Question 1

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

Accepted Answer

There woul...

Question 2

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Accepted Answer

A) True 
 B)False

Question 3

The incidence of a tax falls more heavily on

Accepted Answer

A)  consumers than producers if demand is more inelastic than supply.
B)  producers than consumers if supply is more inelastic than demand.
C)  consumers than producers if supply is more elastic than demand.
D)  All of the above are correct.E) A) and D)
F) All of the above

Question 4

Figure 6-36 
-Refer to Figure 6-36. If the government places a $2 tax in the market, the seller receives $4.

Accepted Answer

A) True 
 B)False

Question 5

Table 6-2 
-Refer to Table 6-2. A price floor set at $5 will

Accepted Answer

A)  be binding and will result in a surplus of 50 units.
B)  be binding and will result in a surplus of 250 units.
C)  be binding and will result in a surplus of 300 units.
D)  not be binding.E) None of the above
F) B) and C)

Question 6

Which of the following statements about the effects of rent control is correct?

Accepted Answer

A)  The short-run effect of rent control is a surplus of apartments, and the long-run effect of rent control is a shortage of apartments.
B)  The short-run effect of rent control is a relatively small shortage of apartments, and the long-run effect of rent control is a larger shortage of apartments.
C)  In the long run, rent control leads to a shortage of apartments and an improvement in the quality of available apartments.
D)  The effects of rent control are very noticeable to the public in the short run because the primary effects of rent control occur very quickly.E) A) and C)
F) A) and B)

Question 7

A $2.00 tax levied on the sellers of birdhouses will shift the supply curve

Accepted Answer

A)  upward by exactly $2.00.
B)  upward by less than $2.00.
C)  downward by exactly $2.00.
D)  downward by less than $2.00.E) All of the above
F) None of the above

Question 8

Most labor economists believe that the supply of labor is much more elastic than the demand.

Accepted Answer

A) True 
 B)False

Question 9

Figure 6-26 
-Refer to Figure 6-26. The price paid by buyers after the tax is imposed is

Accepted Answer

A)  $8.
B)  $16.
C)  $14.
D)  $12.E) All of the above
F) B) and C)

Question 10

The tax incidence depends on whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 11

A binding price floor causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 12

Figure 6-23 
-Refer to Figure 6-23. How much tax revenue does this tax produce for the government?

Accepted Answer

A)  $18.
B)  $30.
C)  $6.
D)  $36.E) All of the above
F) B) and D)

Question 13

Figure 6-11 
-Refer to Figure 6-11. If the government imposes a price ceiling at $6, it would be

Accepted Answer

A)  binding if market demand is Demand A or Demand B.
B)  non-binding if market demand is Demand A or Demand B.
C)  binding if market demand is Demand A and non-binding if market demand is Demand B.
D)  non-binding if market demand is Demand A and binding if market demand is Demand B.E) B) and C)
F) A) and D)

Question 14

Figure 6-32 
-Refer to Figure 6-32. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set ...

Question 15

Figure 6-26 
-Refer to Figure 6-26. The effective price received by sellers after the tax is imposed is

Accepted Answer

A)  $8.
B)  $16.
C)  $14.
D)  $12.E) A) and C)
F) None of the above

Question 16

Table 6-1 
-Refer to Table 6-1. Which of the following price ceilings would be binding in this market?

Accepted Answer

A)  $80
B)  $70
C)  $60
D)  $50E) None of the above
F) All of the above

Question 17

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) All of the above
F) B) and D)

Question 18

Price ceilings and price floors that are binding

Accepted Answer

A)  are desirable because they make markets more efficient and more fair.
B)  cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price.
C)  can have the effect of restoring a market to equilibrium.
D)  are imposed because they can make the poor in the economy better off without causing adverse effects.E) A) and B)
F) A) and C)

Question 19

If a price ceiling is not binding, then

Accepted Answer

A)  the equilibrium price is above the price ceiling.
B)  the equilibrium price is below the price ceiling.
C)  it has no legal enforcement mechanism.
D)  None of the above is correct because all price ceilings must be binding.E) C) and D)
F) A) and C)

Question 20

The quantity sold in a market will increase if the government

Accepted Answer

A)  decreases a binding price floor in that market.
B)  decreases a binding price ceiling in that market.
C)  increases a tax on the good sold in that market.
D)  More than one of the above is correct.E) B) and D)
F) A) and B)

Exam 6: Supply, Demand, and Government Policies

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price ceiling set ...View AnswerShow Answer

A $2.00 tax levied on the sellers of birdhouses will shift the supply curve

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThere woul...View AnswerShow Answer

The quantity sold in a market will increase if the government

Correct AnswerverifiedShow Answer

Which of the following statements about the effects of rent control is correct?

Correct AnswerverifiedShow Answer

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Correct AnswerverifiedShow Answer

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the seller receives $4.

Correct AnswerverifiedShow Answer

Figure 6-26 -Refer to Figure 6-26. The price paid by buyers after the tax is imposed is

Correct AnswerverifiedShow Answer

The incidence of a tax falls more heavily on

Correct AnswerverifiedShow Answer

Figure 6-26 -Refer to Figure 6-26. The effective price received by sellers after the tax is imposed is

Correct AnswerverifiedShow Answer

If a price ceiling is not binding, then

Correct AnswerverifiedShow Answer

Price ceilings and price floors that are binding

Correct AnswerverifiedShow Answer

A binding price floor causes a shortage in the market.

Correct AnswerverifiedShow Answer

Table 6-1 -Refer to Table 6-1. Which of the following price ceilings would be binding in this market?

Correct AnswerverifiedShow Answer

Figure 6-11 -Refer to Figure 6-11. If the government imposes a price ceiling at $6, it would be

Correct AnswerverifiedShow Answer

The tax incidence depends on whether the tax is levied on buyers or sellers.

Correct AnswerverifiedShow Answer

Figure 6-23 -Refer to Figure 6-23. How much tax revenue does this tax produce for the government?

Correct AnswerverifiedShow Answer

Table 6-2 -Refer to Table 6-2. A price floor set at $5 will

Correct AnswerverifiedShow Answer

Most labor economists believe that the supply of labor is much more elastic than the demand.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified
A price ceiling set ...
View Answer

Correct Answer
verified

Correct Answer
verified
There woul...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified