Question 1

Define a price floor.

Accepted Answer

A price floor is a l...

Question 2

​Suppose that a $4 per unit tax is imposed on the sellers of DVDs. The effect of the tax will be to

Accepted Answer

A)  ​shift the supply curve up by exactly $4 and the price paid by buyers will remain unchanged.
B)  ​shift the supply curve up by exactly $4 and the price paid by buyers will rise by less than $4.
C)  ​shift the supply curve up by exactly $4 and the price received by sellers will rise by exactly $4.
D)  ​shift the demand curve down by exactly $4 and the price paid by buyers will fall by exactly $4.E) None of the above
F) All of the above

Question 3

Figure 6-32 
-Refer to Figure 6-32. If the government set a price ceiling at $40, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

There woul...

Question 4

A legal minimum on the price at which a good can be sold is called a

Accepted Answer

A)  price subsidy.
B)  price floor.
C)  tax.
D)  price ceiling.E) A) and B)
F) A) and C)

Question 5

Buyers and sellers always share the burden of a tax equally.

Accepted Answer

A) True 
 B)False

Question 6

A tax imposed on the buyers 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) B) and C)
F) A) and B)

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Other than OPEC, the shortage of gasoline in the U.S. in the 1970s could also be blamed on

Accepted Answer

A)  a sharp increase in the demand for gasoline that was brought on by the Vietnam War.
B)  the government's policy of maintaining a price ceiling on gasoline.
C)  an indifference among U.S. consumers toward conservation.
D)  the lack of substitutes for crude oil.E) B) and D)
F) None of the above

Question 9

The minimum wage

Accepted Answer

A)  is an example of a price ceiling.
B)  has its greatest impact on middle-aged and immigrant workers.
C)  does not apply to unpaid internships.
D)  does not affect the quantity of labor demanded; it only affects the quantity of labor supplied.E) B) and C)
F) All of the above

Question 10

Figure 6-21 
-Refer to Figure 6-21. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the government. Acme is left with how much money?

Accepted Answer

A)  $8.00
B)  $9.00
C)  $10.50
D)  $12.00E) A) and D)
F) A) and B)

Question 11

Figure 6-11 
-Refer to Figure 6-11. Which of the following statements is not correct?

Accepted Answer

A)  A government-imposed price of $8 would be a binding price floor if market demand is Demand A and a binding price ceiling if market demand is Demand B.
B)  A government-imposed price of $10 would be a binding price ceiling if market demand is either Demand A or Demand B.
C)  A government-imposed price of $4 would be a binding price ceiling if market demand is either Demand A or Demand B.
D)  A government-imposed price of $10 would be a binding price floor if market demand is Demand A and a non-binding price ceiling if market demand is Demand B.E) None of the above
F) A) and D)

Question 12

​The incidence of a tax is

Accepted Answer

A)  ​always determined by the demand side of the market.
B)  ​always determined by the supply side of the market.
C)  ​always determined by the interaction of the demand and supply side of the market..
D)  ​always determined by which side of the market the government imposes the tax on.E) A) and B)
F) A) and D)

Question 13

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

Question 14

Assume the demand for cigarettes is relatively inelastic, and the supply of cigarettes is relatively elastic. When cigarettes are taxed, we would expect

Accepted Answer

A)  most of the burden of the tax to fall on sellers of cigarettes, regardless of whether buyers or sellers of cigarettes are required to pay the tax to the government.
B)  most of the burden of the tax to fall on buyers of cigarettes, regardless of whether buyers or sellers of cigarettes are required to pay the tax to the government.
C)  the distribution of the tax burden between buyers and sellers of cigarettes to depend on whether buyers or sellers of cigarettes are required to pay the tax to the government.
D)  a large percentage of smokers to quit smoking in response to the tax.E) All of the above
F) None of the above

Question 15

Which of the following is correct? Price controls

Accepted Answer

A)  always help those they are designed to help.
B)  never help those they are designed to help.
C)  often hurt those they are designed to help.
D)  always hurt those they are designed to help.E) All of the above
F) A) and B)

Question 16

Rent control

Accepted Answer

A)  serves as an example of how a social problem can be alleviated or even solved by government policies.
B)  serves as an example of a price ceiling.
C)  is regarded by most economists as an efficient way of helping the poor.
D)  is the most efficient way to allocate scarce housing resources.E) C) and D)
F) B) and D)

Question 17

In 1990, Congress passed a new luxury tax on items such as yachts, private airplanes, furs, jewelry, and expensive cars. The goal of the tax was to

Accepted Answer

A)  raise revenue from the wealthy.
B)  prevent wealthy people from buying luxuries.
C)  force producers of luxury goods to reduce employment.
D)  limit exports of luxury goods to other countries.E) None of the above
F) A) and C)

Question 18

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

Question 19

Figure 6-3
Panel (a) 
Panel (b)   
-Refer to Figure 6-3. In panel (b) , there will be

Accepted Answer

A)  a shortage.
B)  equilibrium in the market.
C)  a surplus.
D)  lines of people waiting to buy the good.E) A) and B)
F) None of the above

Question 20

Figure 6-13
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-13. Which of the following price ceilings would be binding in this market?

Accepted Answer

A)  $4
B)  $5
C)  $6
D)  $7E) B) and C)
F) All of the above

Exam 6: Supply, Demand, and Government Policies

Figure 6-21 -Refer to Figure 6-21. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the government. Acme is left with how much money?

Correct Answer
verified

In 1990, Congress passed a new luxury tax on items such as yachts, private airplanes, furs, jewelry, and expensive cars. The goal of the tax was to

Correct Answer
verified

Correct Answer
verified

Define a price floor.

Correct Answer
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A price floor is a l...
View Answer

Suppose that a $4 per unit tax is imposed on the sellers of DVDs. The effect of the tax will be to

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

Correct Answer
verified

Rent control

Correct Answer
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Assume the demand for cigarettes is relatively inelastic, and the supply of cigarettes is relatively elastic. When cigarettes are taxed, we would expect

Correct Answer
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The incidence of a tax is

Correct Answer
verified

Which of the following is correct? Price controls

Correct Answer
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Other than OPEC, the shortage of gasoline in the U.S. in the 1970s could also be blamed on

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 legal minimum on the price at which a good can be sold is called a

Correct Answer
verified

Buyers and sellers always share the burden of a tax equally.

Correct Answer
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The minimum wage

Correct Answer
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Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $40, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
There woul...
View Answer

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

Correct Answer
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Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. In panel (b) , there will be

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. Which of the following price ceilings would be binding in this market?

Correct Answer
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Figure 6-11 -Refer to Figure 6-11. Which of the following statements is not correct?

Correct Answer
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Exam 6: Supply, Demand, and Government Policies

Figure 6-21 -Refer to Figure 6-21. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the government. Acme is left with how much money?

Correct AnswerverifiedShow Answer

In 1990, Congress passed a new luxury tax on items such as yachts, private airplanes, furs, jewelry, and expensive cars. The goal of the tax was to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Define a price floor.

Correct AnswerverifiedA price floor is a l...View AnswerShow Answer

​Suppose that a $4 per unit tax is imposed on the sellers of DVDs. The effect of the tax will be to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Rent control

Correct AnswerverifiedShow Answer

Assume the demand for cigarettes is relatively inelastic, and the supply of cigarettes is relatively elastic. When cigarettes are taxed, we would expect

Correct AnswerverifiedShow Answer

​The incidence of a tax is

Correct AnswerverifiedShow Answer

Which of the following is correct? Price controls

Correct AnswerverifiedShow Answer

Other than OPEC, the shortage of gasoline in the U.S. in the 1970s could also be blamed on

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 legal minimum on the price at which a good can be sold is called a

Correct AnswerverifiedShow Answer

Buyers and sellers always share the burden of a tax equally.

Correct AnswerverifiedShow Answer

The minimum wage

Correct AnswerverifiedShow Answer

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $40, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedThere woul...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. In panel (b) , there will be

Correct AnswerverifiedShow Answer

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. Which of the following price ceilings would be binding in this market?

Correct AnswerverifiedShow Answer

Figure 6-11 -Refer to Figure 6-11. Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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A price floor is a l...
View Answer

Suppose that a $4 per unit tax is imposed on the sellers of DVDs. The effect of the tax will be to

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The incidence of a tax is

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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There woul...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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