Question 1

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

Accepted Answer

A price floor must be set abov...

Question 2

Figure 6-25 
-Refer to Figure 6-25. The effective price that sellers receive after the tax is imposed is

Accepted Answer

A)  $5.
B)  $6.
C)  $7.
D)  $8.E) A) and D)
F) None of the above

Question 3

Figure 6-35 
-Refer to Figure 6-35. A price floor set at $60 would create a surplus of 20 units.

Accepted Answer

A) True 
 B)False

Question 4

The burden of a luxury tax falls

Accepted Answer

A)  more on the rich than on the middle class.
B)  more on the poor than on the rich.
C)  more on the middle class than on the rich.
D)  equally on the rich, the middle class, and the poor.E) B) and D)
F) All of the above

Question 5

When free markets ration goods with prices, it is both efficient and impersonal.

Accepted Answer

A) True 
 B)False

Question 6

Suppose the government has imposed a price ceiling on laptop computers. Which of the following events could transform the price ceiling from one that is not binding into one that is binding?

Accepted Answer

A)  Improvements in production technology reduce the costs of producing laptop computers.
B)  The number of firms selling laptop computers decreases.
C)  Consumers' income decreases, and laptop computers are a normal good.
D)  The number of consumers buying laptop computers decreases.E) A) and D)
F) A) and C)

Question 7

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

Accepted Answer

A)  $4
B)  between $4 and $7
C)  between $7 and $10
D)  $10E) C) and D)
F) None of the above

Question 8

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 B)
F) All of the above

Question 9

A price floor is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 10

When a tax is imposed on a good, the result is always a shortage of the good.

Accepted Answer

A) True 
 B)False

Question 11

Congress intended that

Accepted Answer

A)  the entire FICA tax be paid by workers.
B)  the entire FICA tax be paid by firms.
C)  one-quarter of the FICA tax be paid by workers, and three-quarters be paid by firms.
D)  half the FICA tax be paid by workers, and half be paid by firms.E) None of the above
F) A) and C)

Question 12

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

Accepted Answer

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

Question 13

Price controls often hurt those they are trying to help.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-12 1 before 1973; they paid a price of P2 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price. B) Buyers of gasoline paid a price of P1 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price. C) Buyers of gasoline paid a price of P2 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, with no shortage of gasoline at that price. D) The price ceiling was binding before 1973; the price ceiling was no longer binding after OPEC increased the price of crude oil in 1973." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 6-12. Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

Accepted Answer

A)  Buyers of gasoline paid a price of P1 before 1973; they paid a price of P2 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price.
B)  Buyers of gasoline paid a price of P1 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price.
C)  Buyers of gasoline paid a price of P2 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, with no shortage of gasoline at that price.
D)  The price ceiling was binding before 1973; the price ceiling was no longer binding after OPEC increased the price of crude oil in 1973.E) A) and D)
F) A) and B)

Question 15

If a nonbinding price floor is imposed on a market, then the

Accepted Answer

A)  quantity sold in the market will decrease.
B)  quantity sold in the market will stay the same.
C)  price in the market will increase.
D)  price in the market will decrease.E) A) and B)
F) All of the above

Question 16

Table 6-3
The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market. 
-Refer to Table 6-3. How many units of the good are sold after the imposition of the price floor?

Accepted Answer

A)  5
B)  9
C)  10
D)  15E) C) and D)
F) None of the above

Question 17

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

Question 18

Although lawmakers legislated a fifty-fifty division of the payment of the FICA tax,

Accepted Answer

A)  the actual tax incidence is unaffected by the legislated tax incidence.
B)  the employer now is required by law to pay more than 50 percent of the tax.
C)  the employee now is required by law to pay more than 50 percent of the tax.
D)  employers are no longer required by law to pay any portion of the tax.E) C) and D)
F) A) and D)

Question 19

Figure 6-33 
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What is the effective price that sellers will receive for the good after the tax is imposed?

Accepted Answer

The effective price ...

Question 20

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply.
​

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

Long lines

Correct Answer
verified

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply.

Correct Answer
verified

The burden of a luxury tax falls

Correct Answer
verified

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

Correct Answer
verified

Figure 6-25 -Refer to Figure 6-25. The effective price that sellers receive after the tax is imposed is

Correct Answer
verified

Price controls often hurt those they are trying to help.

Correct Answer
verified

Suppose the government has imposed a price ceiling on laptop computers. Which of the following events could transform the price ceiling from one that is not binding into one that is binding?

Correct Answer
verified

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

Correct Answer
verified

Although lawmakers legislated a fifty-fifty division of the payment of the FICA tax,

Correct Answer
verified

Figure 6-12 -Refer to Figure 6-12. Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

A price floor is a legal minimum on the price at which a good or service can be sold.

Correct Answer
verified

When free markets ration goods with prices, it is both efficient and impersonal.

Correct Answer
verified

If a nonbinding price floor is imposed on a market, then the

Correct Answer
verified

Figure 6-35 -Refer to Figure 6-35. A price floor set at $60 would create a surplus of 20 units.

Correct Answer
verified

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

Correct Answer
verified
A price floor must be set abov...
View Answer

When a tax is imposed on a good, the result is always a shortage of the good.

Correct Answer
verified

Congress intended that

Correct Answer
verified

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What is the effective price that sellers will receive for the good after the tax is imposed?

Correct Answer
verified
The effective price ...
View Answer

Exam 6: Supply, Demand, and Government Policies

Long lines

Correct AnswerverifiedShow Answer

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply. ​

Correct AnswerverifiedShow Answer

The burden of a luxury tax falls

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-25 -Refer to Figure 6-25. The effective price that sellers receive after the tax is imposed is

Correct AnswerverifiedShow Answer

Price controls often hurt those they are trying to help.

Correct AnswerverifiedShow Answer

Suppose the government has imposed a price ceiling on laptop computers. Which of the following events could transform the price ceiling from one that is not binding into one that is binding?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Although lawmakers legislated a fifty-fifty division of the payment of the FICA tax,

Correct AnswerverifiedShow Answer

Figure 6-12 -Refer to Figure 6-12. Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A price floor is a legal minimum on the price at which a good or service can be sold.

Correct AnswerverifiedShow Answer

When free markets ration goods with prices, it is both efficient and impersonal.

Correct AnswerverifiedShow Answer

If a nonbinding price floor is imposed on a market, then the

Correct AnswerverifiedShow Answer

Figure 6-35 -Refer to Figure 6-35. A price floor set at $60 would create a surplus of 20 units.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedA price floor must be set abov...View AnswerShow Answer

When a tax is imposed on a good, the result is always a shortage of the good.

Correct AnswerverifiedShow Answer

Congress intended that

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. What is the effective price that sellers will receive for the good after the tax is imposed?

Correct AnswerverifiedThe effective price ...View AnswerShow Answer

Correct Answer
verified

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply.

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
A price floor must be set abov...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The effective price ...
View Answer