Question 1

The price paid by buyers in a market will decrease if the government

Accepted Answer

A)   increases a binding price floor in that market.
B)   increases a binding price ceiling in that market.
C)   decreases a tax on the good sold in that market.
D)   All of the above are correct.

Question 2

Minimum-wage laws dictate the

Accepted Answer

A)   average price employers must pay for labor.
B)   highest price employers may pay for labor.
C)   lowest price employers may pay for labor.
D)   the highest and lowest prices employers may pay for labor.

Question 3

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

Accepted Answer

A)   A price ceiling set at $8 would be binding, but a price ceiling set at $12 would not be binding.
B)   A price floor set at $14 would be binding, but a price floor set at $8 would not be binding.
C)   A price ceiling set at $9 would result in a surplus.
D)   A price floor set at $11 would result in a surplus.

Question 4

When a tax is imposed on a good,the result is always a shortage of the good.

Accepted Answer

A) True 
 B)False

Question 5

To say that a price floor is binding is to say that the price floor

Accepted Answer

A)   results in a shortage.
B)   is set below the equilibrium price.
C)   causes quantity supplied to exceed quantity demanded.
D)   All of the above are correct.

Question 6

If a price floor is not binding,then

Accepted Answer

A)   the equilibrium price is above the price floor.
B)   the equilibrium price is below the price floor.
C)   there will be a surplus in the market.
D)   Both a)  and c)  are correct.

Question 7

A tax imposed on the sellers of a good will lower 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.

Question 8

Figure 6-27
 
-Refer to Figure 6-27.If the government places a $2 tax in the market,the buyer bears $1 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 9

When a payroll tax is enacted,the wage received by workers

Accepted Answer

A)   falls, and the wage paid by firms rises.
B)   falls, and the wage paid by firms falls.
C)   rises, and the wage paid by firms falls.
D)   rises, and the wage paid by firms rises.

Question 10

Price controls

Accepted Answer

A)   always produce a fair outcome.
B)   always produce an efficient outcome.
C)   can generate inequities of their own.
D)   All of the above are correct.

Question 11

A tax on buyers will shift the

Accepted Answer

A)   demand curve upward by the amount of the tax.
B)   demand curve downward by the amount of the tax.
C)   supply curve upward by the amount of the tax.
D)   supply curve downward by the amount of the tax.

Question 12

Minimum-wage laws benefit society by creating a surplus of labor.

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-27
 
-Refer to Figure 6-27.If the government places a $2 tax in the market,the seller receives $4.

Accepted Answer

A) True 
 B)False

Question 14

If the government wants to reduce the burning of fossil fuels,it should impose a tax on

Accepted Answer

A)   buyers of gasoline.
B)   sellers of gasoline.
C)   either buyers or sellers of gasoline.
D)   whichever side of the market is less elastic.

Question 15

Price floors are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 16

Rent control policies tend to cause

Accepted Answer

A)   relatively smaller shortages in the short run than in the long run because supply and demand tend to be more elastic in the short run than in the long run.
B)   relatively larger shortages in the short run than in the long run because supply and demand tend to be more elastic in the short run than in the long run.
C)   relatively larger shortages in the short run than in the long run because supply and demand tend to be more inelastic in the short run than in the long run.
D)   relatively smaller shortages in the short run than in the long run because supply and demand tend to be more inelastic in the short run than in the long run.

Question 17

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 18

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

Accepted Answer

A)   decreases a binding price floor in that market.
B)   increases a binding price ceiling in that market.
C)   increases a tax on the good sold in that market.
D)   imposes a binding price ceiling in that market.

Question 19

Figure 6-1

-Refer to Figure 6-1.A binding price ceiling is shown in

Accepted Answer

A)   panel (a)  only.
B)   panel (b)  only.
C)   both panel (a)  and panel (b) .
D)   neither panel (a)  nor panel (b) .

Question 20

One common example of a price floor is the minimum wage.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, And Government Policies.

When a payroll tax is enacted,the wage received by workers

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To say that a price floor is binding is to say that the price floor

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Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the seller receives $4.

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Price controls

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The price paid by buyers in a market will decrease if the government

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Minimum-wage laws benefit society by creating a surplus of labor.

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

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Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the buyer bears $1 of the tax burden.

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

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

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

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If a price floor is not binding,then

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A tax on buyers will shift the

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If the government wants to reduce the burning of fossil fuels,it should impose a tax on

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One common example of a price floor is the minimum wage.

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Price floors are typically imposed to benefit sellers.

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Minimum-wage laws dictate the

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Rent control policies tend to cause

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Figure 6-1 -Refer to Figure 6-1.A binding price ceiling is shown in

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When a tax is imposed on a good,the result is always a shortage of the good.

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