Question 1

If a binding price ceiling is imposed on the computer market,then

Accepted Answer

A)   the demand for computers will increase.
B)   the supply of computers will decrease.
C)   a shortage of computers will develop.
D)   All of the above are correct.E) A) and D)
F) C) and D)

Question 2

As a rationing mechanism,discrimination according to seller bias is

Accepted Answer

A)   efficient and fair.
B)   efficient,but potentially unfair.
C)   inefficient,but fair.
D)   inefficient and potentially unfair.E) C) and D)
F) None of the above

Question 3

As rationing mechanisms,prices

Accepted Answer

A)   and long lines are efficient.
B)   are efficient,but long lines are inefficient.
C)   are inefficient,but long lines are efficient.
D)   and long lines are inefficient.E) A) and D)
F) A) and B)

Question 4

There are several criticisms of the minimum wage.Which of the following is not one of those criticisms?

Accepted Answer

A)   The minimum wage often hurts those people who it is intended to help.
B)   The minimum wage results in an excess supply of low-skilled labor.
C)   The minimum wage prevents some unskilled workers from getting needed on-the-job training.
D)   The minimum wage fails to raise the wage of any employed person.E) B) and C)
F) None of the above

Question 5

A minimum wage that is set above a market's equilibrium wage will result in

Accepted Answer

A)   an excess demand for labor,that is,unemployment.
B)   an excess demand for labor,that is,a shortage of workers.
C)   an excess supply of labor,that is,unemployment.
D)   an excess supply of labor,that is,a shortage of workers.E) C) and D)
F) None of the above

Question 6

Which of the following is correct?

Accepted Answer

A)   A tax burden falls more heavily on the side of the market that is more elastic.
B)   A tax burden falls more heavily on the side of the market that is less elastic.
C)   A tax burden falls more heavily on the side of the market that is closer to unit elastic.
D)   A tax burden is distributed independently of the relative elasticities of supply and demand.E) A) and B)
F) All of the above

Question 7

Figure 6-13
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-13.The price that buyers pay after the tax is imposed is

Accepted Answer

A)   $8.
B)   $10.
C)   $16.
D)   $24.E) A) and D)
F) A) and B)

Question 8

A tax on buyers shifts the demand curve and the supply curve.

Accepted Answer

A) True 
 B)False

Question 9

Most economists are in favor of price controls as a way of allocating resources in the economy.

Accepted Answer

A) True 
 B)False

Question 10

A price ceiling caused the gasoline shortage of 1973 in the United States.

Accepted Answer

A) True 
 B)False

Question 11

A minimum wage that is set below a market's equilibrium wage will result in

Accepted Answer

A)   an excess demand for labor,that is,unemployment.
B)   an excess demand for labor,that is,a shortage of workers.
C)   an excess supply of labor,that is,unemployment.
D)   None of the above is correct.E) A) and B)
F) All of the above

Question 12

Price ceilings and price floors that are binding

Accepted Answer

A)   are desirable because they make markets more efficient and more fair.
B)   cause surpluses and shortages to persist since price cannot adjust to the market equilibrium price.
C)   can have the effect of restoring a market to equilibrium.
D)   are imposed because they can make the poor in the economy better off without causing adverse effects.E) A) and B)
F) A) and D)

Question 13

The quantity sold in a market will increase if the government

Accepted Answer

A)   decreases a binding price floor in that market.
B)   increases a binding price ceiling in that market.
C)   decreases a tax on the good sold in that market.
D)   More than one of the above is correct.E) None of the above
F) All of the above

Question 14

If a tax is levied on the buyers of a product,then the supply curve

Accepted Answer

A)   will not shift.
B)   will shift up.
C)   will shift down.
D)   will become flatter.E) B) and C)
F) None of the above

Question 15

The goal of rent control is to help the poor by making housing more affordable.

Accepted Answer

A) True 
 B)False

Question 16

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,in that market,price controls would generate no inequities of their own.E) All of the above
F) A) and B)

Question 17

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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

Question 19

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 20

Which of the following observations would be consistent with the imposition of a binding price floor on a market?

Accepted Answer

A)   A smaller quantity of the good is bought and sold after the price floor becomes effective.
B)   A larger quantity of the good is demanded after the price floor becomes effective.
C)   A smaller quantity of the good is supplied after the price floor becomes effective.
D)   All of the above are correct.E) A) and D)
F) B) and C)

Exam 6: Supply, Demand, and Government Policies

The goal of rent control is to help the poor by making housing more affordable.

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A price ceiling is a legal minimum on the price at which a good or service can be sold.

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The quantity sold in a market will increase if the government

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There are several criticisms of the minimum wage.Which of the following is not one of those criticisms?

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A price ceiling caused the gasoline shortage of 1973 in the United States.

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If a binding price ceiling is imposed on the computer market,then

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Which of the following observations would be consistent with the imposition of a binding price floor on a market?

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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.

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If a tax is levied on the buyers of a product,then the supply curve

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As a rationing mechanism,discrimination according to seller bias is

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Price ceilings and price floors that are binding

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A minimum wage that is set above a market's equilibrium wage will result in

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Which of the following is correct?

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A tax on buyers shifts the demand curve and the supply curve.

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

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As rationing mechanisms,prices

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Figure 6-13 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-13.The price that buyers pay after the tax is imposed is

Correct AnswerverifiedShow Answer

A minimum wage that is set below a market's equilibrium wage will result in

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

Most economists are in favor of price controls as a way of allocating resources in the economy.

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