Question 1

Table 6-3
The following table contains the demand schedule and supply schedule for a market for a particular good.Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market.
 
-Refer to Table 6-3.How many units of the good are sold after the imposition of the price floor?

Accepted Answer

A)   5
B)   9
C)   10
D)   15

Question 2

Workers,rather than firms,bear most of the burden of the payroll tax.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

A price floor is binding when it is set

Accepted Answer

A)   above the equilibrium price,causing a shortage.
B)   above the equilibrium price,causing a surplus.
C)   below the equilibrium price,causing a shortage.
D)   below the equilibrium price,causing a surplus.

Question 5

The demand for salt is inelastic and the supply of salt is elastic.The demand for caviar is elastic and the supply of caviar is inelastic.Suppose that a tax of $1 per pound is levied on the sellers of salt and a tax of $1 per pound is levied on the buyers of caviar.We would expect that most of the burden of these taxes will fall on

Accepted Answer

A)   sellers of salt and the buyers of caviar.
B)   sellers of salt and the sellers of caviar.
C)   buyers of salt and the sellers of caviar.
D)   buyers of salt and the buyers of caviar.

Question 6

A tax on the buyers of coffee will

Accepted Answer

A)   increase the price of coffee paid by buyers,decrease the effective price of coffee received by sellers,and decrease the equilibrium quantity of coffee.
B)   increase the price of coffee paid by buyers,decrease the effective price of coffee received by sellers,and increase the equilibrium quantity of coffee.
C)   increase the price of coffee paid by buyers,increase the effective price of coffee received by sellers,and decrease the equilibrium quantity of coffee.
D)   increase the price of coffee paid by buyers,increase the effective price of coffee received by sellers,and increase the equilibrium quantity of coffee.

Question 7

The imposition of a binding price ceiling on a market causes quantity demanded to be

Accepted Answer

A)   greater than quantity supplied.
B)   less than quantity supplied.
C)   equal to quantity supplied.
D)   Both (a) and (b) are possible.

Question 8

Figure 6-9 
-Refer to Figure 6-9.How much tax revenue does this tax generate for the government?

Accepted Answer

A)   $150
B)   $180
C)   $250
D)   $300

Question 9

Figure 6-15 
-Refer to Figure 6-15.Suppose a tax of $5 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

Accepted Answer

A)   $5
B)   between $5 and $10
C)   between $10 and $14
D)   $14

Question 10

Figure 6-8 1 to S2, A)  the market price will increase to P3. B)  a surplus will occur at the new market price of P2. C)  the market price will stay at P1. D)  a shortage will occur at the new market price of P2." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 6-8.When the price ceiling applies in this market and the supply curve for gasoline shifts from S1 to S2,

Accepted Answer

A)   the market price will increase to P3.
B)   a surplus will occur at the new market price of P2.
C)   the market price will stay at P1.
D)   a shortage will occur at the new market price of P2.

Question 11

Which of the following is correct?

Accepted Answer

A)   Price controls always help those they are designed to help.
B)   Price controls never help those they are designed to help.
C)   Price controls often hurt those they are designed to help.
D)   Price controls always hurt those they are designed to help.

Question 12

Figure 6-9 
-Refer to Figure 6-9.As the figure is drawn,who sends the tax payment to the government?

Accepted Answer

A)   the buyers
B)   the sellers
C)   A portion of the tax payment is sent by the buyers and the remaining portion is sent by the sellers.
D)   The question of who sends the tax payment cannot be determined from the figure.

Question 13

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

Accepted Answer

A)   increase and the price received by sellers will increase.
B)   increase and the price received by sellers will not change.
C)   not change and the price received by sellers will increase.
D)   not change and the price received by sellers will not change.

Question 14

Under rent control,bribery is a mechanism to

Accepted Answer

A)   bring the total price of an apartment (including the bribe) closer to the equilibrium price.
B)   allocate housing to the poorest individuals in the market.
C)   force the total price of an apartment (including the bribe) to be less than the market price.
D)   allocate housing to the most deserving tenants.

Question 15

Figure 6-9 
-Refer to Figure 6-9.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.

Question 16

If the government levies a $500 tax per car on buyers of cars,then the price received by sellers of cars would

Accepted Answer

A)   decrease by more than $500.
B)   decrease by exactly $500.
C)   decrease by less than $500.
D)   increase by an indeterminate amount.

Question 17

Figure 6-6 
-Refer to Figure 6-6.Which of the following statements is correct?

Accepted Answer

A)   A price ceiling set at $4 will be binding and will result in a shortage of 3 units.
B)   A price ceiling set at $4 will be binding and will result in a shortage of 6 units.
C)   A price ceiling set at $7 will be binding and will result in a surplus of 6 units.
D)   A price ceiling set at $7 will be binding and will result in a surplus of 12 units.

Question 18

The federal government uses the revenue from the FICA (Federal Insurance Contribution Act) tax to pay for

Accepted Answer

A)   unemployment compensation.
B)   the salaries of members of Congress.
C)   Social Security and Medicare.
D)   housing subsidies for low-income people.

Question 19

When a tax is placed on the buyers of lemonade,

Accepted Answer

A)   the sellers bear the entire burden of the tax.
B)   the buyers bear the entire burden of the tax.
C)   the burden of the tax will be always be equally divided between the buyers and the sellers.
D)   the burden of the tax will be shared by the buyers and the sellers,but the division of the burden is not always equal.

Question 20

Figure 6-13
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-13.The per-unit burden of the tax on sellers is

Accepted Answer

A)   $6.
B)   $8.
C)   $10.
D)   $14.

Exam 6: Supply, Demand, and Government Policies

Under rent control,bribery is a mechanism to

Correct Answer
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Figure 6-6 -Refer to Figure 6-6.Which of the following statements is correct?

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Which of the following is correct?

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

Correct Answer
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Figure 6-9 -Refer to Figure 6-9.As the figure is drawn,who sends the tax payment to the government?

Correct Answer
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Figure 6-9 -Refer to Figure 6-9.How much tax revenue does this tax generate for the government?

Correct Answer
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If the government levies a $500 tax per car on buyers of cars,then the price received by sellers of cars would

Correct Answer
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The imposition of a binding price ceiling on a market causes quantity demanded to be

Correct Answer
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Figure 6-9 -Refer to Figure 6-9.The burden of the tax on buyers is

Correct Answer
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When a tax is placed on the buyers of lemonade,

Correct Answer
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Figure 6-13 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-13.The per-unit burden of the tax on sellers is

Correct Answer
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Figure 6-8 -Refer to Figure 6-8.When the price ceiling applies in this market and the supply curve for gasoline shifts from S₁ to S₂,

Correct Answer
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Workers,rather than firms,bear most of the burden of the payroll tax.

Correct Answer
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A tax on the buyers of coffee will

Correct Answer
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Figure 6-15 -Refer to Figure 6-15.Suppose a tax of $5 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

Correct Answer
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A price floor is binding when it is set

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

Correct Answer
verified

The federal government uses the revenue from the FICA (Federal Insurance Contribution Act) tax to pay for

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

Under rent control,bribery is a mechanism to

Correct AnswerverifiedShow Answer

Figure 6-6 -Refer to Figure 6-6.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Which of the following is correct?

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

Correct AnswerverifiedShow Answer

Figure 6-9 -Refer to Figure 6-9.As the figure is drawn,who sends the tax payment to the government?

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Figure 6-9 -Refer to Figure 6-9.How much tax revenue does this tax generate for the government?

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If the government levies a $500 tax per car on buyers of cars,then the price received by sellers of cars would

Correct AnswerverifiedShow Answer

The imposition of a binding price ceiling on a market causes quantity demanded to be

Correct AnswerverifiedShow Answer

Figure 6-9 -Refer to Figure 6-9.The burden of the tax on buyers is

Correct AnswerverifiedShow Answer

When a tax is placed on the buyers of lemonade,

Correct AnswerverifiedShow Answer

Figure 6-13 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-13.The per-unit burden of the tax on sellers is

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Figure 6-8 -Refer to Figure 6-8.When the price ceiling applies in this market and the supply curve for gasoline shifts from S1 to S2,

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Workers,rather than firms,bear most of the burden of the payroll tax.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A tax on the buyers of coffee will

Correct AnswerverifiedShow Answer

Figure 6-15 -Refer to Figure 6-15.Suppose a tax of $5 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

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A price floor is binding when it is set

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The federal government uses the revenue from the FICA (Federal Insurance Contribution Act) tax to pay for

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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Figure 6-8 -Refer to Figure 6-8.When the price ceiling applies in this market and the supply curve for gasoline shifts from S₁ to S₂,

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