Question 1

A tax on buyers will shift the

Accepted Answer

A)   demand curve upward by the amount of the tax.
B)   demand curve downward by the amount of the tax.
C)   supply curve upward by the amount of the tax.
D)   supply curve downward by the amount of the tax.E) C) and D)
F) B) and D)

Question 2

Figure 6-16 
-Refer to Figure 6-16. In this market, a minimum wage of $7.25 creates a labor

Accepted Answer

A)   shortage of 2,250 workers.
B)   shortage of 4,500 workers.
C)   surplus of 2,250 workers.
D)   surplus of 4,500 workers.E) A) and B)
F) B) and C)

Question 3

In a free, competitive market, what is the rationing mechanism?

Accepted Answer

A)   seller bias
B)   buyer bias
C)   government law
D)   priceE) None of the above
F) B) and C)

Question 4

If a binding price floor is imposed on the market for eBooks, then

Accepted Answer

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

Question 5

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 6

Figure 6-5 
-Refer to Figure 6-5. If government imposes a price floor at $9, then the price floor causes

Accepted Answer

A)   quantity demanded to decrease by 40 units.
B)   quantity supplied to increase by 20 units.
C)   a surplus of 60 units.
D)   All of the above are correct.E) C) and D)
F) B) and C)

Question 7

When a binding price floor is imposed on a market,

Accepted Answer

A)   price no longer serves as a rationing device.
B)   the quantity supplied at the price floor exceeds the quantity that would have been supplied without the price floor.
C)   only some sellers benefit.
D)   All of the above are correct.E) B) and D)
F) None of the above

Question 8

As a rationing mechanism, discrimination according to seller bias is

Accepted Answer

A)   efficient and fair.
B)   efficient, but potentially unfair.
C)   inefficient, but fair.
D)   inefficient and potentially unfair.E) A) and B)
F) A) and C)

Question 9

A price ceiling set below the equilibrium price is binding.

Accepted Answer

A) True 
 B)False

Question 10

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

Accepted Answer

A) True 
 B)False

Question 11

Price is the rationing mechanism in a free, competitive market.

Accepted Answer

A) True 
 B)False

Question 12

The effects of rent control in the long run include lower rents and lower-quality housing.

Accepted Answer

A) True 
 B)False

Question 13

If the government wants to reduce smoking, it should impose a tax on

Accepted Answer

A)   buyers of cigarettes.
B)   sellers of cigarettes.
C)   either buyers or sellers of cigarettes.
D)   whichever side of the market is less elastic.E) B) and C)
F) A) and B)

Question 14

A tax on buyers decreases demand.

Accepted Answer

A) True 
 B)False

Question 15

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Accepted Answer

A)   the supply curve for mopeds shifts downward by $200.
B)   sellers of mopeds receive $200 less per moped than they were receiving before the tax.
C)   buyers of mopeds are unaffected by the tax.
D)   None of the above is correct.E) B) and D)
F) C) and D)

Question 16

The minimum wage, if it is binding, lowers the incomes of

Accepted Answer

A)   no workers.
B)   only those workers who become unemployed.
C)   only those workers who have jobs.
D)   all workers.E) B) and C)
F) All of the above

Question 17

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

Accepted Answer

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

Question 18

Unlike minimum wage laws, wage subsidies

Accepted Answer

A)   discourage firms from hiring the working poor.
B)   cause unemployment.
C)   help only wealthy workers.
D)   raise the living standards of the working poor without creating unemployment.E) A) and C)
F) C) and D)

Question 19

Table 6-4
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 $3 above the equilibrium price in this market.
 
-Refer to Table 6-4. Following the imposition of a price floor $3 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) C) and D)
F) None of the above

Question 20

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

Exam 6: Supply, Demand, and Government Policies

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $7.25 creates a labor

Correct Answer
verified

The effects of rent control in the long run include lower rents and lower-quality housing.

Correct Answer
verified

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Correct Answer
verified

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

Correct Answer
verified

Correct Answer
verified

Unlike minimum wage laws, wage subsidies

Correct Answer
verified

In a free, competitive market, what is the rationing mechanism?

Correct Answer
verified

The minimum wage, if it is binding, lowers the incomes of

Correct Answer
verified

Figure 6-5 -Refer to Figure 6-5. If government imposes a price floor at $9, then the price floor causes

Correct Answer
verified

A tax on buyers will shift the

Correct Answer
verified

Price is the rationing mechanism in a free, competitive market.

Correct Answer
verified

A tax on buyers decreases demand.

Correct Answer
verified

If a binding price floor is imposed on the market for eBooks, then

Correct Answer
verified

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

Correct Answer
verified

A price ceiling set below the equilibrium price is binding.

Correct Answer
verified

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

Correct Answer
verified

As a rationing mechanism, discrimination according to seller bias is

Correct Answer
verified

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Correct Answer
verified

If the government wants to reduce smoking, it should impose a tax on

Correct Answer
verified

When a binding price floor is imposed on a market,

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $7.25 creates a labor

Correct AnswerverifiedShow Answer

The effects of rent control in the long run include lower rents and lower-quality housing.

Correct AnswerverifiedShow Answer

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Correct AnswerverifiedShow Answer

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Unlike minimum wage laws, wage subsidies

Correct AnswerverifiedShow Answer

In a free, competitive market, what is the rationing mechanism?

Correct AnswerverifiedShow Answer

The minimum wage, if it is binding, lowers the incomes of

Correct AnswerverifiedShow Answer

Figure 6-5 -Refer to Figure 6-5. If government imposes a price floor at $9, then the price floor causes

Correct AnswerverifiedShow Answer

A tax on buyers will shift the

Correct AnswerverifiedShow Answer

Price is the rationing mechanism in a free, competitive market.

Correct AnswerverifiedShow Answer

A tax on buyers decreases demand.

Correct AnswerverifiedShow Answer

If a binding price floor is imposed on the market for eBooks, then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A price ceiling set below the equilibrium price is binding.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

As a rationing mechanism, discrimination according to seller bias is

Correct AnswerverifiedShow Answer

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Correct AnswerverifiedShow Answer

If the government wants to reduce smoking, it should impose a tax on

Correct AnswerverifiedShow Answer

When a binding price floor is imposed on a market,

Correct AnswerverifiedShow Answer

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified