Question 1

All buyers benefit from a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 2

Figure 6-22 
-Refer to Figure 6-22. Buyers pay how much of the tax per unit?

Accepted Answer

A)  $0.50.
B)  $1.50.
C)  $3.00.
D)  $5.00.E) B) and D)
F) A) and C)

Question 3

If a binding price floor is imposed on the video game market, then

Accepted Answer

A)  the quantity of video games demanded will decrease.
B)  the quantity of video games supplied will increase.
C)  a surplus of video games will develop.
D)  All of the above are correct.E) None of the above
F) All of the above

Question 4

There are several criticisms of the minimum wage. Which of the following is not one of those criticisms? The minimum wage

Accepted Answer

A)  often hurts those people who it is intended to help.
B)  results in an excess supply of low-skilled labor.
C)  prevents some unskilled workers from getting needed on-the-job training.
D)  fails to raise the wage of any employed person.E) A) and D)
F) A) and C)

Question 5

Figure 6-21 
-Refer to Figure 6-21. What is the amount of the tax per unit?

Accepted Answer

A)  $1
B)  $2
C)  $3
D)  $4E) None of the above
F) B) and C)

Question 6

A binding price floor will reduce a firm's total revenue

Accepted Answer

A)  always.
B)  when demand is elastic.
C)  when demand is inelastic.
D)  never.E) None of the above
F) A) and D)

Question 7

Figure 6-16 
-Refer to Figure 6-16. In this market, a minimum wage of $2.75 is

Accepted Answer

A)  binding and creates a labor shortage.
B)  binding and creates unemployment.
C)  nonbinding and creates a labor shortage.
D)  nonbinding and creates neither a labor shortage nor unemployment.E) A) and B)
F) All of the above

Question 8

Who bears the majority of a tax burden depends on the relative elasticity of supply and demand.

Accepted Answer

A) True 
 B)False

Question 9

A tax on buyers decreases the quantity of the good sold in the market.

Accepted Answer

A) True 
 B)False

Question 10

A binding price ceiling may not help all consumers, but it does not hurt any consumers.

Accepted Answer

A) True 
 B)False

Question 11

When government imposes a price ceiling or a price floor on a market,

Accepted Answer

A)  price no longer serves as a rationing device.
B)  efficiency in the market is enhanced.
C)  shortages and surpluses are eliminated.
D)  both buyers and sellers become better off.E) None of the above
F) A) and B)

Question 12

If the government removes a binding price ceiling from a market, then the price received by sellers will

Accepted Answer

A)  decrease, and the quantity sold in the market will decrease.
B)  decrease, and the quantity sold in the market will increase.
C)  increase, and the quantity sold in the market will decrease.
D)  increase, and the quantity sold in the market will increase.E) B) and D)
F) B) and C)

Question 13

A tax on buyers decreases demand.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-34 
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how many units will be bought and sold in the market after the tax is imposed?

Accepted Answer

With a $6 tax per un...

Question 15

Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

Accepted Answer

A)  frequent rental programs such as "Rent nine times and the tenth rental is free!"
B)  enhanced maintenance programs to promote the high quality of the cars
C)  free gasoline given to people as an incentive to a rent a car
D)  slow replacement of old rental cars with newer onesE) None of the above
F) All of the above

Question 16

A tax levied on the sellers of blueberries

Accepted Answer

A)  increases sellers' costs, reduces profits, and shifts the supply curve up.
B)  increases sellers' costs, reduces profits, and shifts the supply curve down.
C)  decreases sellers' costs, increases profits, and shifts the supply curve up.
D)  decreases sellers' costs, increases profits, and shifts the supply curve down.E) A) and C)
F) A) and B)

Question 17

Figure 6-31 
-Refer to Figure 6-31. If the government set a price floor at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 18

If a tax is levied on the sellers of flour, then

Accepted Answer

A)  buyers will bear the entire burden of the tax.
B)  sellers will bear the entire burden of the tax.
C)  buyers and sellers will share the burden of the tax.
D)  the government will bear the entire burden of the tax.E) All of the above
F) A) and B)

Question 19

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 B)
F) All of the above

Question 20

Rent-control laws dictate

Accepted Answer

A)  the exact rent that landlords must charge tenants.
B)  a maximum rent that landlords may charge tenants.
C)  a minimum rent that landlords may charge tenants.
D)  both a minimum rent and a maximum rent that landlords may charge tenants.E) A) and D)
F) B) and C)

Exam 6: Supply, Demand, and Government Policies

Figure 6-21 -Refer to Figure 6-21. What is the amount of the tax per unit?

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There are several criticisms of the minimum wage. Which of the following is not one of those criticisms? The minimum wage

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Figure 6-22 -Refer to Figure 6-22. Buyers pay how much of the tax per unit?

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All buyers benefit from a binding price ceiling.

Correct AnswerverifiedShow Answer

A tax on buyers decreases the quantity of the good sold in the market.

Correct AnswerverifiedShow Answer

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $2.75 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

A tax levied on the sellers of blueberries

Correct AnswerverifiedShow Answer

Rent-control laws dictate

Correct AnswerverifiedShow Answer

When government imposes a price ceiling or a price floor on a market,

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A tax on buyers decreases demand.

Correct AnswerverifiedShow Answer

A binding price floor will reduce a firm's total revenue

Correct AnswerverifiedShow Answer

Who bears the majority of a tax burden depends on the relative elasticity of supply and demand.

Correct AnswerverifiedShow Answer

If a tax is levied on the sellers of flour, then

Correct AnswerverifiedShow Answer

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how many units will be bought and sold in the market after the tax is imposed?

Correct AnswerverifiedWith a $6 tax per un...View AnswerShow Answer

Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

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A binding price ceiling may not help all consumers, but it does not hurt any consumers.

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Figure 6-31 -Refer to Figure 6-31. If the government set a price floor at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

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

If the government removes a binding price ceiling from a market, then the price received by sellers will

Correct AnswerverifiedShow Answer

If a binding price floor is imposed on the video game market, then

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With a $6 tax per un...
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A price floor set at...
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