Question 1

Minimum-wage laws dictate the

Accepted Answer

A)   average price employers must pay for labor.
B)   highest price employers may pay for labor.
C)   lowest price employers may pay for labor.
D)   the highest and lowest prices employers may pay for labor.E) All of the above
F) A) and C)

Question 2

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Accepted Answer

A)   price will no longer be the mechanism that rations scarce resources.
B)   long lines of buyers may develop.
C)   sellers could ration the good or service according to their own personal biases.
D)   All of the above are correct.E) B) and D)
F) B) and C)

Question 3

When a tax is placed on the buyers of tennis racquets, the size of the tennis racquet market

Accepted Answer

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

Question 4

To be binding, a price ceiling must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 5

When a tax is levied on sellers of tea,

Accepted Answer

A)   the well-being of both sellers and buyers of tea is unaffected.
B)   sellers of tea are made worse off, and the well-being of buyers is unaffected.
C)   sellers of tea are made worse off, and buyers of tea are made better off.
D)   both sellers and buyers of tea are made worse off.E) A) and D)
F) B) and C)

Question 6

A binding price ceiling may not help all consumers, but it does not hurt any consumers.

Accepted Answer

A) True 
 B)False

Question 7

Figure 6-13
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-13. If the government imposes a price ceiling of $6 on this market, then there will be

Accepted Answer

A)   no shortage.
B)   a shortage of 5 units.
C)   a shortage of 10 units.
D)   a shortage of 20 units.E) A) and D)
F) None of the above

Question 8

Figure 6-4 
-Refer to Figure 6-4. A government-imposed price ceiling of $6 in this market results in

Accepted Answer

A)   a shortage of 8 units.
B)   a shortage of 4 units.
C)   14 units sold.
D)   10 units sold.E) A) and B)
F) A) and C)

Question 9

Figure 6-4 
-Refer to Figure 6-4. A government-imposed price of $6 in this market could be an example of a 
i)  binding price ceiling.
Ii)  non-binding price ceiling.
Iii)  binding price floor.
Iv)  non-binding price floor.

Accepted Answer

A)   i)  only
B)   ii)  only
C)   i)  and iv)  only
D)   ii)  and iii)  onlyE) A) and B)
F) None of the above

Question 10

When a payroll tax is enacted, the wage received by workers

Accepted Answer

A)   falls, and the wage paid by firms rises.
B)   falls, and the wage paid by firms falls.
C)   rises, and the wage paid by firms falls.
D)   rises, and the wage paid by firms rises.E) B) and C)
F) A) and D)

Question 11

A tax on sellers increases supply.

Accepted Answer

A) True 
 B)False

Question 12

Figure 6-22 
-Refer to Figure 6-22. The price paid by buyers after the tax is imposed is

Accepted Answer

A)   $3.00.
B)   $3.50.
C)   $5.00.
D)   $6.00.E) B) and C)
F) A) and D)

Question 13

Figure 6-13
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-13. If the government imposes a price floor of $3 on this market, then there will be

Accepted Answer

A)   no surplus.
B)   a surplus of 10 units.
C)   a surplus of 15 units.
D)   a surplus of 20 units.E) B) and D)
F) B) and C)

Question 14

A price ceiling set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 15

When a binding price floor is imposed on a market,

Accepted Answer

A)   price no longer serves as a rationing device.
B)   the quantity demanded at the price floor exceeds the quantity that would have been demanded without the price floor.
C)   all sellers benefit.
D)   All of the above are correct.E) B) and C)
F) B) and D)

Question 16

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) A) and B)

Question 17

The primary effect of rent control in the short run is to reduce rents.

Accepted Answer

A) True 
 B)False

Question 18

Figure 6-35 
-Refer to Figure 6-35. A price floor set at $40 would create a surplus of 20 units.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Figure 6-23
 
-Refer to Figure 6-23. Which of the following is correct?

Accepted Answer

A)   The entire burden of the tax falls on sellers, and none of the burden of the tax falls on buyers.
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) C) and D)
F) B) and D)

Exam 6: Supply, Demand, and Government Policies

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Correct Answer
verified

When a tax is levied on sellers of tea,

Correct Answer
verified

When a payroll tax is enacted, the wage received by workers

Correct Answer
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The primary effect of rent control in the short run is to reduce rents.

Correct Answer
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Figure 6-4 -Refer to Figure 6-4. A government-imposed price of $6 in this market could be an example of a i) binding price ceiling. Ii) non-binding price ceiling. Iii) binding price floor. Iv) non-binding price floor.

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

Correct Answer
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Figure 6-22 -Refer to Figure 6-22. The price paid by buyers after the tax is imposed is

Correct Answer
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A tax on sellers increases supply.

Correct Answer
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To be binding, a price ceiling must be set above the equilibrium price.

Correct Answer
verified

When a tax is placed on the buyers of tennis racquets, the size of the tennis racquet market

Correct Answer
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A price ceiling set above the equilibrium price is not binding.

Correct Answer
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When a binding price floor is imposed on a market,

Correct Answer
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Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. If the government imposes a price ceiling of $6 on this market, then there will be

Correct Answer
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Figure 6-35 -Refer to Figure 6-35. A price floor set at $40 would create a surplus of 20 units.

Correct Answer
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A binding price ceiling may not help all consumers, but it does not hurt any consumers.

Correct Answer
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Figure 6-23 -Refer to Figure 6-23. Which of the following is correct?

Correct Answer
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Figure 6-4 -Refer to Figure 6-4. A government-imposed price ceiling of $6 in this market results in

Correct Answer
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Minimum-wage laws dictate the

Correct Answer
verified

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. If the government imposes a price floor of $3 on this market, then there will be

Correct Answer
verified

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

Exam 6: Supply, Demand, and Government Policies

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Correct AnswerverifiedShow Answer

When a tax is levied on sellers of tea,

Correct AnswerverifiedShow Answer

When a payroll tax is enacted, the wage received by workers

Correct AnswerverifiedShow Answer

The primary effect of rent control in the short run is to reduce rents.

Correct AnswerverifiedShow Answer

Figure 6-4 -Refer to Figure 6-4. A government-imposed price of $6 in this market could be an example of a i) binding price ceiling. Ii) non-binding price ceiling. Iii) binding price floor. Iv) non-binding price floor.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-22 -Refer to Figure 6-22. The price paid by buyers after the tax is imposed is

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A tax on sellers increases supply.

Correct AnswerverifiedShow Answer

To be binding, a price ceiling must be set above the equilibrium price.

Correct AnswerverifiedShow Answer

When a tax is placed on the buyers of tennis racquets, the size of the tennis racquet market

Correct AnswerverifiedShow Answer

A price ceiling set above the equilibrium price is not binding.

Correct AnswerverifiedShow Answer

When a binding price floor is imposed on a market,

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Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. If the government imposes a price ceiling of $6 on this market, then there will be

Correct AnswerverifiedShow Answer

Figure 6-35 -Refer to Figure 6-35. A price floor set at $40 would create a surplus of 20 units.

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A binding price ceiling may not help all consumers, but it does not hurt any consumers.

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Figure 6-23 -Refer to Figure 6-23. Which of the following is correct?

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Figure 6-4 -Refer to Figure 6-4. A government-imposed price ceiling of $6 in this market results in

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Minimum-wage laws dictate the

Correct AnswerverifiedShow Answer

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. If the government imposes a price floor of $3 on this market, then there will be

Correct AnswerverifiedShow Answer

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

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If the number of transactions falls to 2...
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