Question 1

What will happen if a newly imposed minimum wage is set above the equilibrium wage in a labour market

Accepted Answer

A)  The equilibrium wage in the market will rise.
B)  Every worker who is earning a wage below the minimum will be better off.
C)  Some workers will get a raise and some workers will lose their jobs.
D)  Workers earning more than the minimum wage will be worse off.E) B) and C)
F) All of the above

Question 2

When free markets ration goods with prices,it is both efficient and impersonal.

Accepted Answer

A) True 
 B)False

Question 3

Why are policymakers led to control prices

Accepted Answer

A)  They view the market's outcome as inefficient.
B)  They view the market's outcome as unfair.
C)  All politicians enjoy exercising their power.
D)  They are required to do so under the Employment Act of 1946.E) B) and C)
F) A) and D)

Question 4

A price ceiling is a legal minimum on the price of a good or service.

Accepted Answer

A) True 
 B)False  False

Question 5

Market demand is given as QD = 75 - 2P.Market supply is given as QS = 3P.Which legally imposed price would constitute a binding price floor

Accepted Answer

A)  $0
B)  $5
C)  $15
D)  $40E) B) and D)
F) All of the above

Question 6

Figure 6-4
 
-Refer to Figure 6-4.With a price ceiling present in this market,what will happen when the supply curve for gasoline shifts from S₁ to S₂

Accepted Answer

A)  The price will increase to P₃.
B)  A surplus will occur at the new market price of P₂.
C)  The market price will stay at P₁ due to the price ceiling.
D)  A shortage will occur at the price ceiling of P₂.E) B) and D)
F) All of the above

Question 7

Figure 6-11
 
-Refer to Figure 6-11.In which market will the majority of a tax be paid by the seller

Accepted Answer

A)  market (a) 
B)  market (b) 
C)  market (c) 
D)  market (d) E) C) and D)
F) All of the above

Question 8

Market demand is given as QD = 100 - P.Market supply is given as QS = 4P.Which legally imposed price would constitute a binding price ceiling

Accepted Answer

A)  $16
B)  $26
C)  $66
D)  $96E) All of the above
F) A) and D)

Question 9

In the housing market,what effect do rent controls have on quantity supplied and quantity demanded

Accepted Answer

A)  causes both to fall
B)  causes quantity supplied to fall and quantity demanded to rise
C)  causes quantity supplied to rise and quantity demanded to fall
D)  causes both to riseE) A) and C)
F) A) and B) B

Question 10

When binding price ceilings are imposed in a market,what happens

Accepted Answer

A)  Price no longer serves as a rationing device.
B)  The market will be cleared of any shortages or surpluses that existed previously.
C)  Buyers and sellers both benefit equally.
D)  The market concludes that the government is attempting to improve market efficiency.E) B) and C)
F) A) and C)

Question 11

Which statement best describes a price floor

Accepted Answer

A)  A price floor is a legal minimum on the price at which a good can be sold.
B)  A price floor is a legal maximum on the price at which a good can be sold.
C)  A price floor is temporarily set below the market equilibrium.
D)  A price floor is temporarily set at the market equilibrium.E) B) and D)
F) C) and D)

Question 12

Market demand is given as QD = 150 - 3P.Market supply is given as QS = 2P + 50.Which legally imposed price would constitute a binding price floor

Accepted Answer

A)  $10
B)  $15
C)  $20
D)  $25E) B) and C)
F) None of the above D

Question 13

Who pays the majority of a tax levied on a product depends on whether the tax is placed on the buyer or the seller.

Accepted Answer

A) True 
 B)False

Question 14

Upon whom does a minimum wage have its greatest impact

Accepted Answer

A)  older workers
B)  male workers
C)  female workers
D)  teenage workersE) A) and D)
F) A) and C)

Question 15

When will buyers of a product pay the majority of a tax placed on a product

Accepted Answer

A)  when supply is more elastic than demand
B)  when demand is more elastic than supply
C)  when the tax is placed on the seller of the product
D)  when the tax is placed on the buyer of the productE) B) and D)
F) All of the above

Question 16

Market demand is given as QD = 280 - 4P.Market supply is given as QS = 2P + 40.Which legally imposed price would constitute a binding price ceiling

Accepted Answer

A)  $30
B)  $40
C)  $50
D)  $60E) C) and D)
F) A) and B)

Question 17

What do economists generally regard rent control to be

Accepted Answer

A)  an efficient and equitable way to help low-income households
B)  not efficient, but the best way to solve a serious social problem
C)  a highly inefficient way to help low-income households raise their standard of living
D)  an efficient way to allocate housing, but not a good way to help low-income householdsE) All of the above
F) A) and B)

Question 18

Figure 6-8
 
-Refer to Figure 6-8.What is the price buyers will pay after the tax is imposed

Accepted Answer

A)  $5.00
B)  $6.00
C)  $7.00
D)  $8.00E) B) and C)
F) B) and D)

Question 19

Rent control may lead to lower rents for those who find housing,but the quality of the housing may also be lower.

Accepted Answer

A) True 
 B)False

Question 20

What do advocates of the minimum wage believe,in general

Accepted Answer

A)  There are no adverse effects of minimum-wage laws.
B)  Adverse effects are small, and generally a higher minimum wage makes the poor better off.
C)  The minimum wage is the answer to society's economic problems.
D)  The market system should be replaced by central economic planning, in accordance with socialist principles.E) All of the above
F) A) and B)

Exam 6: Supply, demand, and Government Policies

What will happen if a newly imposed minimum wage is set above the equilibrium wage in a labour market

Correct AnswerverifiedShow Answer

When free markets ration goods with prices,it is both efficient and impersonal.

Correct AnswerverifiedShow Answer

Why are policymakers led to control prices

Correct AnswerverifiedShow Answer

A price ceiling is a legal minimum on the price of a good or service.

Correct AnswerverifiedFalse

Market demand is given as QD = 75 - 2P.Market supply is given as QS = 3P.Which legally imposed price would constitute a binding price floor

Correct AnswerverifiedShow Answer

Figure 6-4 -Refer to Figure 6-4.With a price ceiling present in this market,what will happen when the supply curve for gasoline shifts from S₁ to S₂

Correct AnswerverifiedShow Answer

Figure 6-11 -Refer to Figure 6-11.In which market will the majority of a tax be paid by the seller

Correct AnswerverifiedShow Answer

Market demand is given as QD = 100 - P.Market supply is given as QS = 4P.Which legally imposed price would constitute a binding price ceiling

Correct AnswerverifiedShow Answer

In the housing market,what effect do rent controls have on quantity supplied and quantity demanded

Correct AnswerverifiedB

When binding price ceilings are imposed in a market,what happens

Correct AnswerverifiedShow Answer

Which statement best describes a price floor

Correct AnswerverifiedShow Answer

Market demand is given as QD = 150 - 3P.Market supply is given as QS = 2P + 50.Which legally imposed price would constitute a binding price floor

Correct AnswerverifiedD

Who pays the majority of a tax levied on a product depends on whether the tax is placed on the buyer or the seller.

Correct AnswerverifiedShow Answer

Upon whom does a minimum wage have its greatest impact

Correct AnswerverifiedShow Answer

When will buyers of a product pay the majority of a tax placed on a product

Correct AnswerverifiedShow Answer

Market demand is given as QD = 280 - 4P.Market supply is given as QS = 2P + 40.Which legally imposed price would constitute a binding price ceiling

Correct AnswerverifiedShow Answer

What do economists generally regard rent control to be

Correct AnswerverifiedShow Answer

Figure 6-8 -Refer to Figure 6-8.What is the price buyers will pay after the tax is imposed

Correct AnswerverifiedShow Answer

Rent control may lead to lower rents for those who find housing,but the quality of the housing may also be lower.

Correct AnswerverifiedShow Answer

What do advocates of the minimum wage believe,in general

Correct AnswerverifiedShow Answer

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False

Market demand is given as Q_D= 75 - 2P.Market supply is given as Q_S= 3P.Which legally imposed price would constitute a binding price floor

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Market demand is given as Q_D= 100 - P.Market supply is given as Q_S= 4P.Which legally imposed price would constitute a binding price ceiling

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B

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Market demand is given as Q_D= 150 - 3P.Market supply is given as Q_S= 2P + 50.Which legally imposed price would constitute a binding price floor

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D

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Market demand is given as Q_D= 280 - 4P.Market supply is given as Q_S= 2P + 40.Which legally imposed price would constitute a binding price ceiling

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