

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Figure 6-25 -Refer to Figure 6-25. The equilibrium price in the market before the tax is imposed is

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Correct AnswerverifiedIf the number of transactions falls to 2...View AnswerShow Answer

Which of the following causes the price paid by buyers to be different than the price received by sellers?

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Figure 6-7 -Refer to Figure 6-7. For a price floor to be binding in this market, it would have to be set at

Correct AnswerverifiedShow Answer

A binding minimum wage creates unemployment.

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Figure 6-4 -Refer to Figure 6-4. A government-imposed price ceiling of $6 in this market results in

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A binding price ceil...
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A price ceiling must be set be...
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The burden...
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If the number of transactions falls to 2...
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