Question 1

The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor proposes to collect half the tax from workers and half the tax from firms. The mayor will be able to successfully divide the burden of the tax equally if the

Accepted Answer

A)  demand for labor is more elastic than the supply of labor.
B)  supply of labor is more elastic than the demand for labor.
C)  demand for labor and supply of labor are equally elastic.
D)  It is not possible for the tax burden to fall equally on firms and workers.E) A) and B)
F) A) and D)

Question 2

A price floor set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 3

A binding minimum wage creates unemployment.

Accepted Answer

A) True 
 B)False

Question 4

Figure 6-5 
-Refer to Figure 6-5. If the horizontal line on the graph represents a price floor, then the price floor is

Accepted Answer

A)  binding and creates a shortage of 40 units of the good.
B)  binding and creates a surplus of 50 units of the good.
C)  binding and creates a surplus of 90 units of the good.
D)  not binding but creates a surplus of 40 units of the good.E) None of the above
F) A) and D)

Question 5

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) All of the above

Question 6

Figure 6-12 1 to S2, the resulting quantity of gasoline that is bought and sold is A) less than Q3. B) Q3. C) between Q1 and Q3. D) at least Q1." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is

Accepted Answer

A)  less than Q3.
B)  Q3.
C)  between Q1 and Q3.
D)  at least Q1.E) B) and D)
F) B) and C)

Question 7

If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars, then the price paid by buyers will

Accepted Answer

A)  not change, and the price received by sellers will not change.
B)  not change, and the price received by sellers will decrease.
C)  decrease, and the price received by sellers will not change.
D)  decrease, and the price received by sellers will decrease.E) B) and C)
F) A) and C)

Question 8

If a tax is levied on the buyers of a product, then there will be a(n)

Accepted Answer

A)  upward shift of the demand curve.
B)  downward shift of the demand curve.
C)  movement up and to the left along the demand curve.
D)  movement down and to the right along the demand curve.E) A) and C)
F) B) and C)

Question 9

Table 6-1
   Price  Quantity  Denanded  Quantity  Sugplied $[12120$1102$284$366$448$5210$6012\begin{array} { | c | c | c | } \hline 	ext { Price } & \begin{array} { c } 	ext { Quantity } \	ext { Denanded }\end{array} & \begin{array} { c } 	ext { Quantity } \	ext { Sugplied }\end{array} \\hline \$ [ 12 & 12 & 0 \\hline \$ 1 & 10 & 2 \\hline \$ 2 & 8 & 4 \\hline \$ 3 & 6 & 6 \\hline \$ 4 & 4 & 8 \\hline \$ 5 & 2 & 10 \\hline \$ 6 & 0 & 12 \\hline\end{array} Price $[12$1$2$3$4$5$6​ Quantity  Denanded ​121086420​ Quantity  Sugplied ​024681012​​ 
-Refer to Table 6-1. Suppose the government imposes a price ceiling of $1 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 units E) B) and C)
F) A) and B)

Question 10

Figure 6-18 
-Refer to Figure 6-18. The price paid by buyers after the tax is imposed is

Accepted Answer

A)  $2.50.
B)  $3.50.
C)  $5.00.
D)  $6.00.E) B) and C)
F) A) and C)

Question 11

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

Question 12

Figure 6-7 
-Refer to Figure 6-7. For a price ceiling to be binding in this market, it would have to be set at

Accepted Answer

A)  any price below $6.
B)  a price between $3 and $6.
C)  a price between $6 and $9.
D)  any price above $6.E) A) and D)
F) None of the above

Question 13

Buyers and sellers rarely share the burden of a tax equally.

Accepted Answer

A) True 
 B)False

Question 14

A tax imposed on the sellers of a good will raise 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) B) and D)
F) B) and C)

Question 15

If a tax is levied on the sellers of a product, then there will be a(n)

Accepted Answer

A)  downward shift of the demand curve.
B)  upward shift of the demand curve.
C)  movement up and to the left along the demand curve.
D)  movement down and to the right along the demand curve.E) B) and D)
F) B) and C)

Question 16

When the government imposes a binding price ceiling on a competitive market, a surplus of the good arises, and sellers must ration the scarce goods among the large number of potential buyers.

Accepted Answer

A) True 
 B)False

Question 17

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) A) and B)
F) A) and C)

Question 18

When OPEC raised the price of crude oil in the 1970s, it caused the

Accepted Answer

A)  supply of gasoline to decrease.
B)  quantity of gasoline demanded to decrease.
C)  equilibrium price of gasoline to increase.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 19

Workers with high skills and much experience are not typically affected by the minimum wage.

Accepted Answer

A) True 
 B)False

Question 20

The price received by sellers in a market will decrease if the government

Accepted Answer

A)  imposes a binding price floor in that market.
B)  decreases a binding price ceiling in that market.
C)  decreases a tax on the good sold in that market.
D)  increases a binding price floor in that market.E) None of the above
F) A) and C)

Exam 6: Supply, Demand, and Government Policies

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
verified

Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S₁ to S₂, the resulting quantity of gasoline that is bought and sold is

Correct Answer
verified

The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor proposes to collect half the tax from workers and half the tax from firms. The mayor will be able to successfully divide the burden of the tax equally if the

Correct Answer
verified

If a tax is levied on the buyers of a product, then there will be a(n)

Correct Answer
verified

The goal of rent control is to

Correct Answer
verified

When the government imposes a binding price ceiling on a competitive market, a surplus of the good arises, and sellers must ration the scarce goods among the large number of potential buyers.

Correct Answer
verified

Figure 6-7 -Refer to Figure 6-7. For a price ceiling to be binding in this market, it would have to be set at

Correct Answer
verified

Correct Answer
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Figure 6-5 -Refer to Figure 6-5. If the horizontal line on the graph represents a price floor, then the price floor is

Correct Answer
verified

Figure 6-18 -Refer to Figure 6-18. The price paid by buyers after the tax is imposed is

Correct Answer
verified

If a tax is levied on the sellers of a product, then there will be a(n)

Correct Answer
verified

A price floor set above the equilibrium price is not binding.

Correct Answer
verified

A tax imposed on the sellers of a good will raise the

Correct Answer
verified

The price received by sellers in a market will decrease if the government

Correct Answer
verified

Workers with high skills and much experience are not typically affected by the minimum wage.

Correct Answer
verified

After a binding price floor becomes effective, a

Correct Answer
verified

When OPEC raised the price of crude oil in the 1970s, it caused the

Correct Answer
verified

Buyers and sellers rarely share the burden of a tax equally.

Correct Answer
verified

A binding minimum wage creates unemployment.

Correct Answer
verified

If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars, then the price paid by buyers will

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

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

Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is

Correct AnswerverifiedShow Answer

The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor proposes to collect half the tax from workers and half the tax from firms. The mayor will be able to successfully divide the burden of the tax equally if the

Correct AnswerverifiedShow Answer

If a tax is levied on the buyers of a product, then there will be a(n)

Correct AnswerverifiedShow Answer

The goal of rent control is to

Correct AnswerverifiedShow Answer

When the government imposes a binding price ceiling on a competitive market, a surplus of the good arises, and sellers must ration the scarce goods among the large number of potential buyers.

Correct AnswerverifiedShow Answer

Figure 6-7 -Refer to Figure 6-7. For a price ceiling to be binding in this market, it would have to be set at

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 6-5 -Refer to Figure 6-5. If the horizontal line on the graph represents a price floor, then the price floor is

Correct AnswerverifiedShow Answer

Figure 6-18 -Refer to Figure 6-18. The price paid by buyers after the tax is imposed is

Correct AnswerverifiedShow Answer

If a tax is levied on the sellers of a product, then there will be a(n)

Correct AnswerverifiedShow Answer

A price floor set above the equilibrium price is not binding.

Correct AnswerverifiedShow Answer

A tax imposed on the sellers of a good will raise the

Correct AnswerverifiedShow Answer

The price received by sellers in a market will decrease if the government

Correct AnswerverifiedShow Answer

Workers with high skills and much experience are not typically affected by the minimum wage.

Correct AnswerverifiedShow Answer

After a binding price floor becomes effective, a

Correct AnswerverifiedShow Answer

When OPEC raised the price of crude oil in the 1970s, it caused the

Correct AnswerverifiedShow Answer

Buyers and sellers rarely share the burden of a tax equally.

Correct AnswerverifiedShow Answer

A binding minimum wage creates unemployment.

Correct AnswerverifiedShow Answer

If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars, then the price paid by buyers will

Correct AnswerverifiedShow Answer

Correct Answer
verified

Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S₁ to S₂, the resulting quantity of gasoline that is bought and sold is

Correct Answer
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