Question 1

Figure 6-18
 
-Refer to Figure 6-18.The equilibrium price in the market before the tax is imposed is

Accepted Answer

A)   $3.50.
B)   $5.
C)   $6.
D)   $7.E) All of the above
F) A) and C)

Question 2

A price floor is binding when it is set

Accepted Answer

A)   above the equilibrium price, causing a shortage.
B)   above the equilibrium price, causing a surplus.
C)   below the equilibrium price, causing a shortage.
D)   below the equilibrium price, causing a surplus.E) A) and D)
F) A) and C)

Question 3

Under rent control,tenants can expect

Accepted Answer

A)   lower rent and higher quality housing.
B)   lower rent and lower quality housing.
C)   higher rent and a shortage of rental housing.
D)   higher rent and a surplus of rental housing.E) None of the above
F) A) and B)

Question 4

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

Accepted Answer

A)   0 units
B)   2 units
C)   8 units
D)   10 unitsE) A) and C)
F) C) and D)

Question 5

Suppose the demand for macaroni is inelastic,the supply of macaroni is elastic,the demand for cigarettes is inelastic,and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the burden of

Accepted Answer

A)   both taxes would fall more heavily on the buyers than on the sellers.
B)   the macaroni tax would fall more heavily on the sellers than on the buyers, and the burden of the cigarette tax would fall more heavily on the buyers than on the sellers.
C)   the macaroni tax would fall more heavily on the buyers than on the sellers, and the burden of the cigarette tax would fall more heavily on the sellers than on the buyers.
D)   both taxes would fall more heavily on the sellers than on the buyers.E) A) and B)
F) C) and D)

Question 6

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

Accepted Answer

A)   1 to 3 percent.
B)   5 to 7 percent.
C)   10 percent.
D)   None of the above is correct because studies show no decrease in teenage employment.E) None of the above
F) B) and C)

Question 7

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

Question 8

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

Accepted Answer

A)   The effective price received by sellers is $0.40 per bottle less than it was before the tax.
B)   Sixty percent of the burden of the tax falls on sellers.
C)   This tax causes the demand curve for perfume to shift downward by $1.00 at each quantity of perfume.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 9

Figure 6-13
 
-Refer to Figure 6-13.In this market,a minimum wage of $7.25 creates a labor

Accepted Answer

A)   shortage of 2,250 workers.
B)   shortage of 4,500 workers.
C)   surplus of 2,250 workers.
D)   surplus of 4,500 workers.E) B) and C)
F) None of the above

Question 10

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 B)
F) C) and D)

Question 11

Figure 6-8
 
-Refer to Figure 6-8.When a certain price control is imposed on this market,the resulting quantity of the good that is actually bought and sold is such that buyers are willing and able to pay a maximum of P₁ dollars per unit for that quantity and sellers are willing and able to accept a minimum of P₂ dollars per unit for that quantity.If P₁ - P₂ = $3,then the price control is

Accepted Answer

A)   a price ceiling of $2.00.
B)   a price ceiling of $5.00.
C)   a price floor of $5.00.
D)   either a price ceiling of $2.00 or a price floor of $5.00.E) B) and D)
F) All of the above

Question 12

The minimum wage has its greatest impact on the market for

Accepted Answer

A)   female labor.
B)   older labor.
C)   black labor.
D)   teenage labor.E) B) and D)
F) B) and C)

Question 13

Which of the following statements about the effects of rent control is correct?

Accepted Answer

A)   The short-run effect of rent control is a surplus of apartments, and the long-run effect of rent control is a shortage of apartments.
B)   The short-run effect of rent control is a relatively small shortage of apartments, and the long-run effect of rent control is a larger shortage of apartments.
C)   In the long run, rent control leads to a shortage of apartments and an improvement in the quality of available apartments.
D)   The effects of rent control are very noticeable to the public in the short run because the primary effects of rent control occur very quickly.E) A) and B)
F) B) and C)

Question 14

Figure 6-23
 
-Refer to Figure 6-23.The effective price received by sellers after the tax is imposed is

Accepted Answer

A)   $8.
B)   $10.
C)   $14.
D)   $18.E) A) and B)
F) A) and C)

Question 15

Suppose that the demand for picture frames is highly inelastic,and the supply of picture frames is highly elastic.A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

Accepted Answer

A)   less than $0.50.
B)   $0.50.
C)   between $0.50 and $1.
D)   $1.E) All of the above
F) B) and D)

Question 16

Figure 6-12
 
-Refer to Figure 6-12.Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

Accepted Answer

A)   Buyers of gasoline paid a price of P1 before 1973; they paid a price of P2 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price.
B)   Buyers of gasoline paid a price of P1 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price.
C)   Buyers of gasoline paid a price of P2 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, with no shortage of gasoline at that price.
D)   The price ceiling was binding before 1973; the price ceiling was no longer binding after OPEC increased the price of crude oil in 1973.E) All of the above
F) A) and C)

Question 17

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

Accepted Answer

A) True 
 B)False

Question 18

Table 6-3
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 $2 above the equilibrium price in this market.
 
-Refer to Table 6-3.Following the imposition of a price floor $2 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 market price is

Accepted Answer

A)   $2.
B)   $3.
C)   $4.
D)   $5.E) All of the above
F) A) and B)

Question 19

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 20

A binding 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)   (i)  only
B)   (iii)  only
C)   (i)  and (iii)  only
D)   (ii)  and (iv)  onlyE) B) and C)
F) A) and D)

Exam 6: Supply, Demand, And Government Policies.

Figure 6-12 -Refer to Figure 6-12.Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

Correct Answer
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Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

Correct Answer
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The minimum wage has its greatest impact on the market for

Correct Answer
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Figure 6-23 -Refer to Figure 6-23.The effective price received by sellers after the tax is imposed is

Correct Answer
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Suppose the demand for macaroni is inelastic,the supply of macaroni is elastic,the demand for cigarettes is inelastic,and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the burden of

Correct Answer
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Correct Answer
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A price floor is binding when it is set

Correct Answer
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Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

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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Which of the following statements about the effects of rent control is correct?

Correct Answer
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Table 6-1 -Refer to Table 6-1.Suppose the government imposes a price floor of $1 on this market.What will be the size of the surplus in this market?

Correct Answer
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Figure 6-13 -Refer to Figure 6-13.In this market,a minimum wage of $7.25 creates a labor

Correct Answer
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Suppose that the demand for picture frames is highly inelastic,and the supply of picture frames is highly elastic.A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

Correct Answer
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Figure 6-18 -Refer to Figure 6-18.The equilibrium price in the market before the tax is imposed is

Correct Answer
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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.

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

Correct Answer
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A binding 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.

Correct Answer
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Under rent control,tenants can expect

Correct Answer
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Correct Answer
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Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

Correct Answer
verified

Exam 6: Supply, Demand, And Government Policies.

Figure 6-12 -Refer to Figure 6-12.Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

Correct AnswerverifiedShow Answer

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

Correct AnswerverifiedShow Answer

The minimum wage has its greatest impact on the market for

Correct AnswerverifiedShow Answer

Figure 6-23 -Refer to Figure 6-23.The effective price received by sellers after the tax is imposed is

Correct AnswerverifiedShow Answer

Suppose the demand for macaroni is inelastic,the supply of macaroni is elastic,the demand for cigarettes is inelastic,and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the burden of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A price floor is binding when it is set

Correct AnswerverifiedShow Answer

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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

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Which of the following statements about the effects of rent control is correct?

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

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Figure 6-13 -Refer to Figure 6-13.In this market,a minimum wage of $7.25 creates a labor

Correct AnswerverifiedShow Answer

Suppose that the demand for picture frames is highly inelastic,and the supply of picture frames is highly elastic.A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

Correct AnswerverifiedShow Answer

Figure 6-18 -Refer to Figure 6-18.The equilibrium price in the market before the tax is imposed is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A binding 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.

Correct AnswerverifiedShow Answer

Under rent control,tenants can expect

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

Correct AnswerverifiedShow Answer

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