Question 1

Suppose the government has imposed a price ceiling on cellular phones.Which of the following events could transform the price ceiling from one that is binding to one that is not binding?

Accepted Answer

A)   Cellular phones become more popular.
B)   Traditional land line phones become more expensive.
C)   The components used to produce cellular phones become more expensive.
D)   A technological advance makes cellular phone production less expensive.E) A) and B)
F) B) and C)

Question 2

The demand for salt is inelastic,and the supply of salt is elastic.The demand for caviar is elastic,and the supply of caviar is inelastic.Suppose that a tax of $1 per pound is levied on the sellers of salt,and a tax of $1 per pound is levied on the buyers of caviar.We would expect that most of the burden of these taxes will fall on

Accepted Answer

A)   sellers of salt and the buyers of caviar.
B)   sellers of salt and the sellers of caviar.
C)   buyers of salt and the sellers of caviar.
D)   buyers of salt and the buyers of caviar.E) None of the above
F) B) and C)

Question 3

The Federal Insurance Contribution Act (FICA) tax is an example of a(n)

Accepted Answer

A)   payroll tax.
B)   sales tax.
C)   farm subsidy.
D)   income subsidy.E) B) and D)
F) A) and D)

Question 4

When a tax is placed on the sellers of energy drinks,the

Accepted Answer

A)   sellers bear the entire burden of the tax.
B)   buyers bear the entire burden of the tax.
C)   burden of the tax will be always be equally divided between the buyers and the sellers.
D)   burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal.E) C) and D)
F) A) and B)

Question 5

Figure 6-24
Suppose the government imposes a $2 on this market.
 
-Refer to Figure 6-24.The buyers and sellers will bear an eaqual share of the tax burden if the demand is

Accepted Answer

A)   D1, and the supply is S1.
B)   D2, and the supply is S1.
C)   D1, and the supply is S2.
D)   D2, and the supply is S2.E) B) and C)
F) C) and D)

Question 6

The price paid by buyers in a market will increase if the government
(i) increases a binding price floor in that market.
(ii) increases a binding price ceiling in that market.
(iii) decreases a tax on the good sold in that market.

Accepted Answer

A)   (ii)  only
B)   (iii)  only
C)   (i)  and (ii)  only
D)   (i) , (ii) , and (iii) E) B) and C)
F) All of the above

Question 7

Minimum-wage laws dictate the lowest wage that firms may pay workers.

Accepted Answer

A) True 
 B)False

Question 8

Table 6-4
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 $3 above the equilibrium price in this market.
 
-Refer to Table 6-4.Following the imposition of a price floor $3 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)   4 units.
C)   5 units.
D)   10 units.E) C) and D)
F) A) and C)

Question 9

Figure 6-14
The vertical distance between points A and B represents the tax in the market.
 
-Refer to Figure 6-14.The per-unit burden of the tax on sellers is

Accepted Answer

A)   $6.
B)   $8.
C)   $10.
D)   $14.E) A) and C)
F) A) and B)

Question 10

A tax on sellers 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 11

Figure 6-20
 
-Refer to Figure 6-20.Which of the following statements is correct?

Accepted Answer

A)   The amount of the tax per unit is $6.
B)   The tax leaves the size of the market unchanged.
C)   The tax is levied on buyers of the good, rather than on sellers.
D)   All of the above are correct.E) C) and D)
F) B) and D)

Question 12

A legal minimum on the price at which a good can be sold is called a price

Accepted Answer

A)   subsidy.
B)   floor.
C)   support.
D)   ceiling.E) None of the above
F) B) and C)

Question 13

Which of the following is correct? Price controls

Accepted Answer

A)   always help those they are designed to help.
B)   never help those they are designed to help.
C)   often hurt those they are designed to help.
D)   always hurt those they are designed to help.E) B) and D)
F) A) and B)

Question 14

Table 6-1
 
-Refer to Table 6-1.Suppose the government imposes a price ceiling of $5 on this market.What will be the size of the shortage in this market?

Accepted Answer

A)   0 units
B)   2 units
C)   8 units
D)   10 unitsE) A) and B)
F) None of the above

Question 15

Figure 6-21
 
-Refer to Figure 6-21.The equilibrium price in the market before the tax is imposed is

Accepted Answer

A)   $1.
B)   $2.
C)   $5.
D)   $6.E) A) and B)
F) A) and C)

Question 16

The minimum wage

Accepted Answer

A)   is an example of a price ceiling.
B)   has its greatest impact on middle-aged and immigrant workers.
C)   does not apply to unpaid internships.
D)   does not affect the quantity of labor demanded; it only affects the quantity of labor supplied.E) C) and D)
F) All of the above

Question 17

After a binding price floor becomes effective,a

Accepted Answer

A)   smaller quantity of the good is bought and sold.
B)   a larger quantity of the good is demanded.
C)   a smaller quantity of the good is supplied.
D)   All of the above are correct.E) None of the above
F) B) and C)

Question 18

Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

Accepted Answer

A)   frequent rental programs such as "Rent nine times and the tenth rental is free!"
B)   enhanced maintenance programs to promote the high quality of the cars
C)   free gasoline given to people as an incentive to a rent a car
D)   slow replacement of old rental cars with newer onesE) A) and B)
F) A) and C)

Question 19

The goal of rent control is to

Accepted Answer

A)   facilitate controlled economic experiments in urban areas.
B)   help landlords by assuring them a low vacancy rate for their apartments.
C)   help the poor by assuring them an adequate supply of apartments.
D)   help the poor by making housing more affordable.E) All of the above
F) C) and D)

Question 20

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) None of the above
F) A) and B)

Exam 6: Supply, Demand, And Government Policies.

Table 6-1 -Refer to Table 6-1.Suppose the government imposes a price ceiling of $5 on this market.What will be the size of the shortage in this market?

Correct Answer
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A tax on sellers 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
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Which of the following is correct? Price controls

Correct Answer
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When a tax is placed on the sellers of energy drinks,the

Correct Answer
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Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

Correct Answer
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Correct Answer
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A tax levied on the sellers of blueberries

Correct Answer
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Figure 6-20 -Refer to Figure 6-20.Which of the following statements is correct?

Correct Answer
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Figure 6-24 Suppose the government imposes a $2 on this market. -Refer to Figure 6-24.The buyers and sellers will bear an eaqual share of the tax burden if the demand is

Correct Answer
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Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14.The per-unit burden of the tax on sellers is

Correct Answer
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Suppose the government has imposed a price ceiling on cellular phones.Which of the following events could transform the price ceiling from one that is binding to one that is not binding?

Correct Answer
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The minimum wage

Correct Answer
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Minimum-wage laws dictate the lowest wage that firms may pay workers.

Correct Answer
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Correct Answer
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A legal minimum on the price at which a good can be sold is called a price

Correct Answer
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Figure 6-21 -Refer to Figure 6-21.The equilibrium price in the market before the tax is imposed is

Correct Answer
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The goal of rent control is to

Correct Answer
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The price paid by buyers in a market will increase if the government (i) increases a binding price floor in that market. (ii) increases a binding price ceiling in that market. (iii) decreases a tax on the good sold in that market.

Correct Answer
verified

After a binding price floor becomes effective,a

Correct Answer
verified

The Federal Insurance Contribution Act (FICA) tax is an example of a(n)

Correct Answer
verified

Exam 6: Supply, Demand, And Government Policies.

Table 6-1 -Refer to Table 6-1.Suppose the government imposes a price ceiling of $5 on this market.What will be the size of the shortage in this market?

Correct AnswerverifiedShow Answer

A tax on sellers 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

Which of the following is correct? Price controls

Correct AnswerverifiedShow Answer

When a tax is placed on the sellers of energy drinks,the

Correct AnswerverifiedShow Answer

Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A tax levied on the sellers of blueberries

Correct AnswerverifiedShow Answer

Figure 6-20 -Refer to Figure 6-20.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Figure 6-24 Suppose the government imposes a $2 on this market. -Refer to Figure 6-24.The buyers and sellers will bear an eaqual share of the tax burden if the demand is

Correct AnswerverifiedShow Answer

Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14.The per-unit burden of the tax on sellers is

Correct AnswerverifiedShow Answer

Suppose the government has imposed a price ceiling on cellular phones.Which of the following events could transform the price ceiling from one that is binding to one that is not binding?

Correct AnswerverifiedShow Answer

The minimum wage

Correct AnswerverifiedShow Answer

Minimum-wage laws dictate the lowest wage that firms may pay workers.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A legal minimum on the price at which a good can be sold is called a price

Correct AnswerverifiedShow Answer

Figure 6-21 -Refer to Figure 6-21.The equilibrium price in the market before the tax is imposed is

Correct AnswerverifiedShow Answer

The goal of rent control is to

Correct AnswerverifiedShow Answer

The price paid by buyers in a market will increase if the government (i) increases a binding price floor in that market. (ii) increases a binding price ceiling in that market. (iii) decreases a tax on the good sold in that market.

Correct AnswerverifiedShow Answer

After a binding price floor becomes effective,a

Correct AnswerverifiedShow Answer

The Federal Insurance Contribution Act (FICA) tax is an example of a(n)

Correct AnswerverifiedShow Answer

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