Question 1

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Accepted Answer

A)  a binding price floor
B)  a binding price ceiling
C)  a tax on the good
D)  All of the above are correct.E) B) and D)
F) C) and D)

Question 2

A large majority of economists favor eliminating the minimum wage.

Accepted Answer

A) True 
 B)False

Question 3

Figure 6-24 
-Refer to Figure 6-24. Andrew is a buyer of the good. Taking the tax into account, how much does Andrew effectively pay to acquire one unit of the good?

Accepted Answer

A)  $16
B)  $18
C)  $24
D)  $26E) None of the above
F) All of the above

Question 4

Figure 6-31 
-Refer to Figure 6-31. If the government set a price floor at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 5

A tax on buyers increases the size of a market.

Accepted Answer

A) True 
 B)False

Question 6

Suppose the government imposes a 30-cent tax on the sellers of soft drinks. Which of the following is not correct? The tax would

Accepted Answer

A)  shift the supply curve upward by 30 cents.
B)  raise the equilibrium price by 30 cents.
C)  reduce the equilibrium quantity.
D)  discourage market activity.E) A) and D)
F) A) and C) B

Question 7

Table 6-2 
-Refer to Table 6-2. A price ceiling set at $5 results in

Accepted Answer

A)  50 units sold.
B)  250 units sold.
C)  300 units sold.
D)  350 units sold.E) B) and D)
F) All of the above

Question 8

If a price ceiling of $2 per gallon is imposed on gasoline, and the market equilibrium price is $1.50, then the price ceiling is a binding constraint on the market.

Accepted Answer

A) True 
 B)False

Question 9

FICA is an example of a payroll tax, which is a tax on the wages that firms pay their workers.

Accepted Answer

A) True 
 B)False

Question 10

When policymakers set prices by legal decree, they

Accepted Answer

A)  are usually following the advice of mainstream economists.
B)  improve the organization of economic activity.
C)  obscure the signals that normally guide the allocation of society's resources.
D)  are demonstrating a willingness to sacrifice fairness for the sake of a gain in efficiency.E) A) and B)
F) A) and C)

Question 11

Figure 6-15 
-Refer to Figure 6-15. Suppose a price ceiling of $2 is imposed on this market. As a result,

Accepted Answer

A)  the quantity of the good supplied decreases by 30 units.
B)  the demand curve shifts to the left so as to now pass through the point (quantity = 30, price = $2) .
C)  buyers' total expenditure on the good decreases by $75.
D)  buyers' total expenditure on the good falls by $15.E) B) and C)
F) C) and D)

Question 12

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

Question 13

You have responsibility for economic policy in the country of Freedonia. Recently, the neighboring country of Sylvania has cut off all exports of oranges to Freedonia. George, who is one of your advisors, says that the best way to avoid a shortage of oranges is to take no action at all. Charles, another one of your advisors, argues that without a binding price floor, a shortage will certainly develop. Otto, a third advisor, suggests that you should impose a binding price ceiling in order to avoid a shortage of oranges. Which of your three advisors is most likely to have studied economics?

Accepted Answer

A)  George
B)  Charles
C)  Otto
D)  Apparently, all three advisors have studied economics, but their views on positive economics are different.E) None of the above
F) A) and B) A

Question 14

A tax on the buyers of personal computer external hard drives encourages

Accepted Answer

A)  sellers to supply a smaller quantity at every price.
B)  buyers to demand a smaller quantity at every price.
C)  buyers to demand a larger quantity at every price.
D)  Both a)  and b)  are correct.E) A) and C)
F) C) and D)

Question 15

​Whether the minimum wage is a binding price floor always depends upon whether the economy is in a recession.

Accepted Answer

A) True 
 B)False

Question 16

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) B) and D)

Question 17

Who bears the majority of a tax burden depends on whether the tax is placed on the buyers or the sellers.

Accepted Answer

A) True 
 B)False

Question 18

Figure 6-25 
-Refer to Figure 6-25. The burden of the tax on buyers is

Accepted Answer

A)  $1 per unit.
B)  $1.50 per unit.
C)  $2 per unit.
D)  $3 per unit.E) A) and B)
F) C) and D) C

Question 19

Advocates of the minimum wage

Accepted Answer

A)  deny that the minimum wage produces any adverse effects.
B)  emphasize the benefits to teenagers of increases in the minimum wage.
C)  emphasize the low annual incomes of those who work for the minimum wage.
D)  All of the above are correct.E) A) and D)
F) C) and D)

Question 20

Figure 6-32 
-Refer to Figure 6-32. If the government set a price floor at $70, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Exam 6: Supply, Demand, and Government Policies

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Correct Answer
verified

A large majority of economists favor eliminating the minimum wage.

Correct Answer
verified

Figure 6-24 -Refer to Figure 6-24. Andrew is a buyer of the good. Taking the tax into account, how much does Andrew effectively pay to acquire one unit of the good?

Correct Answer
verified

Figure 6-31 -Refer to Figure 6-31. If the government set a price floor at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
A price floor set at...
View Answer

A tax on buyers increases the size of a market.

Correct Answer
verified

Suppose the government imposes a 30-cent tax on the sellers of soft drinks. Which of the following is not correct? The tax would

Correct Answer
verified
B

Table 6-2 -Refer to Table 6-2. A price ceiling set at $5 results in

Correct Answer
verified

If a price ceiling of $2 per gallon is imposed on gasoline, and the market equilibrium price is $1.50, then the price ceiling is a binding constraint on the market.

Correct Answer
verified

FICA is an example of a payroll tax, which is a tax on the wages that firms pay their workers.

Correct Answer
verified

When policymakers set prices by legal decree, they

Correct Answer
verified

Figure 6-15 -Refer to Figure 6-15. Suppose a price ceiling of $2 is imposed on this market. As a result,

Correct Answer
verified

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
verified

Correct Answer
verified
A

A tax on the buyers of personal computer external hard drives encourages

Correct Answer
verified

Whether the minimum wage is a binding price floor always depends upon whether the economy is in a recession.

Correct Answer
verified

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
verified

Who bears the majority of a tax burden depends on whether the tax is placed on the buyers or the sellers.

Correct Answer
verified

Figure 6-25 -Refer to Figure 6-25. The burden of the tax on buyers is

Correct Answer
verified
C

Advocates of the minimum wage

Correct Answer
verified

Figure 6-32 -Refer to Figure 6-32. If the government set a price floor at $70, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
A price floor set at...
View Answer

Exam 6: Supply, Demand, and Government Policies

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Correct AnswerverifiedShow Answer

A large majority of economists favor eliminating the minimum wage.

Correct AnswerverifiedShow Answer

Figure 6-24 -Refer to Figure 6-24. Andrew is a buyer of the good. Taking the tax into account, how much does Andrew effectively pay to acquire one unit of the good?

Correct AnswerverifiedShow Answer

Figure 6-31 -Refer to Figure 6-31. If the government set a price floor at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at...View AnswerShow Answer

A tax on buyers increases the size of a market.

Correct AnswerverifiedShow Answer

Suppose the government imposes a 30-cent tax on the sellers of soft drinks. Which of the following is not correct? The tax would

Correct AnswerverifiedB

Table 6-2 -Refer to Table 6-2. A price ceiling set at $5 results in

Correct AnswerverifiedShow Answer

If a price ceiling of $2 per gallon is imposed on gasoline, and the market equilibrium price is $1.50, then the price ceiling is a binding constraint on the market.

Correct AnswerverifiedShow Answer

FICA is an example of a payroll tax, which is a tax on the wages that firms pay their workers.

Correct AnswerverifiedShow Answer

When policymakers set prices by legal decree, they

Correct AnswerverifiedShow Answer

Figure 6-15 -Refer to Figure 6-15. Suppose a price ceiling of $2 is imposed on this market. As a result,

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

Correct AnswerverifiedA

A tax on the buyers of personal computer external hard drives encourages

Correct AnswerverifiedShow Answer

​Whether the minimum wage is a binding price floor always depends upon whether the economy is in a recession.

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

Who bears the majority of a tax burden depends on whether the tax is placed on the buyers or the sellers.

Correct AnswerverifiedShow Answer

Figure 6-25 -Refer to Figure 6-25. The burden of the tax on buyers is

Correct AnswerverifiedC

Advocates of the minimum wage

Correct AnswerverifiedShow Answer

Figure 6-32 -Refer to Figure 6-32. If the government set a price floor at $70, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at...View AnswerShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A price floor set at...
View Answer

Correct Answer
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Correct Answer
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B

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A

Correct Answer
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Whether the minimum wage is a binding price floor always depends upon whether the economy is in a recession.

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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C

Correct Answer
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Correct Answer
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A price floor set at...
View Answer