Question 1

Suppose the government has imposed a price floor on cellular phones.Which of the following events could transform the price floor from one that is binding to one that is not binding?

Accepted Answer

A)   Cellular phones become less popular.
B)   Traditional land line phones become more expensive.
C)   The components used to produce cellular phones become less expensive.
D)   Firms expect the price of cellular phones to fall in the future.E) B) and C)
F) All of the above

Question 2

Policymakers use taxes to raise revenue for public purposes and to influence market outcomes.

Accepted Answer

A) True 
 B)False

Question 3

Figure 6-8 
-Refer to Figure 6-8.If the government imposes a price floor of $5 on this market,then there will be

Accepted Answer

A)   no surplus of the good.
B)   a surplus of 20 units of the good.
C)   a surplus of 30 units of the good.
D)   a surplus of 55 units of the good.E) B) and D)
F) All of the above

Question 4

Which of the following is not correct?

Accepted Answer

A)   The economy contains many labor markets for different types of workers.
B)   The impact of the minimum wage depends on the skill and experience of the worker.
C)   The minimum wage is binding for workers with high skills and much experience.
D)   The minimum wage is not binding when the equilibrium wage is above the minimum wage.E) B) and C)
F) C) and D)

Question 5

When a tax is placed on the buyers of a product,the

Accepted Answer

A)   size of the market decreases.
B)   effective price received by sellers decreases,and the price paid by buyers increases.
C)   demand for the product decreases.
D)   All of the above are correct.E) B) and C)
F) A) and B)

Question 6

If a nonbinding price floor is imposed on a market,then the

Accepted Answer

A)   quantity sold in the market will decrease.
B)   quantity sold in the market will stay the same.
C)   price in the market will increase.
D)   price in the market will decrease.E) A) and B)
F) All of the above

Question 7

When a tax is placed on the buyers of tennis racquets,the size of the tennis racquet market

Accepted Answer

A)   and the price paid by buyers both decrease.
B)   decreases,but the price paid by buyers increases.
C)   increases,but the price paid by buyers decreases.
D)   and the price paid by buyers both increase.E) None of the above
F) A) and C)

Question 8

A binding price floor causes quantity supplied to be less than quantity demanded.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)   decrease by less than $500.
B)   decrease by exactly $500.
C)   decrease by more than $500.
D)   increase by an indeterminate amount.E) A) and B)
F) All of the above

Question 10

Figure 6-9 
-Refer to Figure 6-9.A price floor set at

Accepted Answer

A)   $4 will be binding and will result in a shortage of 3 units.
B)   $4 will be binding and will result in a shortage of 6 units.
C)   $7 will be binding and will result in a surplus of 6 units.
D)   $7 will be binding and will result in a surplus of 12 units.E) B) and D)
F) A) and D) D

Question 11

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 12

A minimum wage that is set above a market's equilibrium wage will result in an excess

Accepted Answer

A)   demand for labor,that is,unemployment.
B)   demand for labor,that is,a shortage of workers.
C)   supply of labor,that is,unemployment.
D)   supply of labor,that is,a shortage of workers.E) A) and C)
F) C) and D) C

Question 13

If a tax is levied on the buyers of a product,then there will be a(n)

Accepted Answer

A)   downward shift of the supply curve.
B)   upward shift of the supply curve.
C)   movement up and to the right along the supply curve.
D)   movement down and to the left along the supply curve.E) A) and B)
F) A) and C) D

Question 14

Figure 6-10 
-Refer to Figure 6-10.A price floor set at

Accepted Answer

A)   $6 will be binding and will result in a surplus of 8 units.
B)   $6 will be binding and will result in a surplus of 4 units.
C)   $16 will be binding and will result in a surplus of 12 units.
D)   $16 will be binding and will result in a surplus of 6 units.E) A) and B)
F) A) and C)

Question 15

The price received by sellers 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)   None of the above is correct.E) C) and D)
F) All of the above

Question 16

Minimum-wage laws are precise policy instruments that can specifically target workers whose family incomes are low.

Accepted Answer

A) True 
 B)False

Question 17

A price ceiling is

Accepted Answer

A)   often imposed on markets in which "cutthroat competition" would prevail without a price ceiling.
B)   a legal maximum on the price at which a good can be sold.
C)   often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price ceiling.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 18

Figure 6-11 
-Refer to Figure 6-11.If the government imposes a price floor at $9,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) A) and C)
F) A) and B)

Question 19

Under rent control,landlords cease to be responsive to tenants' concerns about the quality of the housing because

Accepted Answer

A)   with rent control,the government guarantees landlords a minimum level of profit.
B)   they become resigned to the fact that many of their apartments are going to be vacant at any given time.
C)   with shortages and waiting lists,they have no incentive to maintain and improve their property.
D)   with rent control,it becomes the government's responsibility to maintain rental housing.E) A) and D)
F) B) 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 B)
F) A) and C)

Exam 6: Supply,demand,and Government Policies

Suppose the government has imposed a price floor on cellular phones.Which of the following events could transform the price floor from one that is binding to one that is not binding?

Correct AnswerverifiedShow Answer

Policymakers use taxes to raise revenue for public purposes and to influence market outcomes.

Correct AnswerverifiedShow Answer

Figure 6-8 -Refer to Figure 6-8.If the government imposes a price floor of $5 on this market,then there will be

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

When a tax is placed on the buyers of a product,the

Correct AnswerverifiedShow Answer

If a nonbinding price floor is imposed on a market,then the

Correct AnswerverifiedShow Answer

When a tax is placed on the buyers of tennis racquets,the size of the tennis racquet market

Correct AnswerverifiedShow Answer

A binding price floor causes quantity supplied to be less than quantity demanded.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-9 -Refer to Figure 6-9.A price floor set at

Correct AnswerverifiedD

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

Correct AnswerverifiedShow Answer

A minimum wage that is set above a market's equilibrium wage will result in an excess

Correct AnswerverifiedC

If a tax is levied on the buyers of a product,then there will be a(n)

Correct AnswerverifiedD

Figure 6-10 -Refer to Figure 6-10.A price floor set at

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Minimum-wage laws are precise policy instruments that can specifically target workers whose family incomes are low.

Correct AnswerverifiedShow Answer

A price ceiling is

Correct AnswerverifiedShow Answer

Figure 6-11 -Refer to Figure 6-11.If the government imposes a price floor at $9,it would be

Correct AnswerverifiedShow Answer

Under rent control,landlords cease to be responsive to tenants' concerns about the quality of the housing because

Correct AnswerverifiedShow Answer

Unlike minimum wage laws,wage subsidies

Correct AnswerverifiedShow 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
D

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified