Question 1

Price floors are typically imposed to benefit buyers.

Accepted Answer

A) True 
 B)False

Question 2

The minimum wage has its greatest impact on the market for

Accepted Answer

A)   female labor.
B)   older labor.
C)   black labor.
D)   teenage labor.E) All of the above
F) A) and B)

Question 3

If the demand curve is more price elastic than the supply curve in a particular market,will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Accepted Answer

The sellers will bea...

Question 4

A tax on sellers and an increase in input prices affect the supply curve in the same way.

Accepted Answer

A) True 
 B)False

Question 5

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.E) C) and D)
F) B) and C)

Question 6

A price ceiling 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.E) A) and D)
F) A) and B)

Question 7

The Federal Insurance Contribution Act (FICA) tax is an example of a(n)

Accepted Answer

A)   payroll tax.
B)   sales tax.
C)   farm subsidy.
D)   income subsidy.E) A) and D)
F) All of the above

Question 8

One common example of a price ceiling is rent control.

Accepted Answer

A) True 
 B)False

Question 9

Figure 6-18 
-Refer to Figure 6-18.The amount of the tax per unit is

Accepted Answer

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

Question 10

A price floor is

Accepted Answer

A)   a legal minimum on the price at which a good can be sold.
B)   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 floor.
C)   a source of inefficiency in a market.
D)   All of the above are correct.E) None of the above
F) B) and D)

Question 11

Figure 6-25

-Refer to Figure 6-25.In which market will the tax burden be most equally divided between buyers and sellers?

Accepted Answer

A)   market (a) 
B)   market (b) 
C)   market (c) 
D)   All of the above are correct.E) B) and D)
F) A) and B)

Question 12

Figure 6-13 
-Refer to Figure 6-13.In this market,a minimum wage of $2.75 creates a labor

Accepted Answer

A)   shortage of 2,250 workers.
B)   shortage of 4,500 workers.
C)   surplus of 2,250 workers.
D)   neither a labor shortage nor surplus.E) A) and B)
F) None of the above

Question 13

If the government removes a binding price floor from a market,then the price received by sellers will

Accepted Answer

A)   decrease,and the quantity sold in the market will decrease.
B)   decrease,and the quantity sold in the market will increase.
C)   increase,and the quantity sold in the market will decrease.
D)   increase,and the quantity sold in the market will increase.E) A) and B)
F) B) and C)

Question 14

A tax imposed on the sellers of a good will

Accepted Answer

A)   raise both the price buyers pay and the effective price sellers receive.
B)   raise the price buyers pay and lower the effective price sellers receive.
C)   lower the price buyers pay and raise the effective price sellers receive.
D)   lower both the price buyers pay and the effective price sellers receive.E) A) and B)
F) B) and D)

Question 15

A tax on sellers increases supply.

Accepted Answer

A) True 
 B)False

Question 16

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) C) and D)
F) B) and C)

Question 17

Which of the following is not a function of prices in a market system?

Accepted Answer

A)   Prices have the crucial job of balancing supply and demand.
B)   Prices send signals to buyers and sellers to help them make rational economic decisions.
C)   Prices coordinate economic activity.
D)   Prices ensure an equal distribution of goods and services among consumers.E) None of the above
F) A) and B)

Question 18

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 75 units.
C)   be binding and will result in a surplus of 125 units.
D)   not be binding.E) B) and D)
F) A) and D)

Question 19

Figure 6-4 
-Refer to Figure 6-4.If the government set a price floor at $9,would there be a shortage or surplus,and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 20

Figure 6-20 
-Refer to Figure 6-20.The per-unit burden of the tax on buyers of the good is

Accepted Answer

A)   $2.
B)   $4.
C)   $6.
D)   $8.E) A) and B)
F) A) and C)

Exam 6: Supply,demand,and Government Policies

A tax on sellers and an increase in input prices affect the supply curve in the same way.

Correct AnswerverifiedShow Answer

A price floor is

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Figure 6-13 -Refer to Figure 6-13.In this market,a minimum wage of $2.75 creates a labor

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Figure 6-4 -Refer to Figure 6-4.If the government set a price floor at $9,would there be a shortage or surplus,and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at...View AnswerShow Answer

A tax imposed on the sellers of a good will

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Figure 6-18 -Refer to Figure 6-18.The amount of the tax per unit is

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A tax on sellers increases supply.

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Figure 6-25 -Refer to Figure 6-25.In which market will the tax burden be most equally divided between buyers and sellers?

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If the government removes a binding price floor from a market,then the price received by sellers will

Correct AnswerverifiedShow Answer

Price floors are typically imposed to benefit buyers.

Correct AnswerverifiedShow Answer

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

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One common example of a price ceiling is rent control.

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A price ceiling is binding when it is set

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If the demand curve is more price elastic than the supply curve in a particular market,will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Correct AnswerverifiedThe sellers will bea...View AnswerShow Answer

Which of the following is not a function of prices in a market system?

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Figure 6-20 -Refer to Figure 6-20.The per-unit burden of the tax on buyers of the good is

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The Federal Insurance Contribution Act (FICA) tax is an example of a(n)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The minimum wage has its greatest impact on the market for

Correct AnswerverifiedShow Answer

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A price floor set at...
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The sellers will bea...
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