Question 1

Figure 6-6 
-Refer to Figure 6-6. If the government imposes a price floor of $14 on this market, then there will be

Accepted Answer

A)  no surplus.
B)  a surplus of 20 units.
C)  a surplus of 30 units.
D)  a surplus of 40 units.E) A) and D)
F) C) and D)

Question 2

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

Question 3

A tax imposed on the buyers of a good will lower 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 D)

Question 4

A binding price ceiling (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)  (ii)  only
B)  (iv)  only
C)  (i)  and (iii)  only
D)  (ii)  and (iv)  onlyE) All of the above
F) A) and B)

Question 5

Which of the following is not correct?

Accepted Answer

A)  Economists have two roles: scientist and policy adviser.
B)  As scientists, economists develop and test theories to explain the world around them.
C)  Economic policies rarely have effects that their architects did not intend or anticipate.
D)  As policy advisers, economists use their theories to help change the world for the better.E) A) and C)
F) None of the above

Question 6

Figure 6-27 
-Refer to Figure 6-27. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 7

Using the graph shown, in which the vertical distance between points A and B represents the tax in the market, answer the following questions.
a. What was the equilibrium price and quantity in this market before the tax?
b. What is the amount of the tax?
c. How much of the tax will the buyers pay?
d. How much of the tax will the sellers pay?
e. How much will the buyer pay for the product after the tax is imposed?
f. How much will the seller receive after the tax is imposed?
g. As a result of the tax, what has happened to the level of market activity?
  
a.What was the equilibrium price and quantity in this market before the tax?
b.What is the amount of the tax?
c.How much of the tax will the buyers pay?
d.How much of the tax will the sellers pay?
e.How much will the buyer pay for the product after the tax is imposed?

Accepted Answer

a.$8; 8,000 units
b.$5
c.$3
d....

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

When policymakers set prices by legal decree, they

Accepted Answer

A)  are usually following the advice of mainstream economists.
B)  improve the organization of economic activity.
C)  obscure the signals that normally guide the allocation of society's resources.
D)  are demonstrating a willingness to sacrifice fairness for the sake of a gain in efficiency.E) A) and B)
F) C) and D)

Question 10

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) A) and D)

Question 11

A tax levied on the sellers of blueberries

Accepted Answer

A)  increases sellers' costs, reduces profits, and shifts the supply curve up.
B)  increases sellers' costs, reduces profits, and shifts the supply curve down.
C)  decreases sellers' costs, increases profits, and shifts the supply curve up.
D)  decreases sellers' costs, increases profits, and shifts the supply curve down.E) C) and D)
F) B) and D)

Question 12

An example of a price floor is

Accepted Answer

A)  the regulation of gasoline prices in the U.S. in the 1970s.
B)  rent control.
C)  the minimum wage.
D)  any restriction on price that leads to a shortage.E) B) and C)
F) A) and C)

Question 13

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

Accepted Answer

A)  $4
B)  $5
C)  $6
D)  $7E) A) and C)
F) A) and B)

Question 14

A price floor set above the equilibrium price is binding.

Accepted Answer

A) True 
 B)False

Question 15

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 16

Figure 6-26 
-Refer to Figure 6-26. A price floor set at $60 would create a surplus of 20 units.

Accepted Answer

A) True 
 B)False

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

Question 18

Minimum-wage laws dictate

Accepted Answer

A)  the exact wage that firms must pay workers.
B)  a maximum wage that firms may pay workers.
C)  a minimum wage that firms may pay workers.
D)  both a minimum wage and a maximum wage that firms may pay workers.E) All of the above
F) B) and D)

Question 19

Figure 6-16 
-Refer to Figure 6-16. Suppose a tax of $5 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)  $5
B)  between $5 and $10
C)  between $10 and $14
D)  $14E) B) and C)
F) A) and C)

Question 20

The price paid by buyers 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)  imposes a binding price ceiling in that market.E) A) and D)
F) C) and D)

Exam 6: Supply, Demand, and Government Policies

The minimum wage does not apply to

Correct Answer
verified

Figure 6-27 -Refer to Figure 6-27. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Correct Answer
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Figure 6-6 -Refer to Figure 6-6. If the government imposes a price floor of $14 on this market, then there will be

Correct Answer
verified

A binding price ceiling (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

The term tax incidence refers to

Correct Answer
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Figure 6-9 -Refer to Figure 6-9. At which price would a price ceiling be binding?

Correct Answer
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Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Correct Answer
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Figure 6-26 -Refer to Figure 6-26. A price floor set at $60 would create a surplus of 20 units.

Correct Answer
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A tax imposed on the buyers of a good will lower the

Correct Answer
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Which of the following is not correct?

Correct Answer
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Minimum-wage laws dictate

Correct Answer
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The price paid by buyers in a market will increase if the government

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

Correct Answer
verified

Correct Answer
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a.$8; 8,000 units
b.$5
c.$3
d....
View Answer

Figure 6-16 -Refer to Figure 6-16. Suppose a tax of $5 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct Answer
verified

An example of a price floor is

Correct Answer
verified

When policymakers set prices by legal decree, they

Correct Answer
verified

A tax levied on the sellers of blueberries

Correct Answer
verified

A price floor set above the equilibrium price is binding.

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

The minimum wage does not apply to

Correct AnswerverifiedShow Answer

Figure 6-27 -Refer to Figure 6-27. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Correct AnswerverifiedShow Answer

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price floor of $14 on this market, then there will be

Correct AnswerverifiedShow Answer

A binding price ceiling (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

The term tax incidence refers to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Correct AnswerverifiedShow Answer

Figure 6-26 -Refer to Figure 6-26. A price floor set at $60 would create a surplus of 20 units.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Minimum-wage laws dictate

Correct AnswerverifiedShow Answer

The price paid by buyers in a market will increase if the government

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

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

Correct AnswerverifiedShow Answer

Correct Answerverifieda.$8; 8,000 unitsb.$5c.$3d....View AnswerShow Answer

Figure 6-16 -Refer to Figure 6-16. Suppose a tax of $5 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct AnswerverifiedShow Answer

An example of a price floor is

Correct AnswerverifiedShow Answer

When policymakers set prices by legal decree, they

Correct AnswerverifiedShow Answer

A tax levied on the sellers of blueberries

Correct AnswerverifiedShow Answer

A price floor set above the equilibrium price is binding.

Correct AnswerverifiedShow Answer

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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a.$8; 8,000 units
b.$5
c.$3
d....
View Answer

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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