Question 1

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

Accepted Answer

A)  demand, raising both the equilibrium price and quantity in the market for artificially-sweetened beverages.
B)  demand, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages.
C)  supply, raising the equilibrium price and lowering the equilibrium quantity in the market for artificially-sweetened beverages.
D)  supply, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages.E) A) and D)
F) A) and C)

Question 2

A legal minimum on the price at which a good can be sold is called a price

Accepted Answer

A)  subsidy.
B)  floor.
C)  support.
D)  ceiling.E) B) and D)
F) A) and B)

Question 3

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Which of the following would not interfere with market equilibria?

Accepted Answer

A)  a minimum wage
B)  a rent control
C)  a non-binding price floor
D)  a binding price ceilingE) A) and B)
F) A) and C)

Question 6

Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

Accepted Answer

A)  frequent rental programs such as "Rent nine times and the tenth rental is free!"
B)  enhanced maintenance programs to promote the high quality of the cars
C)  free gasoline given to people as an incentive to a rent a car
D)  slow replacement of old rental cars with newer onesE) B) and C)
F) None of the above

Question 7

Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

Accepted Answer

A)  Buyers bear the entire burden of the tax.
B)  Sellers bear the entire burden of the tax.
C)  Buyers and sellers share the burden of the tax.
D)  We have to know whether it is the buyers or the sellers that are required to pay the tax to the government in order to make this determination.E) A) and C)
F) None of the above

Question 8

Figure 6-1
 
-Refer to Figure 6-1. The price ceiling shown in panel (a)

Accepted Answer

A)  is not binding.
B)  creates a surplus.
C)  creates a shortage.
D)  Both a)  and b)  are correct.E) None of the above
F) B) and C)

Question 9

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 B)
F) A) and C)

Question 10

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Accepted Answer

A)  the supply curve for mopeds shifts downward by $200.
B)  sellers of mopeds receive $200 less per mopeds than they were receiving before the tax.
C)  buyers of mopeds are unaffected by the tax.
D)  None of the above is correct.E) None of the above
F) A) and D)

Question 11

Figure 6-18 
-Refer to Figure 6-18. Suppose the same supply and demand curves apply, and a tax of the same amount per unit as shown here is imposed. Now, however, the buyers of the good, rather than the sellers, are required to pay the tax to the government. After the buyers pay the tax, relative to the case depicted in the figure, the burden on buyers will be

Accepted Answer

A)  larger, and the burden on sellers will be smaller.
B)  smaller, and the burden on sellers will be larger.
C)  the same, and the burden on sellers will be the same.
D)  The relative burdens in the two cases cannot be determined without further information.E) A) and D)
F) A) and C)

Question 12

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) None of the above

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

The minimum wage is an example of a

Accepted Answer

A)  price ceiling.
B)  price floor.
C)  wage subsidy.
D)  tax.E) All of the above
F) A) and B)

Question 15

Figure 6-20 
-Refer to Figure 6-20. Which of the following statements is correct?

Accepted Answer

A)  The amount of the tax per unit is $6.
B)  The tax leaves the size of the market unchanged.
C)  The tax is levied on buyers of the good, rather than on sellers.
D)  All of the above are correct.E) A) and B)
F) B) and D)

Question 16

You have responsibility for economic policy in the country of Freedonia. Recently, the neighboring country of Sylvania has cut off all exports of oranges to Freedonia. Harpo, who is one of your advisors, suggests that you should impose a binding price ceiling in order to avoid a shortage of oranges. Chico, another one of your advisors, argues that without a binding price floor, a shortage will certainly develop. Zeppo, a third advisor, says that the best way to avoid a shortage of oranges is to take no action at all. Which of your three advisors is most likely to have studied economics?

Accepted Answer

A)  Harpo
B)  Chico
C)  Zeppo
D)  Apparently, all three advisors have studied economics, but their views on positive economics are different.E) All of the above
F) A) and D)

Question 17

Figure 6-20 
-Refer to Figure 6-20. What is the amount of the tax per unit?

Accepted Answer

A)  $8
B)  $6
C)  $4
D)  $2E) A) and C)
F) All of the above

Question 18

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Accepted Answer

A) True 
 B)False

Question 19

Table 6-1
   Price  Quantity  Denanded  Quantity  Sugplied $[12120$1102$284$366$448$5210$6012\begin{array} { | c | c | c | } \hline 	ext { Price } & \begin{array} { c } 	ext { Quantity } \	ext { Denanded }\end{array} & \begin{array} { c } 	ext { Quantity } \	ext { Sugplied }\end{array} \\hline \$ [ 12 & 12 & 0 \\hline \$ 1 & 10 & 2 \\hline \$ 2 & 8 & 4 \\hline \$ 3 & 6 & 6 \\hline \$ 4 & 4 & 8 \\hline \$ 5 & 2 & 10 \\hline \$ 6 & 0 & 12 \\hline\end{array} Price $[12$1$2$3$4$5$6​ Quantity  Denanded ​121086420​ Quantity  Sugplied ​024681012​​ 
-Refer to Table 6-1. Which of the following price ceilings would be binding in this market?

Accepted Answer

A)  $2
B)  $3
C)  $4
D)  $5 E) A) and C)
F) B) and C)

Question 20

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

Exam 6: Supply, Demand, and Government Policies

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

Correct Answer
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Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

Correct Answer
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Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

Correct Answer
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Figure 6-1 -Refer to Figure 6-1. The price ceiling shown in panel (a)

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

Correct Answer
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Figure 6-20 -Refer to Figure 6-20. Which of the following statements is correct?

Correct Answer
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Figure 6-20 -Refer to Figure 6-20. What is the amount of the tax per unit?

Correct Answer
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If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Correct Answer
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Correct Answer
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Which of the following would not interfere with market equilibria?

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

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

Correct Answer
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The minimum wage is an example of a

Correct Answer
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A legal minimum on the price at which a good can be sold is called a price

Correct Answer
verified

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

Correct Answer
verified

Correct Answer
verified

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Correct Answer
verified

The incidence of a tax falls more heavily on

Correct Answer
verified

Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

Correct AnswerverifiedShow Answer

Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

Correct AnswerverifiedShow Answer

Figure 6-1 -Refer to Figure 6-1. The price ceiling shown in panel (a)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-20 -Refer to Figure 6-20. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Figure 6-20 -Refer to Figure 6-20. What is the amount of the tax per unit?

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If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following would not interfere with market equilibria?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The minimum wage is an example of a

Correct AnswerverifiedShow Answer

A legal minimum on the price at which a good can be sold is called a price

Correct AnswerverifiedShow Answer

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Correct AnswerverifiedShow Answer

The incidence of a tax falls more heavily on

Correct AnswerverifiedShow Answer

Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

Correct AnswerverifiedShow Answer

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