Question 1

Figure 6-27
This figure shows the market demand and market supply curves for good Z. 
-Refer to Figure 6-27. Suppose a tax of $3 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Accepted Answer

A)   less than 8 units
B)   8 units
C)   between 8 units and 10 units
D)   greater than 10 unitsE) A) and D)
F) B) and C)

Question 2

Suppose that a tax is placed on books. If the sellers pay the majority of the tax, then we know that the

Accepted Answer

A)   demand is more inelastic than the supply.
B)   supply is more inelastic than the demand.
C)   government has required that buyers remit the tax payments.
D)   government has required that sellers remit the tax payments.E) C) and D)
F) B) and D)

Question 3

Figure 6-15 
-Refer to Figure 6-15. For a price floor to be binding in this market, it would have to be set at

Accepted Answer

A)   any price below $3.
B)   a price between $2 and $3.
C)   a price between $3 and $4.
D)   any price above $3.E) A) and B)
F) B) and C)

Question 4

Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

Accepted Answer

A)   with rent control, the government guarantees landlords a minimum level of profit.
B)   they become resigned to the fact that many of their apartments are going to be vacant at any given time.
C)   with shortages and waiting lists, they have no incentive to maintain and improve their property.
D)   with rent control, it becomes the government's responsibility to maintain rental housing.E) A) and B)
F) A) and C)

Question 5

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

Accepted Answer

A)   increase the effective price of coffee received by sellers, and increase the equilibrium quantity of coffee.
B)   increase the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.
C)   decrease the effective price of coffee received by sellers, and increase the equilibrium quantity of coffee.
D)   decrease the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.E) All of the above
F) A) and B)

Question 6

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 7

Using the graph shown, answer the following questions.
a. What was the equilibrium price in this market before the tax?
b. What is the amount of the tax?
c. How much of the tax will the buyers pay?
d. How much of the tax will the sellers pay?
e. How much will the buyer pay for the product after the tax is imposed?
f. How much will the seller receive after the tax is imposed?
g. As a result of the tax, what has happened to the level of market activity?

Accepted Answer

a. $6
b. $4
c. $1
d. $3
e. $7
...

Question 8

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Accepted Answer

A)   price will no longer be the mechanism that rations scarce resources.
B)   long lines of buyers may develop.
C)   sellers could ration the good or service according to their own personal biases.
D)   All of the above are correct.E) A) and C)
F) A) and B)

Question 9

Figure 6-20 
-Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Accepted Answer

A)   less than 25 units
B)   25 units
C)   between 25 units and 50 units
D)   greater than 50 unitsE) None of the above
F) All of the above

Question 10

When a tax is levied on buyers of tea,

Accepted Answer

A)   buyers of tea and sellers of tea both are made worse off.
B)   buyers of tea are made worse off, and the well-being of sellers is unaffected.
C)   buyers of tea are made worse off, and sellers of tea are made better off.
D)   the well-being of both buyers of tea and sellers of tea is unaffected.E) All of the above
F) None of the above

Question 11

Figure 6-11 
-Refer to Figure 6-11. Which of the following statements is not correct?

Accepted Answer

A)   A government-imposed price of $8 would be a binding price floor if market demand is Demand A and a binding price ceiling if market demand is Demand B.
B)   A government-imposed price of $10 would be a binding price ceiling if market demand is either Demand A or Demand B.
C)   A government-imposed price of $4 would be a binding price ceiling if market demand is either Demand A or Demand B.
D)   A government-imposed price of $10 would be a binding price floor if market demand is Demand A and a non-binding price ceiling if market demand is Demand B.E) A) and B)
F) All of the above

Question 12

Figure 6-30
Panel a)  Panel b) 
   Panel c)  
-Refer to Figure 6-30. In which market will the majority of the tax burden fall on sellers?

Accepted Answer

A)   the market shown in panel a) .
B)   the market shown in panel b) .
C)   the market shown in panel c) .
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 13

Figure 6-30
Panel a)  Panel b) 
   Panel c)  
-Refer to Figure 6-30. In which market will the majority of the tax burden fall on buyers?

Accepted Answer

A)   the market shown in panel a) .
B)   the market shown in panel b) .
C)   the market shown in panel c) .
D)   All of the above are correct.E) All of the above
F) C) and D)

Question 14

Minimum-wage laws dictate

Accepted Answer

A)   the exact wage that firms must pay workers.
B)   a maximum wage that firms may pay workers.
C)   a minimum wage that firms may pay workers.
D)   both a minimum wage and a maximum wage that firms may pay workers.E) A) and B)
F) B) and C)

Question 15

You receive a paycheck from your employer, and your pay stub indicates that $300 was deducted to pay the FICA Social Security/Medicare)  tax. Which of the following statements is correct?

Accepted Answer

A)   The $300 that you paid is not necessarily the true burden of the tax that falls on you, the employee.
B)   Your employer is required by law to pay $300 to match the $300 deducted from your check.
C)   This type of tax is an example of a payroll tax.
D)   All of the above are correct.E) None of the above
F) B) and C)

Question 16

Figure 6-26 
-Refer to Figure 6-26. The amount of the tax per unit is

Accepted Answer

A)   $4.
B)   $8.
C)   $14.
D)   $10.E) C) and D)
F) None of the above

Question 17

Figure 6-29
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-29. The buyers and sellers will bear an equal 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) A) and D)
F) B) and C)

Question 18

Figure 6-2 
-Refer to Figure 6-2. The price ceiling

Accepted Answer

A)   causes a shortage of 45 units of the good.
B)   makes it necessary for sellers to ration the good.
C)   is not binding because it is set below the equilibrium price.
D)   causes a shortage of 40 units of the good.E) A) and D)
F) B) and D)

Question 19

When a free market for a good reaches equilibrium, anyone who is willing and able to pay the market price can buy the good.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not an example of a public policy?

Accepted Answer

A)   rent-control laws
B)   minimum-wage laws
C)   taxes
D)   equilibrium lawsE) A) and B)
F) B) and C)

Exam 6: Supply, Demand, and Government Policies

When a tax is levied on buyers of tea,

Correct Answer
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Which of the following is not an example of a public policy?

Correct Answer
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Figure 6-30 Panel a) Panel b) Panel c) -Refer to Figure 6-30. In which market will the majority of the tax burden fall on sellers?

Correct Answer
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Correct Answer
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a. $6
b. $4
c. $1
d. $3
e. $7
...
View Answer

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

Correct Answer
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A tax on the sellers of coffee will increase the price of coffee paid by buyers,

Correct Answer
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You receive a paycheck from your employer, and your pay stub indicates that $300 was deducted to pay the FICA Social Security/Medicare) tax. Which of the following statements is correct?

Correct Answer
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Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $3 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Correct Answer
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Figure 6-30 Panel a) Panel b) Panel c) -Refer to Figure 6-30. In which market will the majority of the tax burden fall on buyers?

Correct Answer
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Figure 6-2 -Refer to Figure 6-2. The price ceiling

Correct Answer
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Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

Correct Answer
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Figure 6-26 -Refer to Figure 6-26. The amount of the tax per unit is

Correct Answer
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Figure 6-29 Suppose the government imposes a $2 on this market. -Refer to Figure 6-29. The buyers and sellers will bear an equal share of the tax burden if the demand is

Correct Answer
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Suppose that a tax is placed on books. If the sellers pay the majority of the tax, then we know that the

Correct Answer
verified

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Correct Answer
verified

When a free market for a good reaches equilibrium, anyone who is willing and able to pay the market price can buy the good.

Correct Answer
verified

Figure 6-15 -Refer to Figure 6-15. For a price floor to be binding in this market, it would have to be set at

Correct Answer
verified

Figure 6-20 -Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Correct Answer
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Figure 6-11 -Refer to Figure 6-11. Which of the following statements is not correct?

Correct Answer
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Minimum-wage laws dictate

Correct Answer
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Exam 6: Supply, Demand, and Government Policies

When a tax is levied on buyers of tea,

Correct AnswerverifiedShow Answer

Which of the following is not an example of a public policy?

Correct AnswerverifiedShow Answer

Figure 6-30 Panel a) Panel b) Panel c) -Refer to Figure 6-30. In which market will the majority of the tax burden fall on sellers?

Correct AnswerverifiedShow Answer

Correct Answerverifieda. $6b. $4c. $1d. $3e. $7...View AnswerShow 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

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

Correct AnswerverifiedShow Answer

You receive a paycheck from your employer, and your pay stub indicates that $300 was deducted to pay the FICA Social Security/Medicare) tax. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $3 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Correct AnswerverifiedShow Answer

Figure 6-30 Panel a) Panel b) Panel c) -Refer to Figure 6-30. In which market will the majority of the tax burden fall on buyers?

Correct AnswerverifiedShow Answer

Figure 6-2 -Refer to Figure 6-2. The price ceiling

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Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

Correct AnswerverifiedShow Answer

Figure 6-26 -Refer to Figure 6-26. The amount of the tax per unit is

Correct AnswerverifiedShow Answer

Figure 6-29 Suppose the government imposes a $2 on this market. -Refer to Figure 6-29. The buyers and sellers will bear an equal share of the tax burden if the demand is

Correct AnswerverifiedShow Answer

Suppose that a tax is placed on books. If the sellers pay the majority of the tax, then we know that the

Correct AnswerverifiedShow Answer

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Correct AnswerverifiedShow Answer

When a free market for a good reaches equilibrium, anyone who is willing and able to pay the market price can buy the good.

Correct AnswerverifiedShow Answer

Figure 6-15 -Refer to Figure 6-15. For a price floor to be binding in this market, it would have to be set at

Correct AnswerverifiedShow Answer

Figure 6-20 -Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Correct AnswerverifiedShow Answer

Figure 6-11 -Refer to Figure 6-11. Which of the following statements is not correct?

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Minimum-wage laws dictate

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a. $6
b. $4
c. $1
d. $3
e. $7
...
View Answer

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