Question 1

A tax imposed on the sellers 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) A) and C)

Question 2

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

Question 3

Suppose that in a particular market,the demand curve is highly elastic,and the supply curve is highly inelastic.If a tax is imposed in this market,then the

Accepted Answer

A)   buyers will bear a greater burden of the tax than the sellers.
B)   sellers will bear a greater burden of the tax than the buyers.
C)   buyers and sellers are likely to share the burden of the tax equally.
D)   buyers and sellers will not share the burden equally,but it is impossible to determine who will bear the greater burden of the tax without more information.E) All of the above
F) A) and D)

Question 4

The quantity sold in a market will decrease if the government

Accepted Answer

A)   decreases a binding price floor in that market.
B)   increases a binding price ceiling in that market.
C)   increases a tax on the good sold in that market.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 5

Figure 6-13 
-Refer to Figure 6-13.In this market,a minimum wage of $2.75 creates a labor

Accepted Answer

A)   shortage of 2,250 workers.
B)   shortage of 4,500 workers.
C)   surplus of 2,250 workers.
D)   neither a labor shortage nor surplus.E) All of the above
F) B) and D)

Question 6

Minimum-wage laws benefit society by creating a surplus of labor.

Accepted Answer

A) True 
 B)False

Question 7

You receive a paycheck from your employer,and your pay stub indicates that $300 was deducted to pay the FICA (Social Security/Medicare) tax.Which of the following statements is correct?

Accepted Answer

A)   The $300 that you paid is not necessarily the true burden of the tax that falls on you,the employee.
B)   Your employer is required by law to pay $300 to match the $300 deducted from your check.
C)   This type of tax is an example of a payroll tax.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 8

A tax on the buyers of sofas

Accepted Answer

A)   increases the size of the sofa market.
B)   decreases the size of the sofa market.
C)   has no effect on the size of the sofa market.
D)   may increase,decrease,or have no effect on the size of the sofa market.E) B) and C)
F) A) and D)

Question 9

Figure 6-18 
-Refer to Figure 6-18.As the figure is drawn,who sends the tax payment to the government?

Accepted Answer

A)   The buyers send the tax payment.
B)   The sellers send the tax payment.
C)   A portion of the tax payment is sent by the buyers,and the remaining portion is sent by the sellers.
D)   The question of who sends the tax payment cannot be determined from the graph.E) C) and D)
F) A) and B)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Question 12

The presence of a price control in a market for a good or service usually is an indication that

Accepted Answer

A)   an insufficient quantity of the good or service was being produced in that market to meet the public's need.
B)   the usual forces of supply and demand were not able to establish an equilibrium price in that market.
C)   policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers.
D)   policymakers correctly believed that price controls would generate no inequities of their own once imposed.E) A) and C)
F) A) and B)

Question 13

Figure 6-7 
-Refer to Figure 6-7.Suppose a price floor of $7 is imposed on this market.As a result,

Accepted Answer

A)   buyers' total expenditure on the good decreases by $20.
B)   the supply curve shifts to the left so as to now pass through the point (quantity = 40,price = $7) .
C)   the quantity of the good demanded decreases by 20 units.
D)   the price of the good continues to serve as the rationing mechanism.E) C) and D)
F) B) and C)

Question 14

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.Following the imposition of a price floor $2 above the equilibrium price,irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor.The resulting market price is

Accepted Answer

A)   $2.
B)   $3.
C)   $4.
D)   $5.E) B) and D)
F) None of the above

Question 15

Price controls can generate inequities.

Accepted Answer

A) True 
 B)False

Question 16

A tax on the sellers of cameras encourages

Accepted Answer

A)   sellers to supply a smaller quantity at every price.
B)   buyers to demand a smaller quantity at every price.
C)   sellers to supply a larger quantity at every price.
D)   Both a) and b) are correct.E) A) and B)
F) B) and C)

Question 17

A price ceiling is binding when it is set

Accepted Answer

A)   above the equilibrium price,causing a shortage.
B)   above the equilibrium price,causing a surplus.
C)   below the equilibrium price,causing a shortage.
D)   below the equilibrium price,causing a surplus.E) B) and D)
F) B) and C)

Question 18

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour,then a shortage of labor will exist.

Accepted Answer

A) True 
 B)False

Question 19

The quantity sold in a market will increase if the government

Accepted Answer

A)   decreases a binding price floor in that market.
B)   decreases a binding price ceiling in that market.
C)   increases a tax on the good sold in that market.
D)   More than one of the above is correct.E) C) and D)
F) B) and D)

Question 20

Figure 6-9 
-Refer to Figure 6-9.At which price would a price floor be nonbinding?

Accepted Answer

A)   $8
B)   $7
C)   $6
D)   $5E) All of the above
F) B) and C)

Exam 6: Supply,demand,and Government Policies

A price ceiling is binding when it is set

Correct Answer
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Price controls can generate inequities.

Correct Answer
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You receive a paycheck from your employer,and your pay stub indicates that $300 was deducted to pay the FICA (Social Security/Medicare) tax.Which of the following statements is correct?

Correct Answer
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A tax imposed on the sellers of a good will lower the

Correct Answer
verified

Figure 6-7 -Refer to Figure 6-7.Suppose a price floor of $7 is imposed on this market.As a result,

Correct Answer
verified

A tax on the buyers of sofas

Correct Answer
verified

Figure 6-13 -Refer to Figure 6-13.In this market,a minimum wage of $2.75 creates a labor

Correct Answer
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The quantity sold in a market will increase if the government

Correct Answer
verified

The quantity sold in a market will decrease if the government

Correct Answer
verified

The presence of a price control in a market for a good or service usually is an indication that

Correct Answer
verified

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

Correct Answer
verified

Minimum-wage laws benefit society by creating a surplus of labor.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Figure 6-18 -Refer to Figure 6-18.As the figure is drawn,who sends the tax payment to the government?

Correct Answer
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If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour,then a shortage of labor will exist.

Correct Answer
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Figure 6-9 -Refer to Figure 6-9.At which price would a price floor be nonbinding?

Correct Answer
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Suppose that in a particular market,the demand curve is highly elastic,and the supply curve is highly inelastic.If a tax is imposed in this market,then the

Correct Answer
verified

Correct Answer
verified

A tax on the sellers of cameras encourages

Correct Answer
verified

Exam 6: Supply,demand,and Government Policies

A price ceiling is binding when it is set

Correct AnswerverifiedShow Answer

Price controls can generate inequities.

Correct AnswerverifiedShow Answer

You receive a paycheck from your employer,and your pay stub indicates that $300 was deducted to pay the FICA (Social Security/Medicare) tax.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-7 -Refer to Figure 6-7.Suppose a price floor of $7 is imposed on this market.As a result,

Correct AnswerverifiedShow Answer

A tax on the buyers of sofas

Correct AnswerverifiedShow Answer

Figure 6-13 -Refer to Figure 6-13.In this market,a minimum wage of $2.75 creates a labor

Correct AnswerverifiedShow Answer

The quantity sold in a market will increase if the government

Correct AnswerverifiedShow Answer

The quantity sold in a market will decrease if the government

Correct AnswerverifiedShow Answer

The presence of a price control in a market for a good or service usually is an indication that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Minimum-wage laws benefit society by creating a surplus of labor.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-18 -Refer to Figure 6-18.As the figure is drawn,who sends the tax payment to the government?

Correct AnswerverifiedShow Answer

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour,then a shortage of labor will exist.

Correct AnswerverifiedShow Answer

Figure 6-9 -Refer to Figure 6-9.At which price would a price floor be nonbinding?

Correct AnswerverifiedShow Answer

Suppose that in a particular market,the demand curve is highly elastic,and the supply curve is highly inelastic.If a tax is imposed in this market,then the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A tax on the sellers of cameras encourages

Correct AnswerverifiedShow Answer

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