Question 1

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 2

A nonbinding price floor (i) 
Causes a surplus.
(ii) 
Causes a shortage.
(iii) 
Is set at a price above the equilibrium price.
(iv) 
Is set at a price below the equilibrium price.

Accepted Answer

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

Question 3

Figure 6-7 
-Refer to Figure 6-7.For a price floor to be binding in this market,it would have to be set at

Accepted Answer

A)   any price below $6.
B)   a price between $3 and $6.
C)   a price between $6 and $9.
D)   any price above $6.E) All of the above
F) B) and D)

Question 4

Scenario 6-1
Suppose that demand in the market for good X is given by the equation  and that supply in the market for good X is given by the equation 
-Refer to Scenario 6-1.If the government set a price floor at $13,would there be a shortage or surplus,and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 5

Figure 6-3

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

Accepted Answer

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

Question 6

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

Accepted Answer

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

Question 7

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 8

The minimum wage does not apply to

Accepted Answer

A)   jobs for teenagers.
B)   jobs for members of minority groups.
C)   unpaid internships.
D)   jobs that include on-the-job training.E) A) and B)
F) A) and C)

Question 9

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 shortage of 40 units of the good.
B)   binding and creates a surplus of 50 units of the good.
C)   binding and creates a surplus of 90 units of the good.
D)   not binding but creates a surplus of 40 units of the good.E) A) and B)
F) B) and C)

Question 10

To say that a price ceiling is binding is to say that the price ceiling

Accepted Answer

A)   results in a surplus.
B)   is set above the equilibrium price.
C)   causes quantity demanded to exceed quantity supplied.
D)   All of the above are correct.E) None of the above
F) C) and D)

Question 11

If a tax is imposed on the sellers of a product,then the tax burden will fall entirely on the sellers.

Accepted Answer

A) True 
 B)False

Question 12

Figure 6-17 
-Refer to Figure 6-17.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 B)
F) B) and C)

Question 13

Regardless of whether a tax is levied on sellers or buyers,taxes discourage market activity.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-18 
-Refer to Figure 6-18.Sellers pay how much of the tax per unit?

Accepted Answer

A)   $1.00.
B)   $1.50.
C)   $2.50.
D)   $3.50.E) B) and C)
F) A) and B)

Question 15

Suppose that the demand for digital cameras is elastic,and the supply of digital cameras is inelastic.A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

Accepted Answer

A)   less than $10.
B)   $10.
C)   between $10 and $20.
D)   $20.E) A) and B)
F) All of the above

Question 16

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

Question 17

Figure 6-5 
-Refer to Figure 6-5.Suppose a $4 per-unit tax is imposed on the sellers of this good.How many units of this good will be sold after the tax is imposed?

Accepted Answer

With a $4 per-unit t...

Question 18

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

Accepted Answer

A)   not shift.
B)   shift up.
C)   shift down.
D)   become flatter.E) A) and C)
F) A) and B)

Question 19

Figure 6-13 
-Refer to Figure 6-13.In this market,a minimum wage of $7.25 is

Accepted Answer

A)   binding and creates a labor shortage.
B)   binding and creates unemployment.
C)   nonbinding and creates a labor shortage.
D)   nonbinding and creates neither a labor shortage nor unemployment.E) A) and B)
F) B) and D)

Question 20

Figure 6-17 
-Refer to Figure 6-17.How is the burden of the tax shared between buyers and sellers? Buyers bear

Accepted Answer

A)   three-fourths of the burden,and sellers bear one-fourth of the burden.
B)   two-thirds of the burden,and sellers bear one-third of the burden.
C)   one-half of the burden,and sellers bear one-half of the burden.
D)   one-fourth of the burden,and sellers bear three-fourths of the burden.E) A) and D)
F) None of the above

Exam 6: Supply,demand,and Government Policies

Figure 6-18 -Refer to Figure 6-18.Sellers pay how much of the tax per unit?

Correct AnswerverifiedShow Answer

Figure 6-17 -Refer to Figure 6-17.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

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

Correct AnswerverifiedShow Answer

A nonbinding price floor (i) Causes a surplus. (ii) Causes a shortage. (iii) Is set at a price above the equilibrium price. (iv) Is set at a price below the equilibrium price.

Correct AnswerverifiedShow Answer

Regardless of whether a tax is levied on sellers or buyers,taxes discourage market activity.

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

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

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

Figure 6-13 -Refer to Figure 6-13.In this market,a minimum wage of $7.25 is

Correct AnswerverifiedShow Answer

Figure 6-5 -Refer to Figure 6-5.Suppose a $4 per-unit tax is imposed on the sellers of this good.How many units of this good will be sold after the tax is imposed?

Correct AnswerverifiedWith a $4 per-unit t...View AnswerShow Answer

Figure 6-7 -Refer to Figure 6-7.For a price floor to be binding in this market,it would have to be set at

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-17 -Refer to Figure 6-17.How is the burden of the tax shared between buyers and sellers? Buyers bear

Correct AnswerverifiedShow Answer

To say that a price ceiling is binding is to say that the price ceiling

Correct AnswerverifiedShow Answer

Suppose that the demand for digital cameras is elastic,and the supply of digital cameras is inelastic.A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

Correct AnswerverifiedShow Answer

The minimum wage does not apply to

Correct AnswerverifiedShow Answer

Scenario 6-1 Suppose that demand in the market for good X is given by the equation and that supply in the market for good X is given by the equation -Refer to Scenario 6-1.If the government set a price floor at $13,would there be a shortage or surplus,and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at...View AnswerShow Answer

If a tax is imposed on the sellers of a product,then the tax burden will fall entirely on the sellers.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
With a $4 per-unit t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A price floor set at...
View Answer

Correct Answer
verified