Question 1

When a binding price floor is imposed on a market for a good,some people who want to sell the good cannot do so.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is correct?

Accepted Answer

A)   Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage raises the average wage of teenagers by 10 percent.
B)   The drop in teenage employment caused by a 10 percent increase in the minimum wage is not significant.
C)   The minimum wage is more often binding for teenagers than for other members of the labor force.
D)   All firms consistently enforce minimum-wage laws.E) A) and B)
F) A) and C)

Question 3

Buyers of a good bear the larger share of the tax burden when the
(i) supply is more elastic than the demand for the product.
(ii) demand in more elastic than the supply for the product.
(iii) tax is placed on the sellers of the product.
(iv) tax is placed on the buyers of the product.

Accepted Answer

A)   (i)  only
B)   (ii)  only
C)   (i)  and (iii)  only
D)   (i)  and (iv)  onlyE) B) and C)
F) B) and D)

Question 4

Figure 6-19
 
-Refer to Figure 6-19.Which of the following is correct?

Accepted Answer

A)   One-fourth of the burden of the tax falls on buyers, and three-fourths of the burden of the tax falls on sellers.
B)   One-third of the burden of the tax falls on buyers, and two-thirds of the burden of the tax falls on sellers.
C)   One-half of the burden of the tax falls on buyers, and one-half of the burden of the tax falls on sellers.
D)   Two-thirds of the burden of the tax falls on buyers, and one-third of the burden of the tax falls on sellers.E) A) and B)
F) B) and C)

Question 5

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

Question 6

Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

Accepted Answer

A) True 
 B)False

Question 7

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 $6.
B)   a price between $3 and $6.
C)   a price between $6 and $9.
D)   any price above $6.E) C) and D)
F) None of the above

Question 8

Rent control may lead to lower rents for those who find housing,but the quality of the housing may also be lower.

Accepted Answer

A) True 
 B)False

Question 9

Figure 6-6
 
-Refer to Figure 6-6.If the government imposes a price floor of $14 on this market,then there will be

Accepted Answer

A)   no surplus.
B)   a surplus of 20 units.
C)   a surplus of 30 units.
D)   a surplus of 40 units.E) C) and D)
F) B) and D)

Question 10

Rent-control laws dictate

Accepted Answer

A)   the exact rent that landlords must charge tenants.
B)   a maximum rent that landlords may charge tenants.
C)   a minimum rent that landlords may charge tenants.
D)   both a minimum rent and a maximum rent that landlords may charge tenants.E) All of the above
F) A) and C)

Question 11

Figure 6-18
 
-Refer to Figure 6-18.Suppose the same supply and demand curves apply,and a tax of the same amount per unit as shown here is imposed.Now,however,the buyers of the good,rather than the sellers,are required to pay the tax to the government.After the buyers pay the tax,relative to the case depicted in the figure,the burden on buyers will be

Accepted Answer

A)   larger, and the burden on sellers will be smaller.
B)   smaller, and the burden on sellers will be larger.
C)   the same, and the burden on sellers will be the same.
D)   The relative burdens in the two cases cannot be determined without further information.E) None of the above
F) B) and D)

Question 12

Regardless of whether a tax is levied on sellers or buyers,taxes encourage market activity.

Accepted Answer

A) True 
 B)False

Question 13

Rent-control laws dictate a minimum rent that landlords may charge tenants.

Accepted Answer

A) True 
 B)False

Question 14

Most labor economists believe that the supply of labor is much more elastic than the demand.

Accepted Answer

A) True 
 B)False

Question 15

The minimum wage does not apply to

Accepted Answer

A)   jobs for teenagers.
B)   jobs for members of minority groups.
C)   unpaid internships.
D)   jobs that include on-the-job training.E) C) and D)
F) A) and D)

Question 16

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) All of the above
F) C) and D)

Question 17

In a free market,the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

Accepted Answer

A) True 
 B)False

Question 18

When a tax is placed on the sellers of cell phones,the size of the cell phone market

Accepted Answer

A)   and the effective price received by sellers both increase.
B)   increases, but the effective price received by sellers decreases.
C)   decreases, but the effective price received by sellers increases.
D)   and the effective price received by sellers both decrease.E) None of the above
F) A) and B)

Question 19

A price floor set above the equilibrium price causes quantity supplied to exceed quantity demanded.

Accepted Answer

A) True 
 B)False

Question 20

Figure 6-17
 
-Refer to Figure 6-17.How is the burden of the tax shared between buyers and sellers? Buyers bear

Accepted Answer

A)   three-fourths of the burden, and sellers bear one-fourth of the burden.
B)   two-thirds of the burden, and sellers bear one-third of the burden.
C)   one-half of the burden, and sellers bear one-half of the burden.
D)   one-fourth of the burden, and sellers bear three-fourths of the burden.E) A) and B)
F) All of the above

Exam 6: Supply, Demand, And Government Policies.

Buyers of a good bear the larger share of the tax burden when the (i) supply is more elastic than the demand for the product. (ii) demand in more elastic than the supply for the product. (iii) tax is placed on the sellers of the product. (iv) tax is placed on the buyers of the product.

Correct Answer
verified

Figure 6-19 -Refer to Figure 6-19.Which of the following is correct?

Correct Answer
verified

When a tax is placed on the sellers of cell phones,the size of the cell phone market

Correct Answer
verified

The minimum wage does not apply to

Correct Answer
verified

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

Rent-control laws dictate

Correct Answer
verified

Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

Correct Answer
verified

Rent-control laws dictate a minimum rent that landlords may charge tenants.

Correct Answer
verified

Long lines

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

In a free market,the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

Correct Answer
verified

Most labor economists believe that the supply of labor is much more elastic than the demand.

Correct Answer
verified

Correct Answer
verified

When a binding price floor is imposed on a market for a good,some people who want to sell the good cannot do so.

Correct Answer
verified

A price floor set above the equilibrium price causes quantity supplied to exceed quantity demanded.

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

Regardless of whether a tax is levied on sellers or buyers,taxes encourage market activity.

Correct Answer
verified

Figure 6-6 -Refer to Figure 6-6.If the government imposes a price floor of $14 on this market,then there will be

Correct Answer
verified

Rent control may lead to lower rents for those who find housing,but the quality of the housing may also be lower.

Correct Answer
verified

Figure 6-17 -Refer to Figure 6-17.How is the burden of the tax shared between buyers and sellers? Buyers bear

Correct Answer
verified

Exam 6: Supply, Demand, And Government Policies.

Buyers of a good bear the larger share of the tax burden when the (i) supply is more elastic than the demand for the product. (ii) demand in more elastic than the supply for the product. (iii) tax is placed on the sellers of the product. (iv) tax is placed on the buyers of the product.

Correct AnswerverifiedShow Answer

Figure 6-19 -Refer to Figure 6-19.Which of the following is correct?

Correct AnswerverifiedShow Answer

When a tax is placed on the sellers of cell phones,the size of the cell phone market

Correct AnswerverifiedShow Answer

The minimum wage does not apply to

Correct AnswerverifiedShow 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 AnswerverifiedShow Answer

Rent-control laws dictate

Correct AnswerverifiedShow Answer

Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

Correct AnswerverifiedShow Answer

Rent-control laws dictate a minimum rent that landlords may charge tenants.

Correct AnswerverifiedShow Answer

Long lines

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

In a free market,the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

Correct AnswerverifiedShow Answer

Most labor economists believe that the supply of labor is much more elastic than the demand.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a binding price floor is imposed on a market for a good,some people who want to sell the good cannot do so.

Correct AnswerverifiedShow Answer

A price floor set above the equilibrium price causes quantity supplied to exceed quantity demanded.

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

Regardless of whether a tax is levied on sellers or buyers,taxes encourage market activity.

Correct AnswerverifiedShow Answer

Figure 6-6 -Refer to Figure 6-6.If the government imposes a price floor of $14 on this market,then there will be

Correct AnswerverifiedShow Answer

Rent control may lead to lower rents for those who find housing,but the quality of the housing may also be lower.

Correct AnswerverifiedShow Answer

Figure 6-17 -Refer to Figure 6-17.How is the burden of the tax shared between buyers and sellers? Buyers bear

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