Question 1

A price ceiling set below the equilibrium price causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 2

When OPEC raised the price of crude oil in the 1970s,it caused the

Accepted Answer

A)   supply of gasoline to decrease.
B)   quantity of gasoline demanded to decrease.
C)   equilibrium price of gasoline to increase.
D)   All of the above are correct.E) C) and D)
F) B) and D)

Question 3

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

Question 4

Workers determine the supply of labor,and firms determine the demand for labor.

Accepted Answer

A) True 
 B)False

Question 5

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

Question 6

Suppose the demand for macaroni is inelastic,the supply of macaroni is elastic,the demand for cigarettes is inelastic,and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the burden of

Accepted Answer

A)   both taxes would fall more heavily on the buyers than on the sellers.
B)   the macaroni tax would fall more heavily on the sellers than on the buyers,and the burden of the cigarette tax would fall more heavily on the buyers than on the sellers.
C)   the macaroni tax would fall more heavily on the buyers than on the sellers,and the burden of the cigarette tax would fall more heavily on the sellers than on the buyers.
D)   both taxes would fall more heavily on the sellers than on the buyers.E) A) and B)
F) All of the above

Question 7

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

Accepted Answer

A)   increase the effective price of coffee received by sellers,and increase the equilibrium quantity of coffee.
B)   increase the effective price of coffee received by sellers,and decrease the equilibrium quantity of coffee.
C)   decrease the effective price of coffee received by sellers,and increase the equilibrium quantity of coffee.
D)   decrease the effective price of coffee received by sellers,and decrease the equilibrium quantity of coffee.E) A) and B)
F) A) and C)

Question 8

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

Question 9

Price ceilings are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 10

When a tax of $1.00 per gallon is imposed on sellers of gasoline,the supply curve for gasoline shifts upward,but by less than $1.00.

Accepted Answer

A) True 
 B)False

Question 11

Economists blame the long lines at gasoline stations in the U.S.in the 1970s on

Accepted Answer

A)   U.S.government regulations pertaining to the price of gasoline.
B)   the Organization of Petroleum Exporting Countries (OPE
C)  .
C)   major oil companies operating in the U.S.
D)   consumers who bought gasoline frequently,even when their cars' gasoline tanks were nearly full.E) B) and D)
F) A) and C)

Question 12

When the government imposes a binding price ceiling on a competitive market,a surplus of the good arises,and sellers must ration the scarce goods among the large number of potential buyers.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

An example of a price floor is

Accepted Answer

A)   the regulation of gasoline prices in the U.S.in the 1970s.
B)   rent control.
C)   the minimum wage.
D)   any restriction on price that leads to a shortage.E) C) and D)
F) All of the above

Question 15

A binding minimum wage

Accepted Answer

A)   alters both the quantity demanded and quantity supplied of labor.
B)   affects only the quantity of labor demanded; it does not affect the quantity of labor supplied.
C)   has no effect on the quantity of labor demanded or the quantity of labor supplied.
D)   causes only temporary unemployment because the market will adjust and eliminate any temporary surplus of workers.E) B) and C)
F) None of the above

Question 16

A payroll tax is a

Accepted Answer

A)   fixed number of dollars that every firm must pay to the government for each worker that the firm hires.
B)   tax that each firm must pay to the government before the firm can hire workers and operate its business.
C)   tax on the wages that firms pay their workers.
D)   tax on all wages above the minimum wage.E) C) and D)
F) A) and C)

Question 17

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

Accepted Answer

A)   $8.
B)   $10.
C)   $16.
D)   $24.E) A) and B)
F) All of the above

Question 18

A tax imposed on the sellers of a good will raise 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) C) and D)

Question 19

Figure 6-8 1 dollars per unit for that quantity and sellers are willing and able to accept a minimum of P2 dollars per unit for that quantity.If P1 - P2 = $3,then the price control is A)  a price ceiling of $2.00. B)  a price ceiling of $5.00. C)  a price floor of $5.00. D)  either a price ceiling of $2.00 or a price floor of $5.00." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 6-8.When a certain price control is imposed on this market,the resulting quantity of the good that is actually bought and sold is such that buyers are willing and able to pay a maximum of P1 dollars per unit for that quantity and sellers are willing and able to accept a minimum of P2 dollars per unit for that quantity.If P1 - P2 = $3,then the price control is

Accepted Answer

A)   a price ceiling of $2.00.
B)   a price ceiling of $5.00.
C)   a price floor of $5.00.
D)   either a price ceiling of $2.00 or a price floor of $5.00.E) C) and D)
F) All of the above

Question 20

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

Exam 6: Supply,demand,and Government Policies

Workers determine the supply of labor,and firms determine the demand for labor.

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

Correct Answer
verified

When a tax of $1.00 per gallon is imposed on sellers of gasoline,the supply curve for gasoline shifts upward,but by less than $1.00.

Correct Answer
verified

A price ceiling set below the equilibrium price causes a shortage in the market.

Correct Answer
verified

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

Economists blame the long lines at gasoline stations in the U.S.in the 1970s on

Correct Answer
verified

When OPEC raised the price of crude oil in the 1970s,it caused the

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

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

Correct Answer
verified

A payroll tax is a

Correct Answer
verified

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

Correct Answer
verified

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

Correct Answer
verified

Suppose the demand for macaroni is inelastic,the supply of macaroni is elastic,the demand for cigarettes is inelastic,and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the burden of

Correct Answer
verified

An example of a price floor is

Correct Answer
verified

Correct Answer
verified

Price ceilings are typically imposed to benefit sellers.

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 price that buyers pay after the tax is imposed is

Correct Answer
verified

A binding minimum wage

Correct Answer
verified

When the government imposes a binding price ceiling on a competitive market,a surplus of the good arises,and sellers must ration the scarce goods among the large number of potential buyers.

Correct Answer
verified

Exam 6: Supply,demand,and Government Policies

Workers determine the supply of labor,and firms determine the demand for labor.

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

Correct AnswerverifiedShow Answer

When a tax of $1.00 per gallon is imposed on sellers of gasoline,the supply curve for gasoline shifts upward,but by less than $1.00.

Correct AnswerverifiedShow Answer

A price ceiling set below the equilibrium price causes a shortage in the market.

Correct AnswerverifiedShow Answer

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

Economists blame the long lines at gasoline stations in the U.S.in the 1970s on

Correct AnswerverifiedShow Answer

When OPEC raised the price of crude oil in the 1970s,it caused the

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 AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A payroll tax is a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

Correct AnswerverifiedShow Answer

Suppose the demand for macaroni is inelastic,the supply of macaroni is elastic,the demand for cigarettes is inelastic,and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the burden of

Correct AnswerverifiedShow Answer

An example of a price floor is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Price ceilings are typically imposed to benefit sellers.

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 price that buyers pay after the tax is imposed is

Correct AnswerverifiedShow Answer

A binding minimum wage

Correct AnswerverifiedShow Answer

When the government imposes a binding price ceiling on a competitive market,a surplus of the good arises,and sellers must ration the scarce goods among the large number of potential buyers.

Correct AnswerverifiedShow Answer

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