Question 1

Which of the following would not interfere with market equilibria?

Accepted Answer

A)   a minimum wage
B)   a rent control
C)   a non-binding price floor
D)   a binding price ceilingE) B) and D)
F) C) and D)

Question 2

Which of the following is correct?

Accepted Answer

A)   Rent control and the minimum wage are both examples of price ceilings.
B)   Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor.
C)   Rent control is an example of a price floor, and the minimum wage is an example of a price ceiling.
D)   Rent control and the minimum wage are both examples of price floors.E) B) and C)
F) None of the above

Question 3

Price ceilings are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 4

Because the supply and demand of housing are inelastic in the short run, the initial shortage caused by rent control is large.

Accepted Answer

A) True 
 B)False

Question 5

Advocates of the minimum wage

Accepted Answer

A)   deny that the minimum wage produces any adverse effects.
B)   emphasize the benefits to teenagers of increases in the minimum wage.
C)   emphasize the low annual incomes of those who work for the minimum wage.
D)   All of the above are correct.E) A) and C)
F) All of the above

Question 6

If a price ceiling is not binding, then it will have no effect on the market.

Accepted Answer

A) True 
 B)False

Question 7

Table 6-5
 
-Refer to Table 6-5. Which of the following price ceilings would be binding in this market?

Accepted Answer

A)   $3
B)   $6
C)   $9
D)   None of the above price ceilings would be binding.E) A) and D)
F) None of the above

Question 8

A price ceiling set above the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 9

The impact of the minimum wage depends on the skill and experience of the worker.

Accepted Answer

A) True 
 B)False

Question 10

In an unregulated labor market, the wage adjusts to balance labor supply and labor demand.

Accepted Answer

A) True 
 B)False

Question 11

Whether a tax is levied on sellers or buyers, buyers and sellers usually share the burden of taxes.

Accepted Answer

A) True 
 B)False

Question 12

When a tax is placed on the sellers of cell phones, the size of the cell phone market

Accepted Answer

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

Question 13

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

Accepted Answer

A) True 
 B)False

Question 14

Table 6-6
 
-Refer to Table 6-6. In this market, over what range of prices would a price ceiling set by the government be binding?

Accepted Answer

A price ceiling must be set be...

Question 15

A binding minimum wage tends to

Accepted Answer

A)   cause a labor surplus.
B)   cause unemployment.
C)   have the greatest impact in the market for teenage labor.
D)   All of the above are correct.E) All of the above
F) A) and D)

Question 16

A surplus results when a

Accepted Answer

A)   nonbinding price floor is imposed on a market.
B)   nonbinding price floor is removed from a market.
C)   binding price floor is imposed on a market.
D)   binding price floor is removed from a market.E) None of the above
F) A) and D)

Question 17

Define a price floor.

Accepted Answer

A price floor is a l...

Question 18

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 19

Figure 6-32 
-Refer to Figure 6-32. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set ...

Question 20

Consider the market for gasoline. Buyers

Accepted Answer

A)   and sellers would lobby for a price ceiling.
B)   and sellers would lobby for a price floor.
C)   would lobby for a price ceiling, whereas sellers would lobby for a price floor.
D)   would lobby for a price floor, whereas sellers would lobby for a price ceiling.E) C) and D)
F) B) and C)

Exam 6: Supply, Demand, and Government Policies

The impact of the minimum wage depends on the skill and experience of the worker.

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Advocates of the minimum wage

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In an unregulated labor market, the wage adjusts to balance labor supply and labor demand.

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A binding minimum wage tends to

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A surplus results when a

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Table 6-6 -Refer to Table 6-6. In this market, over what range of prices would a price ceiling set by the government be binding?

Correct AnswerverifiedA price ceiling must be set be...View AnswerShow Answer

Which of the following would not interfere with market equilibria?

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Define a price floor.

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A price ceiling set above the equilibrium price causes a surplus in the market.

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Table 6-5 -Refer to Table 6-5. Which of the following price ceilings would be binding in this market?

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A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

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Consider the market for gasoline. Buyers

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Which of the following is correct?

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When a tax is placed on the sellers of cell phones, the size of the cell phone market

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Price ceilings are typically imposed to benefit sellers.

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Because the supply and demand of housing are inelastic in the short run, the initial shortage caused by rent control is large.

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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.

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If a price ceiling is not binding, then it will have no effect on the market.

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Whether a tax is levied on sellers or buyers, buyers and sellers usually share the burden of taxes.

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Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price ceiling set ...View AnswerShow Answer

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A price ceiling must be set be...
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A price floor is a l...
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A price ceiling set ...
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