Question 1

Figure 6-11 
-Refer to Figure 6-11.If the government imposes a price floor at $9,it would be

Accepted Answer

A)   binding if market demand is Demand A or Demand B.
B)   non-binding if market demand is Demand A or Demand B.
C)   binding if market demand is Demand A and non-binding if market demand is Demand B.
D)   non-binding if market demand is Demand A and binding if market demand is Demand B.E) B) and C)
F) A) and D)

Question 2

The term tax incidence refers to

Accepted Answer

A)   whether buyers or sellers of a good are required to send tax payments to the government.
B)   whether the demand curve or the supply curve shifts when the tax is imposed.
C)   the distribution of the tax burden between buyers and sellers.
D)   widespread view that taxes (and death) are the only certainties in life.E) A) and B)
F) C) and D)

Question 3

A binding minimum wage may not help all workers,but it does not hurt any workers.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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 because 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 C)

Question 6

The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run.

Accepted Answer

A) True 
 B)False

Question 7

If a tax is levied on the sellers of flour,then

Accepted Answer

A)   buyers will bear the entire burden of the tax.
B)   sellers will bear the entire burden of the tax.
C)   buyers and sellers will share the burden of the tax.
D)   the government will bear the entire burden of the tax.E) A) and B)
F) A) and C)

Question 8

Figure 6-17 
-Refer to Figure 6-17.The price that buyers pay after the tax is imposed is

Accepted Answer

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

Question 9

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

Question 10

Buyers of a good bear the larger share of the tax burden when the (i) 
Supply is more elastic than the demand for the product.
(ii) 
Demand in more elastic than the supply for the product.
(iii) 
Tax is placed on the sellers of the product.
(iv) 
Tax is placed on the buyers of the product.

Accepted Answer

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

Question 11

Prices are inefficient rationing devices.

Accepted Answer

A) True 
 B)False

Question 12

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

Question 13

When a price floor is binding,is the price floor set above or below the market equilibrium price?

Accepted Answer

A binding price floo...

Question 14

Figure 6-2 
-Refer to Figure 6-2.The price ceiling

Accepted Answer

A)   is binding.
B)   causes a shortage.
C)   causes the quantity demanded to exceed the quantity supplied.
D)   All of the above are correct.E) B) and D)
F) None of the above

Question 15

You have responsibility for economic policy in the country of Freedonia.Recently,the neighboring country of Sylvania has cut off all exports of oranges to Freedonia.Harpo,who is one of your advisors,suggests that you should impose a binding price ceiling in order to avoid a shortage of oranges.Chico,another one of your advisors,argues that without a binding price floor,a shortage will certainly develop.Zeppo,a third advisor,says that the best way to avoid a shortage of oranges is to take no action at all.Which of your three advisors is most likely to have studied economics?

Accepted Answer

A)   Harpo
B)   Chico
C)   Zeppo
D)   Apparently,all three advisors have studied economics,but their views on positive economics are different.E) B) and C)
F) A) and B)

Question 16

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

Accepted Answer

A)   demand for labor,that is,unemployment.
B)   demand for labor,that is,a shortage of workers.
C)   supply of labor,that is,unemployment.
D)   supply of labor,that is,a shortage of workers.E) B) and D)
F) A) and B)

Question 17

Figure 6-17 
-Refer to Figure 6-17.In the after-tax equilibrium,how much revenue does the government collect from the tax on this good?

Accepted Answer

A)   $210
B)   $345
C)   $420
D)   $480E) A) and C)
F) B) and C)

Question 18

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 so as to now pass through the point (quantity = 40,price = $5) .
C)   buyers' total expenditure on the good decreases by $100.
D)   the price of the good continues to serve as the rationing mechanism.E) B) and D)
F) A) and B)

Question 19

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

Accepted Answer

A)   $1
B)   $2
C)   $3
D)   $4E) B) and C)
F) A) and B)

Question 20

If a tax is imposed on a market with inelastic demand and elastic supply,then

Accepted Answer

A)   buyers will bear most of the burden of the tax.
B)   sellers will bear most of the burden of the tax.
C)   the burden of the tax will be shared equally between buyers and sellers.
D)   it is impossible to determine how the burden of the tax will be shared.E) B) and D)
F) B) and C)

Exam 6: Supply,demand,and Government Policies

A binding minimum wage may not help all workers,but it does not hurt any workers.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Prices are inefficient rationing devices.

Correct Answer
verified

Figure 6-17 -Refer to Figure 6-17.In the after-tax equilibrium,how much revenue does the government collect from the tax on this good?

Correct Answer
verified

If a tax is imposed on a market with inelastic demand and elastic supply,then

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

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

Correct Answer
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When a price floor is binding,is the price floor set above or below the market equilibrium price?

Correct Answer
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A binding price floo...
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Figure 6-2 -Refer to Figure 6-2.The price ceiling

Correct Answer
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The term tax incidence refers to

Correct Answer
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If a tax is levied on the sellers of flour,then

Correct Answer
verified

Price ceilings and price floors that are binding

Correct Answer
verified

Figure 6-17 -Refer to Figure 6-17.The price that buyers pay after the tax is imposed is

Correct Answer
verified

Buyers of a good bear the larger share of the tax burden when the (i) Supply is more elastic than the demand for the product. (ii) Demand in more elastic than the supply for the product. (iii) Tax is placed on the sellers of the product. (iv) Tax is placed on the buyers of the product.

Correct Answer
verified

The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run.

Correct Answer
verified

Figure 6-11 -Refer to Figure 6-11.If the government imposes a price floor at $9,it would be

Correct Answer
verified

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

Correct Answer
verified

Exam 6: Supply,demand,and Government Policies

A binding minimum wage may not help all workers,but it does not hurt any workers.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

Prices are inefficient rationing devices.

Correct AnswerverifiedShow Answer

Figure 6-17 -Refer to Figure 6-17.In the after-tax equilibrium,how much revenue does the government collect from the tax on this good?

Correct AnswerverifiedShow Answer

If a tax is imposed on a market with inelastic demand and elastic supply,then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a binding price floor is imposed on a market,

Correct AnswerverifiedShow Answer

When a price floor is binding,is the price floor set above or below the market equilibrium price?

Correct AnswerverifiedA binding price floo...View AnswerShow Answer

Figure 6-2 -Refer to Figure 6-2.The price ceiling

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The term tax incidence refers to

Correct AnswerverifiedShow Answer

If a tax is levied on the sellers of flour,then

Correct AnswerverifiedShow Answer

Price ceilings and price floors that are binding

Correct AnswerverifiedShow Answer

Figure 6-17 -Refer to Figure 6-17.The price that buyers pay after the tax is imposed is

Correct AnswerverifiedShow Answer

Buyers of a good bear the larger share of the tax burden when the (i) Supply is more elastic than the demand for the product. (ii) Demand in more elastic than the supply for the product. (iii) Tax is placed on the sellers of the product. (iv) Tax is placed on the buyers of the product.

Correct AnswerverifiedShow Answer

The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run.

Correct AnswerverifiedShow Answer

Figure 6-11 -Refer to Figure 6-11.If the government imposes a price floor at $9,it would be

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
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A binding price floo...
View Answer

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