Question 1

Figure 6-24 
-Refer to Figure 6-24. What is the amount of the tax per unit?

Accepted Answer

A)  $8
B)  $6
C)  $4
D)  $2E) None of the above
F) All of the above

Question 2

The minimum wage, if it is binding, lowers the incomes of

Accepted Answer

A)  no workers.
B)  only those workers who become unemployed.
C)  only those workers who have jobs.
D)  all workers.E) B) and C)
F) B) and D)

Question 3

Tax incidence

Accepted Answer

A)  depends on the legislated burden.
B)  is entirely random.
C)  depends on the elasticities of supply and demand.
D)  falls entirely on buyers or entirely on sellers.E) None of the above
F) All of the above

Question 4

Most labor economists believe that the supply of labor is much more elastic than the demand.

Accepted Answer

A) True 
 B)False

Question 5

If the government levies a $500 tax per car on sellers of cars, then the price received by sellers of cars would

Accepted Answer

A)  decrease by less than $500.
B)  decrease by exactly $500.
C)  decrease by more than $500.
D)  increase by an indeterminate amount.E) A) and C)
F) B) and D)

Question 6

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

Accepted Answer

A)  $4
B)  $5
C)  $3
D)  $7E) All of the above
F) None of the above

Question 7

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Accepted Answer

A) True 
 B)False

Question 8

Figure 6-12 1 to S2, A) the market price will increase to P3. B) a surplus will occur at the new market price of P2. C) the market price will stay at P1. D) a shortage will occur at the new market price of P2." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 6-12. When the price ceiling applies in this market and the supply curve for gasoline shifts from S1 to S2,

Accepted Answer

A)  the market price will increase to P3.
B)  a surplus will occur at the new market price of P2.
C)  the market price will stay at P1.
D)  a shortage will occur at the new market price of P2.E) A) and B)
F) A) and C)

Question 9

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

Accepted Answer

A)  the quantity of baby formula demanded will increase.
B)  the quantity of baby formula supplied will decrease.
C)  a shortage of baby formula will develop.
D)  All of the above are correct.E) A) and B)
F) None of the above

Question 10

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

Accepted Answer

A)  any price below $7.
B)  any price above $3.
C)  any price below $9.
D)  any price above $7.E) B) and D)
F) A) and C)

Question 11

If a price floor is not binding, then

Accepted Answer

A)  the equilibrium price is above the price floor.
B)  the equilibrium price is below the price floor.
C)  there will be a surplus in the market.
D)  there will be a shortage in the market.E) None of the above
F) A) and C)

Question 12

Table 6-3
The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market. 
-Refer to Table 6-3. Following the imposition of a price floor $2 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting shortage is

Accepted Answer

A)  0 units.
B)  2 units.
C)  5 units.
D)  7 units.E) A) and D)
F) B) and C)

Question 13

A $2.00 tax levied on the sellers of birdhouses will shift the supply curve

Accepted Answer

A)  upward by exactly $2.00.
B)  upward by less than $2.00.
C)  downward by exactly $2.00.
D)  downward by less than $2.00.E) None of the above
F) B) and C)

Question 14

Figure 6-31 
-Refer to Figure 6-31. If the government set a price floor at $17, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 15

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 C)

Question 16

When a tax is placed on the buyers of tennis racquets, the size of the tennis racquet market

Accepted Answer

A)  and the price paid by buyers both decrease.
B)  decreases, but the price paid by buyers increases.
C)  increases, but the price paid by buyers decreases.
D)  and the price paid by buyers both increase.E) None of the above
F) A) and C)

Question 17

Economic policies often have effects that their architects did not intend or anticipate.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is correct?

Accepted Answer

A)  A tax levied on buyers will never be partially paid by sellers.
B)  Who actually pays a tax depends on the price elasticities of supply and demand.
C)  Government can decide who actually pays a tax.
D)  A tax levied on sellers always will be passed on completely to buyers.E) A) and D)
F) None of the above

Question 19

Figure 6-4 
-Refer to Figure 6-4. Which of the following statements is not correct?

Accepted Answer

A)  When the price is $10, quantity supplied equals quantity demanded.
B)  When the price is $6, there is a surplus of 8 units.
C)  When the price is $12, there is a surplus of 4 units.
D)  When the price is $16, quantity supplied exceeds quantity demanded by 12 units.E) A) and B)
F) A) and C)

Question 20

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Accepted Answer

A)  demand curve will shift upward by $20, and the effective price received by sellers will increase by $20.
B)  demand curve will shift upward by $20, and the effective price received by sellers will increase by less than $20.
C)  supply curve will shift downward by $20, and the price paid by buyers will decrease by $20.
D)  supply curve will shift downward by $20, and the price paid by buyers will decrease by less than $20.E) All of the above
F) None of the above

Exam 6: Supply, Demand, and Government Policies

A $2.00 tax levied on the sellers of birdhouses will shift the supply curve

Correct Answer
verified

Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market and the supply curve for gasoline shifts from S₁ to S₂,

Correct Answer
verified

Tax incidence

Correct Answer
verified

If the government levies a $500 tax per car on sellers of cars, then the price received by sellers of cars would

Correct Answer
verified

The minimum wage, if it is binding, lowers the incomes of

Correct Answer
verified

Figure 6-31 -Refer to Figure 6-31. If the government set a price floor at $17, would there be a shortage or surplus, and how large would be the shortage/surplus?

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

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

Correct Answer
verified

Most labor economists believe that the supply of labor is much more elastic than the demand.

Correct Answer
verified

Correct Answer
verified

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Correct Answer
verified

When a tax is placed on the buyers of tennis racquets, the size of the tennis racquet market

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

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 Answer
verified

If a price floor is not binding, then

Correct Answer
verified

Figure 6-4 -Refer to Figure 6-4. Which of the following statements is not correct?

Correct Answer
verified

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

Correct Answer
verified

Figure 6-24 -Refer to Figure 6-24. What is the amount of the tax per unit?

Correct Answer
verified

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Correct Answer
verified

Economic policies often have effects that their architects did not intend or anticipate.

Correct Answer
verified

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

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

A $2.00 tax levied on the sellers of birdhouses will shift the supply curve

Correct AnswerverifiedShow Answer

Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market and the supply curve for gasoline shifts from S1 to S2,

Correct AnswerverifiedShow Answer

Tax incidence

Correct AnswerverifiedShow Answer

If the government levies a $500 tax per car on sellers of cars, then the price received by sellers of cars would

Correct AnswerverifiedShow Answer

The minimum wage, if it is binding, lowers the incomes of

Correct AnswerverifiedShow Answer

Figure 6-31 -Refer to Figure 6-31. If the government set a price floor at $17, would there be a shortage or surplus, and how large would be the shortage/surplus?

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

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

Correct AnswerverifiedShow Answer

Most labor economists believe that the supply of labor is much more elastic than the demand.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Correct AnswerverifiedShow Answer

When a tax is placed on the buyers of tennis racquets, the size of the tennis racquet market

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

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

If a price floor is not binding, then

Correct AnswerverifiedShow Answer

Figure 6-4 -Refer to Figure 6-4. Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-24 -Refer to Figure 6-24. What is the amount of the tax per unit?

Correct AnswerverifiedShow Answer

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Correct AnswerverifiedShow Answer

Economic policies often have effects that their architects did not intend or anticipate.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market and the supply curve for gasoline shifts from S₁ to S₂,

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

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified