Question 1

Figure 6-9 
-Refer to Figure 6-9. A price floor set at

Accepted Answer

A)  $4 will be binding and will result in a shortage of 3 units.
B)  $4 will be binding and will result in a shortage of 6 units.
C)  $7 will be binding and will result in a surplus of 6 units.
D)  $7 will be binding and will result in a surplus of 12 units.E) A) and B)
F) All of the above

Question 2

If a price floor is not binding, then it will have no effect on the market.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a result of rent control?

Accepted Answer

A)  fewer new apartments offered for rent
B)  less maintenance provided by landlords
C)  bribery
D)  higher quality housingE) A) and D)
F) None of the above

Question 4

Which of the following was not a result of the luxury tax imposed by Congress in 1990?

Accepted Answer

A)  The larger part of the tax burden fell on sellers.
B)  A larger part of the tax burden fell on the middle class than on the rich.
C)  Even the wealthy demanded fewer luxury goods.
D)  The tax was never repealed or even modified.E) B) and D)
F) A) and B)

Question 5

If a tax is imposed on the buyers of a product, then the tax burden will fall entirely on the buyers.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Figure 6-6 
-Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism?

Accepted Answer

A)  a price ceiling set at $8
B)  a price ceiling set at $12
C)  a price floor set at $8
D)  a price floor set at $12E) All of the above
F) A) and B)

Question 9

Figure 6-8 
-Refer to Figure 6-8. If the government imposes a price ceiling of $2 on this market, then there will be

Accepted Answer

A)  no shortage of the good.
B)  a shortage of 40 units of the good.
C)  a shortage of 60 units of the good.
D)  a shortage of 85 units of the good.E) None of the above
F) B) and C)

Question 10

A binding minimum wage may not help all workers, but it does not hurt any workers.

Accepted Answer

A) True 
 B)False

Question 11

Table 6-2
   Price  Quantity  Denanded  Quantity  Sugplied $102500$520075$10150150$15100225$2050300$250375\begin{array} { | c | c | c | } \hline 	ext { Price } & \begin{array} { c } 	ext { Quantity } \	ext { Denanded }\end{array} & \begin{array} { c } 	ext { Quantity } \	ext { Sugplied }\end{array} \\hline \$ 10 & 250 & 0\\hline \$ 5 & 200 & 75 \\hline \$ 10 & 150 & 150 \\hline \$ 15 & 100 & 225 \\hline \$ 20 & 50 & 300 \\hline \$ 25 & 0 & 375 \\hline\end{array} Price $10$5$10$15$20$25​ Quantity  Denanded ​250200150100500​ Quantity  Sugplied ​075150225300375​​ 
-Refer to Table 6-2. A price ceiling set at $15 will

Accepted Answer

A)  be binding and will result in a shortage of 50 units.
B)  be binding and will result in a shortage of 100 units.
C)  be binding and will result in a shortage of 125 units.
D)  not be binding. E) All of the above
F) A) and B)

Question 12

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers 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) C) and D)
F) A) and B)

Question 13

If a tax is imposed on a market with inelastic supply and elastic demand, then

Accepted Answer

A)  buyers will bear most of the burden of the tax.
B)  sellers will bear most of the burden of the tax.
C)  the burden of the tax will be shared equally between buyers and sellers.
D)  it is impossible to determine how the burden of the tax will be shared.E) B) and D)
F) A) and B)

Question 14

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) All of the above
F) None of the above

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Figure 6-27 
-Refer to Figure 6-27. If the government places a $2 tax in the market, the buyer bears $1 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 17

A tax on buyers decreases the quantity of the good sold in the market.

Accepted Answer

A) True 
 B)False

Question 18

Figure 6-14
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-14. The effective price that sellers receive after the tax is imposed is

Accepted Answer

A)  $6.
B)  $10.
C)  $16.
D)  $24.E) A) and C)
F) None of the above

Question 19

If a price floor is not binding, then

Accepted Answer

A)  the equilibrium price is above the price floor.
B)  the equilibrium price is below the price floor.
C)  there will be a surplus in the market.
D)  Both a)  and c)  are correct.E) B) and C)
F) None of the above

Question 20

Advocates of the minimum wage

Accepted Answer

A)  deny that the minimum wage produces any adverse effects.
B)  emphasize the benefits to teenagers of increases in the minimum wage.
C)  emphasize the low annual incomes of those who work for the minimum wage.
D)  All of the above are correct.E) A) and C)
F) None of the above

Exam 6: Supply, Demand, and Government Policies

Figure 6-8 -Refer to Figure 6-8. If the government imposes a price ceiling of $2 on this market, then there will be

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

A binding minimum wage may not help all workers, but it does not hurt any workers.

Correct Answer
verified

Figure 6-9 -Refer to Figure 6-9. A price floor set at

Correct Answer
verified

Figure 6-27 -Refer to Figure 6-27. If the government places a $2 tax in the market, the buyer bears $1 of the tax burden.

Correct Answer
verified

If a price floor is not binding, then it will have no effect on the market.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Which of the following was not a result of the luxury tax imposed by Congress in 1990?

Correct Answer
verified

A tax on buyers decreases the quantity of the good sold in the market.

Correct Answer
verified

If a tax is imposed on a market with inelastic supply and elastic demand, then

Correct Answer
verified

Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14. The effective price that sellers receive after the tax is imposed is

Correct Answer
verified

If a price floor is not binding, then

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Advocates of the minimum wage

Correct Answer
verified

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers 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 6-6 -Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism?

Correct Answer
verified

If a tax is imposed on the buyers of a product, then the tax burden will fall entirely on the buyers.

Correct Answer
verified

Which of the following is not a result of rent control?

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Figure 6-8 -Refer to Figure 6-8. If the government imposes a price ceiling of $2 on this market, then there will be

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

A binding minimum wage may not help all workers, but it does not hurt any workers.

Correct AnswerverifiedShow Answer

Figure 6-9 -Refer to Figure 6-9. A price floor set at

Correct AnswerverifiedShow Answer

Figure 6-27 -Refer to Figure 6-27. If the government places a $2 tax in the market, the buyer bears $1 of the tax burden.

Correct AnswerverifiedShow Answer

If a price floor is not binding, then it will have no effect on the market.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following was not a result of the luxury tax imposed by Congress in 1990?

Correct AnswerverifiedShow Answer

A tax on buyers decreases the quantity of the good sold in the market.

Correct AnswerverifiedShow Answer

If a tax is imposed on a market with inelastic supply and elastic demand, then

Correct AnswerverifiedShow Answer

Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14. The effective price that sellers receive after the tax is imposed is

Correct AnswerverifiedShow Answer

If a price floor is not binding, then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Advocates of the minimum wage

Correct AnswerverifiedShow Answer

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers 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 6-6 -Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism?

Correct AnswerverifiedShow Answer

If a tax is imposed on the buyers of a product, then the tax burden will fall entirely on the buyers.

Correct AnswerverifiedShow Answer

Which of the following is not a result of rent control?

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