Question 1

Figure 6-1
Panel a)  Panel b) 
  
-Refer to Figure 6-1. In which panels)  of the figure would there be a shortage of the good at the price ceiling?

Accepted Answer

A)   panel a)  only
B)   panel b)  only
C)   both panel a)  and panel b) 
D)   neither panel a)  nor panel b) E) B) and D)
F) A) and B)

Question 2

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

Accepted Answer

A)   waiting lists
B)   race
C)   price
D)   bribesE) B) and C)
F) C) and D)

Question 3

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Accepted Answer

A) True 
 B)False

Question 4

The minimum wage is an example of a

Accepted Answer

A)   price ceiling.
B)   price floor.
C)   wage subsidy.
D)   tax.E) C) and D)
F) A) and B)

Question 5

A binding minimum wage raises the incomes of some workers, but it lowers the incomes of workers who cannot find jobs.

Accepted Answer

A) True 
 B)False

Question 6

Price floors are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 7

In 2012, the U.S. minimum wage according to federal law was

Accepted Answer

A)   $4.25 per hour.
B)   $5.15 per hour.
C)   $5.75 per hour.
D)   $7.25 per hour.E) All of the above
F) A) and C)

Question 8

If the government levies a $5 tax per MP3 player on buyers of MP3 players, then the price paid by buyers of MP3 players would likely

Accepted Answer

A)   increase by more than $5.
B)   increase by exactly $5.
C)   increase by less than $5.
D)   decrease.E) All of the above
F) B) and D)

Question 9

Rent-control laws dictate

Accepted Answer

A)   the exact rent that landlords must charge tenants.
B)   a maximum rent that landlords may charge tenants.
C)   a minimum rent that landlords may charge tenants.
D)   both a minimum rent and a maximum rent that landlords may charge tenants.E) A) and C)
F) C) and D)

Question 10

A shortage results when a

Accepted Answer

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

Question 11

Figure 6-35 
-Refer to Figure 6-35. A price ceiling set at $70 would create a shortage of 40 units.

Accepted Answer

A) True 
 B)False

Question 12

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

Question 13

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) None of the above
F) All of the above

Question 14

To be binding, a price floor must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 15

As rationing mechanisms, prices

Accepted Answer

A)   and long lines are efficient.
B)   are efficient, but long lines are inefficient.
C)   are inefficient, but long lines are efficient.
D)   and long lines are inefficient.E) B) and D)
F) A) and B)

Question 16

If the government wants to reduce the burning of fossil fuels, it should impose a tax on

Accepted Answer

A)   buyers of gasoline.
B)   sellers of gasoline.
C)   either buyers or sellers of gasoline.
D)   whichever side of the market is less elastic.E) B) and D)
F) C) and D)

Question 17

Figure 6-36 
-Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer pays $4.

Accepted Answer

A) True 
 B)False

Question 18

The quantity sold in a market will decrease if the government decreases a

Accepted Answer

A)   binding price floor in that market.
B)   binding price ceiling in that market.
C)   tax on the good sold in that market.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 19

If a tax is levied on the buyers of a product, then the demand curve will

Accepted Answer

A)   not shift.
B)   shift down.
C)   shift up.
D)   become flatter.E) B) and C)
F) A) and B)

Question 20

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Accepted Answer

A)   a binding price floor
B)   a binding price ceiling
C)   a tax on the good
D)   All of the above are correct.E) A) and B)
F) A) and C)

Exam 6: Supply, Demand, and Government Policies

To be binding, a price floor must be set above the equilibrium price.

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The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

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

Correct AnswerverifiedShow Answer

If the government levies a $5 tax per MP3 player on buyers of MP3 players, then the price paid by buyers of MP3 players would likely

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Figure 6-35 -Refer to Figure 6-35. A price ceiling set at $70 would create a shortage of 40 units.

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If a tax is levied on the buyers of a product, then the demand curve will

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A binding minimum wage raises the incomes of some workers, but it lowers the incomes of workers who cannot find jobs.

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Rent-control laws dictate

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In 2012, the U.S. minimum wage according to federal law was

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Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer pays $4.

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A shortage results when a

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The minimum wage is an example of a

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The quantity sold in a market will decrease if the government decreases a

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Which of the following causes the price paid by buyers to be different than the price received by sellers?

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As rationing mechanisms, prices

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If the government wants to reduce the burning of fossil fuels, it should impose a tax on

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Which of the following is not a rationing mechanism used by landlords in cities with rent control?

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Price floors are typically imposed to benefit sellers.

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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.

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Figure 6-1 Panel a) Panel b) -Refer to Figure 6-1. In which panels) of the figure would there be a shortage of the good at the price ceiling?

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