Question 1

A tax on the sellers of coffee will

Accepted Answer

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

Question 2

Table 6-4
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 $3 above the equilibrium price in this market.
 
-Refer to Table 6-4.Following the imposition of a price floor $3 above the equilibrium price,irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor.The resulting shortage is

Accepted Answer

A)   0 units.
B)   4 units.
C)   5 units.
D)   10 units.E) B) and C)
F) C) and D)

Question 3

To be binding,a price floor must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 4

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

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Figure 6-11 
-Refer to Figure 6-11.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.E) B) and D)
F) C) and D)

Question 7

Figure 6-4 
-Refer to Figure 6-4.For a price ceiling to be binding in this market,it would have to be set at

Accepted Answer

A)   any price below $6.
B)   a price between $3 and $6.
C)   a price between $6 and $9.
D)   any price above $6.E) All of the above
F) A) and D)

Question 8

Economists generally believe that rent control is

Accepted Answer

A)   an efficient and fair way to help the poor.
B)   inefficient,but the best available means of solving a serious social problem.
C)   a highly inefficient way to help the poor raise their standard of living.
D)   an efficient way to allocate housing,but not a good way to help the poor.E) A) and B)
F) B) and C)

Question 9

Figure 6-1
Panel (a) Panel (b)   
-Refer to Figure 6-1.A binding price ceiling is shown in

Accepted Answer

A)   panel (a) but not panel (b) .
B)   panel (b) but not panel (a) .
C)   both panel (a) and panel (b) .
D)   neither panel (a) nor panel (b) .E) A) and B)
F) None of the above

Question 10

Figure 6-14 
-Refer to Figure 6-14.Suppose a tax of $2 per unit is imposed on this market.What will be the new equilibrium quantity in this market?

Accepted Answer

A)   less than 50 units
B)   50 units
C)   between 50 units and 100 units
D)   greater than 100 unitsE) C) and D)
F) A) and B)

Question 11

In the 1970s,long lines at gas stations in the United States were primarily a result of the fact that

Accepted Answer

A)   OPEC raised the price of crude oil in world markets.
B)   U.S.gasoline producers raised the price of gasoline.
C)   the U.S.government maintained a price ceiling on gasoline.
D)   Americans typically commuted long distances.E) B) and D)
F) C) and D)

Question 12

The minimum wage,if it is binding,lowers the incomes of

Accepted Answer

A)   no workers.
B)   only those workers become unemployed.
C)   only those workers who have jobs.
D)   all workers.E) A) and D)
F) C) and D)

Question 13

Figure 6-11 
-Refer to Figure 6-11.The amount of the tax per unit is

Accepted Answer

A)   $1.
B)   $1.50.
C)   $2.50.
D)   $3.50.E) A) and D)
F) C) and D)

Question 14

The U.S.minimum wage according to federal law is scheduled to increase to

Accepted Answer

A)   $5.15 per hour by 2010.
B)   $5.75 per hour by 2010.
C)   $7.25 per hour by 2010.
D)   $10.25 per hour by 2010.E) A) and B)
F) All of the above

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

When a tax is imposed on the buyers of a good,the demand curve shifts

Accepted Answer

A)   upward by the amount of the tax.
B)   downward by the amount of the tax.
C)   upward by less than the amount of the tax.
D)   downward by less than the amount of the tax.E) A) and C)
F) C) and D)

Question 17

If the minimum wage exceeds the equilibrium wage,then

Accepted Answer

A)   the quantity demanded of labor will exceed the quantity supplied.
B)   the quantity supplied of labor will exceed the quantity demanded.
C)   the minimum wage will not be binding.
D)   there will be no unemployment.E) C) and D)
F) B) and D)

Question 18

Figure 6-10 
-Refer to Figure 6-10.How much tax revenue does this tax produce for the government?

Accepted Answer

A)   $480
B)   $600
C)   $800
D)   $1120E) None of the above
F) B) and C)

Question 19

Figure 6-5 
-Refer to Figure 6-5.If the government imposes a price ceiling of $2 on this market,then the result is a

Accepted Answer

A)   shortage of 0 units of the good.
B)   shortage of 40 units of the good.
C)   shortage of 60 units of the good.
D)   shortage of 85 units of the good.E) None of the above
F) A) and C)

Question 20

Unlike minimum wage laws,wage subsidies

Accepted Answer

A)   discourage firms from hiring the working poor.
B)   cause unemployment.
C)   help only wealthy workers.
D)   raise the living standards of the working poor without creating unemployment.E) A) and D)
F) None of the above

Exam 6: Supply, Demand, and Government Policies

The quantity sold in a market will increase if the government

Correct Answer
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Figure 6-5 -Refer to Figure 6-5.If the government imposes a price ceiling of $2 on this market,then the result is a

Correct Answer
verified

A tax on the sellers of coffee will

Correct Answer
verified

When a tax is imposed on the buyers of a good,the demand curve shifts

Correct Answer
verified

In the 1970s,long lines at gas stations in the United States were primarily a result of the fact that

Correct Answer
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Figure 6-11 -Refer to Figure 6-11.The amount of the tax per unit is

Correct Answer
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If the minimum wage exceeds the equilibrium wage,then

Correct Answer
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To be binding,a price floor must be set above the equilibrium price.

Correct Answer
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Unlike minimum wage laws,wage subsidies

Correct Answer
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Figure 6-14 -Refer to Figure 6-14.Suppose a tax of $2 per unit is imposed on this market.What will be the new equilibrium quantity in this market?

Correct Answer
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The U.S.minimum wage according to federal law is scheduled to increase to

Correct Answer
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Figure 6-11 -Refer to Figure 6-11.As the figure is drawn,who sends the tax payment to the government?

Correct Answer
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Figure 6-4 -Refer to Figure 6-4.For a price ceiling to be binding in this market,it would have to be set at

Correct Answer
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Figure 6-10 -Refer to Figure 6-10.How much tax revenue does this tax produce for the government?

Correct Answer
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Figure 6-1 Panel (a) Panel (b) -Refer to Figure 6-1.A binding price ceiling is shown in

Correct Answer
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Economists generally believe that rent control is

Correct Answer
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Correct Answer
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The minimum wage,if it is binding,lowers the incomes of

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

The quantity sold in a market will increase if the government

Correct AnswerverifiedShow Answer

Figure 6-5 -Refer to Figure 6-5.If the government imposes a price ceiling of $2 on this market,then the result is a

Correct AnswerverifiedShow Answer

A tax on the sellers of coffee will

Correct AnswerverifiedShow Answer

When a tax is imposed on the buyers of a good,the demand curve shifts

Correct AnswerverifiedShow Answer

In the 1970s,long lines at gas stations in the United States were primarily a result of the fact that

Correct AnswerverifiedShow Answer

Figure 6-11 -Refer to Figure 6-11.The amount of the tax per unit is

Correct AnswerverifiedShow Answer

If the minimum wage exceeds the equilibrium wage,then

Correct AnswerverifiedShow Answer

To be binding,a price floor must be set above the equilibrium price.

Correct AnswerverifiedShow Answer

Unlike minimum wage laws,wage subsidies

Correct AnswerverifiedShow Answer

Figure 6-14 -Refer to Figure 6-14.Suppose a tax of $2 per unit is imposed on this market.What will be the new equilibrium quantity in this market?

Correct AnswerverifiedShow Answer

The U.S.minimum wage according to federal law is scheduled to increase to

Correct AnswerverifiedShow Answer

Figure 6-11 -Refer to Figure 6-11.As the figure is drawn,who sends the tax payment to the government?

Correct AnswerverifiedShow Answer

Figure 6-4 -Refer to Figure 6-4.For a price ceiling to be binding in this market,it would have to be set at

Correct AnswerverifiedShow Answer

Figure 6-10 -Refer to Figure 6-10.How much tax revenue does this tax produce for the government?

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Figure 6-1 Panel (a) Panel (b) -Refer to Figure 6-1.A binding price ceiling is shown in

Correct AnswerverifiedShow Answer

Economists generally believe that rent control is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The minimum wage,if it is binding,lowers the incomes of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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