Question 1

When a free market for a good reaches equilibrium,anyone who is willing and able to sell at the market price can sell the good.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is correct?

Accepted Answer

A)   Workers determine the supply of labor,and firms determine the demand for labor.
B)   Workers determine the demand for labor,and firms determine the supply of labor.
C)   The labor market is a single market for all different types of workers.
D)   The price of the product produced by labor adjusts to balance the supply of labor and the demand for labor.E) B) and C)
F) C) and D)

Question 3

Figure 6-10 
-Refer to Figure 6-10.The price paid by buyers after the tax is imposed is

Accepted Answer

A)   $8.
B)   $10.
C)   $14.
D)   $18.E) B) and C)
F) All of the above

Question 4

A binding minimum wage raises the incomes of those workers who have jobs,but it lowers the incomes of workers who cannot find jobs.

Accepted Answer

A) True 
 B)False

Question 5

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) B) and C)

Question 6

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

Accepted Answer

A)   imposes a binding price floor in that market.
B)   decreases a binding price ceiling in that market.
C)   decreases a tax on the good sold in that market.
D)   increases a binding price floor in that market.E) B) and D)
F) B) and C)

Question 7

If the government levies a $500 tax per car on sellers of cars,then the price received by sellers of cars would

Accepted Answer

A)   decrease by less than $500.
B)   decrease by exactly $500.
C)   decrease by more than $500.
D)   increase by an indeterminate amount.E) A) and D)
F) A) and C)

Question 8

Figure 6-10 
-Refer to Figure 6-10.The effective price received by sellers after the tax is imposed is

Accepted Answer

A)   $8.
B)   $10.
C)   $14.
D)   $18.E) All of the above
F) A) and B)

Question 9

Figure 6-14 
-Refer to Figure 6-14.Suppose a tax of $2 per unit is imposed on this market.How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)   $3
B)   between $3 and $5
C)   between $5 and $7
D)   $7E) B) and D)
F) All of the above

Question 10

If a price ceiling is not binding,then

Accepted Answer

A)   the equilibrium price is above the price ceiling.
B)   the equilibrium price is below the price ceiling.
C)   it has no legal enforcement mechanism.
D)   More than one of the above is correct.E) C) and D)
F) A) and C)

Question 11

Figure 6-17 
-Refer to Figure 6-17.A price floor set at $40 would result in a surplus of 20 units.

Accepted Answer

A) True 
 B)False

Question 12

In 1990,Congress passed a new luxury tax on items such as yachts,private airplanes,furs,jewelry,and expensive cars.The goal of the tax was to

Accepted Answer

A)   raise revenue from the wealthy.
B)   prevent wealthy people from buying luxuries.
C)   force producers of luxury goods to reduce employment.
D)   limit exports of luxury goods to other countries.E) C) and D)
F) None of the above

Question 13

Using a supply and demand diagram,show a labor market with a binding minimum wage.Use the diagram to show those who are helped by the minimum wage and those who are hurt by the minimum wage.

Accepted Answer

a.
For this example,a $300 price ceiling...

Question 14

A price ceiling set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 15

If a good or service is sold in a competitive market free of government regulation,then the price of the good or service adjusts to balance supply and demand.

Accepted Answer

A) True 
 B)False

Question 16

Figure 6-2
Panel (a) Panel (b)   
-Refer to Figure 6-2.In panel (b) ,there will be

Accepted Answer

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

Question 17

Suppose the government has imposed a price floor on cellular phones.Which of the following events could transform the price floor from one that is binding to one that is not binding?

Accepted Answer

A)   Cellular phones become less popular.
B)   Traditional land line phones become more expensive.
C)   The components used to produce cellular phones become less expensive.
D)   Firms expect the price of cellular phones to fall in the future.E) B) and D)
F) B) and C)

Question 18

The tax burden falls more heavily on the side of the market that is more inelastic.

Accepted Answer

A) True 
 B)False

Question 19

If a binding price floor is imposed on the video game market,then

Accepted Answer

A)   the demand for video games will decrease.
B)   the supply of video games will increase.
C)   a surplus of video games will develop.
D)   All of the above are correct.E) All of the above
F) B) and C)

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

Figure 6-17 -Refer to Figure 6-17.A price floor set at $40 would result in a surplus of 20 units.

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

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Which of the following is correct?

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Figure 6-10 -Refer to Figure 6-10.The effective price received by sellers after the tax is imposed is

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If a good or service is sold in a competitive market free of government regulation,then the price of the good or service adjusts to balance supply and demand.

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Figure 6-2 Panel (a) Panel (b) -Refer to Figure 6-2.In panel (b) ,there will be

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Congress intended that

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When a free market for a good reaches equilibrium,anyone who is willing and able to sell at the market price can sell the good.

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Figure 6-14 -Refer to Figure 6-14.Suppose a tax of $2 per unit is imposed on this market.How much will buyers pay per unit after the tax is imposed?

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If a binding price floor is imposed on the video game market,then

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Suppose the government has imposed a price floor on cellular phones.Which of the following events could transform the price floor from one that is binding to one that is not binding?

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A price ceiling set above the equilibrium price is not binding.

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A binding minimum wage raises the incomes of those workers who have jobs,but it lowers the incomes of workers who cannot find jobs.

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Figure 6-10 -Refer to Figure 6-10.The price paid by buyers after the tax is imposed is

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If the government levies a $500 tax per car on sellers of cars,then the price received by sellers of cars would

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The tax burden falls more heavily on the side of the market that is more inelastic.

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If a price ceiling is not binding,then

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Using a supply and demand diagram,show a labor market with a binding minimum wage.Use the diagram to show those who are helped by the minimum wage and those who are hurt by the minimum wage.

Correct Answerverifieda.For this example,a $300 price ceiling...View AnswerShow Answer

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

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In 1990,Congress passed a new luxury tax on items such as yachts,private airplanes,furs,jewelry,and expensive cars.The goal of the tax was to

Correct AnswerverifiedShow Answer

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a.
For this example,a $300 price ceiling...
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