Question 1

The tax burden will fall most heavily on buyers of the good when the demand curve

Accepted Answer

A)   is relatively steep,and the supply curve is relatively flat.
B)   is relatively flat,and the supply curve is relatively steep.
C)   and the supply curve are both relatively flat.
D)   and the supply curve are both relatively steep.E) All of the above
F) None of the above

Question 2

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

Accepted Answer

A)   results in a shortage.
B)   is set below the equilibrium price.
C)   causes quantity supplied to exceed quantity demanded.
D)   All of the above are correct.E) A) and B)
F) A) and D)

Question 3

Table 6-2
 
-Refer to Table 6-2.A price floor set at $20 will

Accepted Answer

A)   be binding and will result in a surplus of 50 units.
B)   be binding and will result in a surplus of 100 units.
C)   be binding and will result in a surplus of 250 units.
D)   not be binding.E) All of the above
F) A) and B)

Question 4

Who bears the majority of a tax burden depends on whether the tax is placed on the buyers or the sellers.

Accepted Answer

A) True 
 B)False

Question 5

How does elasticity affect the burden of a tax? Justify your answer using supply and demand diagrams.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> The tax burden fall...

Question 6

The imposition of a binding price ceiling on a market causes quantity demanded to be

Accepted Answer

A)   greater than quantity supplied.
B)   less than quantity supplied.
C)   equal to quantity supplied.
D)   Both a and b are possible.E) A) and D)
F) A) and B)

Question 7

If the government levies a $1,000 tax per boat on sellers of boats,then the price paid by buyers of boats would

Accepted Answer

A)   increase by more than $1,000.
B)   increase by exactly $1,000.
C)   increase by less than $1,000.
D)   decrease by an indeterminate amount.E) B) and C)
F) A) and B)

Question 8

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

Accepted Answer

A) True 
 B)False

Question 9

When policymakers set prices by legal decree,they obscure the signals that normally guide the allocation of society's resources.

Accepted Answer

A) True 
 B)False

Question 10

Buyers and sellers always share the burden of a tax equally.

Accepted Answer

A) True 
 B)False

Question 11

Buyers and sellers rarely share the burden of a tax equally.

Accepted Answer

A) True 
 B)False

Question 12

The quantity sold in a market will increase if the government

Accepted Answer

A)   decreases a binding price floor in that market.
B)   decreases a binding price ceiling in that market.
C)   increases a tax on the good sold in that market.
D)   More than one of the above is correct.E) A) and B)
F) All of the above

Question 13

The minimum wage is an example of a

Accepted Answer

A)   price ceiling.
B)   price floor.
C)   wage subsidy.
D)   tax.E) All of the above
F) None of the above

Question 14

A minimum wage that is set below 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)   None of the above is correct.E) None of the above
F) C) and D)

Question 15

There are several criticisms of the minimum wage.Which of the following is not one of those criticisms? The minimum wage

Accepted Answer

A)   often hurts those people who it is intended to help.
B)   results in an excess supply of low-skilled labor.
C)   prevents some unskilled workers from getting needed on-the-job training.
D)   fails to raise the wage of any employed person.E) B) and C)
F) C) and D)

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

The United States is the only country in the world with minimum-wage laws.

Accepted Answer

A) True 
 B)False

Question 18

Figure 6-5 
-Refer to Figure 6-5.Suppose a $3 per-unit tax is imposed on the sellers of this good.What is the effective price that sellers will receive for the good after the tax is imposed?

Accepted Answer

The effective price ...

Question 19

Figure 6-2
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-2.If the government imposes a price floor of $3 on this market,then there will be

Accepted Answer

A)   no surplus.
B)   a surplus of 10 units.
C)   a surplus of 15 units.
D)   a surplus of 20 units.E) None of the above
F) C) and D)

Question 20

Figure 6-1
This figure shows the market demand and market supply curves for good Y 
-Refer to Figure 6-1.A government-imposed price of $12 in this market is an example of a

Accepted Answer

A)   binding price ceiling that creates a shortage.
B)   non-binding price ceiling that creates a shortage.
C)   binding price floor that creates a surplus.
D)   non-binding price floor that creates a surplus.E) B) and D)
F) A) and B)

Exam 6: Supply,demand,and Government Policies

Figure 6-2 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-2.If the government imposes a price floor of $3 on this market,then there will be

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Buyers and sellers always share the burden of a tax equally.

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The imposition of a binding price ceiling on a market causes quantity demanded to be

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How does elasticity affect the burden of a tax? Justify your answer using supply and demand diagrams.

Correct Answerverified The tax burden fall...View AnswerShow Answer

Who bears the majority of a tax burden depends on whether the tax is placed on the buyers or the sellers.

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When policymakers set prices by legal decree,they obscure the signals that normally guide the allocation of society's resources.

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Table 6-2 -Refer to Table 6-2.A price floor set at $20 will

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Figure 6-5 -Refer to Figure 6-5.Suppose a $3 per-unit tax is imposed on the sellers of this good.What is the effective price that sellers will receive for the good after the tax is imposed?

Correct AnswerverifiedThe effective price ...View AnswerShow Answer

Buyers and sellers rarely share the burden of a tax equally.

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The tax burden will fall most heavily on buyers of the good when the demand curve

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Figure 6-1 This figure shows the market demand and market supply curves for good Y -Refer to Figure 6-1.A government-imposed price of $12 in this market is an example of a

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There are several criticisms of the minimum wage.Which of the following is not one of those criticisms? The minimum wage

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

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The minimum wage is an example of a

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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.

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A tax of $1 on buyers shifts the demand curve downward by exactly $1.

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The quantity sold in a market will increase if the government

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

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The United States is the only country in the world with minimum-wage laws.

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If the government levies a $1,000 tax per boat on sellers of boats,then the price paid by buyers of boats would

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The tax burden fall...
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The effective price ...
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