Question 1

Rent controls only affect the demand side of the rental market.
​

Accepted Answer

A) True 
 B)False

Question 2

Define a price ceiling.

Accepted Answer

A price ceiling is a...

Question 3

Using the graph shown, answer the following questions.
a.What was the equilibrium price in this market before the tax?
b.What is the amount of the tax?
c.How much of the tax will the buyers pay?
d.How much of the tax will the sellers pay?
e.How much will the buyer pay for the product after the tax is imposed?
f. How much will the seller receive after the tax is imposed?
g. As a result of the tax, what has happened to the level of market activity?

Accepted Answer

a.$5
b.$3
c.$2
d.$1
e.$7
f.$4
...

Question 4

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 C)
F) A) and B)

Question 5

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 6

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

Accepted Answer

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

Question 7

When a tax is placed on the buyers of a product, the

Accepted Answer

A)  size of the market decreases.
B)  effective price received by sellers decreases, and the price paid by buyers increases.
C)  demand for the product decreases.
D)  All of the above are correct.E) All of the above
F) C) and D)

Question 8

A tax on sellers increases supply.

Accepted Answer

A) True 
 B)False  False

Question 9

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Accepted Answer

A)  demand curve will shift upward by $20, and the effective price received by sellers will increase by $20.
B)  demand curve will shift upward by $20, and the effective price received by sellers will increase by less than $20.
C)  supply curve will shift downward by $20, and the price paid by buyers will decrease by $20.
D)  supply curve will shift downward by $20, and the price paid by buyers will decrease by less than $20.E) A) and B)
F) A) and C)

Question 10

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

Question 11

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Accepted Answer

A) True 
 B)False

Question 12

A price ceiling will be binding only if it is set

Accepted Answer

A)  equal to the equilibrium price.
B)  above the equilibrium price.
C)  below the equilibrium price.
D)  either above or below the equilibrium price.E) A) and B)
F) A) and C)

Question 13

The proportion of minimum-wage earners who are in families with incomes below the poverty line is

Accepted Answer

A)  less than one-third.
B)  between one-third and one-half.
C)  between one-half and two-thirds.
D)  greater than two-thirds.E) A) and D)
F) B) and C)

Question 14

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

Question 16

If a tax is levied on the sellers of a product, then the supply curve will

Accepted Answer

A)  shift up.
B)  shift down.
C)  become flatter.
D)  not shift.E) B) and C)
F) All of the above

Question 17

Which of the following is correct? Price controls

Accepted Answer

A)  always help those they are designed to help.
B)  never help those they are designed to help.
C)  often hurt those they are designed to help.
D)  always hurt those they are designed to help.E) B) and C)
F) All of the above

Question 18

Taxes levied on sellers and taxes levied on buyers are equivalent.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

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

Question 20

A tax on buyers 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  True

Exam 6: Supply, Demand, and Government Policies

Rent controls only affect the demand side of the rental market.

Correct Answer
verified

Define a price ceiling.

Correct Answer
verified
A price ceiling is a...
View Answer

Correct Answer
verified
a.$5
b.$3
c.$2
d.$1
e.$7
f.$4
...
View Answer

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

Correct Answer
verified

Correct Answer
verified
If the number of transactions falls to 2...
View Answer

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

Correct Answer
verified
A

When a tax is placed on the buyers of a product, the

Correct Answer
verified

A tax on sellers increases supply.

Correct Answer
verified
False

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Correct Answer
verified

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

Correct Answer
verified

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Correct Answer
verified

A price ceiling will be binding only if it is set

Correct Answer
verified

The proportion of minimum-wage earners who are in families with incomes below the poverty line is

Correct Answer
verified

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
verified

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

Correct Answer
verified

If a tax is levied on the sellers of a product, then the supply curve will

Correct Answer
verified

Which of the following is correct? Price controls

Correct Answer
verified

Taxes levied on sellers and taxes levied on buyers are equivalent.

Correct Answer
verified

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

Correct Answer
verified

A tax on buyers 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
verified
True

Exam 6: Supply, Demand, and Government Policies

Rent controls only affect the demand side of the rental market. ​

Correct AnswerverifiedShow Answer

Define a price ceiling.

Correct AnswerverifiedA price ceiling is a...View AnswerShow Answer

Correct Answerverifieda.$5b.$3c.$2d.$1e.$7f.$4...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,

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedA

When a tax is placed on the buyers of a product, the

Correct AnswerverifiedShow Answer

A tax on sellers increases supply.

Correct AnswerverifiedFalse

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Correct AnswerverifiedShow Answer

A price ceiling will be binding only if it is set

Correct AnswerverifiedShow Answer

The proportion of minimum-wage earners who are in families with incomes below the poverty line is

Correct AnswerverifiedShow Answer

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 AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a tax is levied on the sellers of a product, then the supply curve will

Correct AnswerverifiedShow Answer

Which of the following is correct? Price controls

Correct AnswerverifiedShow Answer

Taxes levied on sellers and taxes levied on buyers are equivalent.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A tax on buyers 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 AnswerverifiedTrue

Rent controls only affect the demand side of the rental market.

Correct Answer
verified

Correct Answer
verified
A price ceiling is a...
View Answer

Correct Answer
verified
a.$5
b.$3
c.$2
d.$1
e.$7
f.$4
...
View Answer

Correct Answer
verified

Correct Answer
verified
If the number of transactions falls to 2...
View Answer

Correct Answer
verified
A

Correct Answer
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Correct Answer
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False

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True