Question 1

The effects of rent control in the long run include lower rents and lower-quality housing.

Accepted Answer

A) True 
 B)False

Question 2

Minimum-wage laws dictate

Accepted Answer

A)   the exact wage that firms must pay workers.
B)   a maximum wage that firms may pay workers.
C)   a minimum wage that firms may pay workers.
D)   both a minimum wage and a maximum wage that firms may pay workers.E) A) and D)
F) C) and D)

Question 3

Figure 6-7 
-Refer to Figure 6-7. Suppose a price ceiling of $5 is imposed on this market. As a result,

Accepted Answer

A)   the quantity of the good supplied decreases by 20 units.
B)   the demand curve shifts to the left; quantity sold is now 30 units and the price is $5.
C)   buyers' total expenditure on the good decreases by $80.
D)   the price of the good continues to serve as the rationing mechanism.E) A) and C)
F) None of the above

Question 4

Figure 6-9 
-Refer to Figure 6-9. At which price would a price floor be nonbinding?

Accepted Answer

A)   $8
B)   $7
C)   $6
D)   $9E) None of the above
F) C) and D)

Question 5

If a price ceiling of $2 per gallon is imposed on gasoline, and the market equilibrium price is $1.50, then the price ceiling is a binding constraint on the market.

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

Not all sellers benefit from a binding price floor.

Accepted Answer

A) True 
 B)False

Question 8

Figure 6-5 
-Refer to Figure 6-5. If the horizontal line on the graph represents a price floor, then the price floor is

Accepted Answer

A)   binding and creates a surplus of 60 units of the good.
B)   binding and creates a surplus of 20 units of the good.
C)   binding and creates a surplus of 40 units of the good.
D)   not binding, and there will be no surplus or shortage of the good.E) A) and B)
F) A) and C)

Question 9

Table 6-2 
-Refer to Table 6-2. A price ceiling set at $20 will

Accepted Answer

A)   be binding and will result in a shortage of 75 units.
B)   be binding and will result in a shortage of 200 units.
C)   be binding and will result in a shortage of 125 units.
D)   not be binding.E) None of the above
F) B) and C)

Question 10

Rent control

Accepted Answer

A)   is an example of a price ceiling.
B)   leads to a larger shortage of apartments in the long run than in the short run.
C)   leads to lower rents and, in the long run, to lower-quality housing.
D)   All of the above are correct.E) A) and D)
F) B) and C)

Question 11

At the equilibrium price, the quantity that buyers want to buy exactly equals the quantity that sellers want to sell.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Table 6-1 
-Refer to Table 6-1. Which of the following price ceilings would be binding in this market?

Accepted Answer

A)   $80
B)   $70
C)   $60
D)   $50E) None of the above
F) A) and B)

Question 14

Figure 6-25 
-Refer to Figure 6-25. The effective price that sellers receive after the tax is imposed is

Accepted Answer

A)   $5.
B)   $6.
C)   $7.
D)   $8.E) A) and C)
F) B) and C)

Question 15

Figure 6-4 
-Refer to Figure 6-4. A government-imposed price of $16 in this market could be an example of a

Accepted Answer

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

Question 16

Suppose sellers of liquor are required to send $5.00 to the government for every bottle of liquor they sell. Further, suppose this tax causes the price paid by buyers of liquor to rise by $3.00 per bottle. Which of the following statements is correct?

Accepted Answer

A)   This tax causes the supply curve for liquor to shift upward by $5.00 at each quantity of liquor.
B)   The effective price received by sellers is $5.00 per bottle less than it was before the tax.
C)   Forty percent of the burden of the tax falls on buyers.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 17

If a price floor is a binding constraint on a market, then

Accepted Answer

A)   the equilibrium price must be above the price floor.
B)   the quantity demanded must exceed the quantity supplied.
C)   sellers cannot sell all they want to sell at the price floor.
D)   buyers cannot buy all they want to buy at the price floor.E) C) and D)
F) A) and B)

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

Question 19

The demand for salt is inelastic, and the supply of salt is elastic. The demand for caviar is elastic, and the supply of caviar is inelastic. Suppose that a tax of $1 per pound is levied on the sellers of salt, and a tax of $1 per pound is levied on the buyers of caviar. We would expect that most of the burden of these taxes will fall on

Accepted Answer

A)   sellers of salt and the buyers of caviar.
B)   sellers of salt and the sellers of caviar.
C)   buyers of salt and the sellers of caviar.
D)   buyers of salt and the buyers of caviar.E) A) and C)
F) A) and B)

Question 20

Figure 6-15 
-Refer to Figure 6-15. For a price ceiling to be binding in this market, it would have to be set at

Accepted Answer

A)   any price below $3.
B)   a price between $2 and $3.
C)   a price between $3 and $4.
D)   any price above $3.E) B) and C)
F) A) and B)

Exam 6: Supply, Demand, and Government Policies

Figure 6-15 -Refer to Figure 6-15. For a price ceiling to be binding in this market, it would have to be set at

Correct Answer
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Table 6-2 -Refer to Table 6-2. A price ceiling set at $20 will

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

Correct Answer
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The effects of rent control in the long run include lower rents and lower-quality housing.

Correct Answer
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Figure 6-9 -Refer to Figure 6-9. At which price would a price floor be nonbinding?

Correct Answer
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Figure 6-25 -Refer to Figure 6-25. The effective price that sellers receive after the tax is imposed is

Correct Answer
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If a price ceiling of $2 per gallon is imposed on gasoline, and the market equilibrium price is $1.50, then the price ceiling is a binding constraint on the market.

Correct Answer
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Table 6-1 -Refer to Table 6-1. Which of the following price ceilings would be binding in this market?

Correct Answer
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Correct Answer
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Figure 6-4 -Refer to Figure 6-4. A government-imposed price of $16 in this market could be an example of a

Correct Answer
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Figure 6-7 -Refer to Figure 6-7. Suppose a price ceiling of $5 is imposed on this market. As a result,

Correct Answer
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Figure 6-5 -Refer to Figure 6-5. If the horizontal line on the graph represents a price floor, then the price floor is

Correct Answer
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Not all sellers benefit from a binding price floor.

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

Correct Answer
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Rent control

Correct Answer
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If a price floor is a binding constraint on a market, then

Correct Answer
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Minimum-wage laws dictate

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

Correct Answer
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Suppose sellers of liquor are required to send $5.00 to the government for every bottle of liquor they sell. Further, suppose this tax causes the price paid by buyers of liquor to rise by $3.00 per bottle. Which of the following statements is correct?

Correct Answer
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At the equilibrium price, the quantity that buyers want to buy exactly equals the quantity that sellers want to sell.

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Figure 6-15 -Refer to Figure 6-15. For a price ceiling to be binding in this market, it would have to be set at

Correct AnswerverifiedShow Answer

Table 6-2 -Refer to Table 6-2. A price ceiling set at $20 will

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The effects of rent control in the long run include lower rents and lower-quality housing.

Correct AnswerverifiedShow Answer

Figure 6-9 -Refer to Figure 6-9. At which price would a price floor be nonbinding?

Correct AnswerverifiedShow Answer

Figure 6-25 -Refer to Figure 6-25. The effective price that sellers receive after the tax is imposed is

Correct AnswerverifiedShow Answer

If a price ceiling of $2 per gallon is imposed on gasoline, and the market equilibrium price is $1.50, then the price ceiling is a binding constraint on the market.

Correct AnswerverifiedShow Answer

Table 6-1 -Refer to Table 6-1. Which of the following price ceilings would be binding in this market?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 6-4 -Refer to Figure 6-4. A government-imposed price of $16 in this market could be an example of a

Correct AnswerverifiedShow Answer

Figure 6-7 -Refer to Figure 6-7. Suppose a price ceiling of $5 is imposed on this market. As a result,

Correct AnswerverifiedShow Answer

Figure 6-5 -Refer to Figure 6-5. If the horizontal line on the graph represents a price floor, then the price floor is

Correct AnswerverifiedShow Answer

Not all sellers benefit from a binding price floor.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Rent control

Correct AnswerverifiedShow Answer

If a price floor is a binding constraint on a market, then

Correct AnswerverifiedShow Answer

Minimum-wage laws dictate

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose sellers of liquor are required to send $5.00 to the government for every bottle of liquor they sell. Further, suppose this tax causes the price paid by buyers of liquor to rise by $3.00 per bottle. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

At the equilibrium price, the quantity that buyers want to buy exactly equals the quantity that sellers want to sell.

Correct AnswerverifiedShow Answer

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