Question 1

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 2

Rent-control laws dictate

Accepted Answer

A)   the exact rent that landlords must charge tenants.
B)   a maximum rent that landlords may charge tenants.
C)   a minimum rent that landlords may charge tenants.
D)   both a minimum rent and a maximum rent that landlords may charge tenants.E) None of the above
F) A) and B)

Question 3

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) A) and B)
F) A) and C)

Question 4

When a tax is imposed on the sellers of a good, the supply 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) B) and D)

Question 5

Figure 6-22 
-Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

Accepted Answer

A)   $2.00.
B)   $3.50.
C)   $5.00.
D)   $3.00.E) A) and D)
F) All of the above

Question 6

Figure 6-12 
-Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is

Accepted Answer

A)   less than Q3.
B)   Q3.
C)   between Q1 and Q3.
D)   at least Q1.E) B) and C)
F) C) and D)

Question 7

Figure 6-24 
-Refer to Figure 6-24. 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) B) and C)
F) All of the above

Question 8

Figure 6-32 
-Refer to Figure 6-32. If the government set a price ceiling at $40, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

There woul...

Question 9

A binding minimum wage creates a shortage of labor.

Accepted Answer

A) True 
 B)False

Question 10

The minimum wage was instituted to ensure workers

Accepted Answer

A)   a middle-class standard of living.
B)   employment.
C)   a minimally adequate standard of living.
D)   unemployment compensation.E) A) and D)
F) C) and D)

Question 11

Figure 6-29
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-29. Suppose D1 represents the demand curve for paperback novels, D2 represents the demand curve for gasoline, and S1 represents the supply curve for paperback novels and gasoline. After the imposition of the $2 on paperback novels and on gasoline, the

Accepted Answer

A)   buyers of gasoline bear a higher burden of the $2 tax than buyers of paperback novels.
B)   sellers of gasoline bear a higher burden of the $2 tax than sellers of paperback novels.
C)   buyers of gasoline bear an equal burden of the $2 tax as buyers of paperback novels.
D)   Both a)  and b)  are correct.E) A) and B)
F) A) and C)

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 B)
F) A) and C)

Question 13

Figure 6-36 
-Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A)   $8
B)   $6
C)   $12
D)   $10E) B) and C)
F) A) and C)

Question 15

Scenario 6-2
Suppose demand for a product is given by the equation  and supply for the product is given by the equation 
-Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Accepted Answer

The equilibrium pric...

Question 16

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

Accepted Answer

A)   decreases a binding price floor in that market.
B)   increases a binding price ceiling in that market.
C)   increases a tax on the good sold in that market.
D)   imposes a binding price ceiling in that market.E) B) and C)
F) C) and D)

Question 17

The minimum wage does not apply to

Accepted Answer

A)   jobs for teenagers.
B)   jobs for members of minority groups.
C)   unpaid internships.
D)   jobs that include on-the-job training.E) B) and C)
F) A) and B)

Question 18

Opponents of the minimum wage point out that the minimum wage

Accepted Answer

A)   encourages teenagers to drop out of school.
B)   prevents some workers from getting needed on-the-job training.
C)   contributes to the problem of unemployment.
D)   All of the above are correct.E) A) and D)
F) B) and D)

Question 19

Does a binding price ceiling result in a shortage or a surplus in the market?

Accepted Answer

A binding price ceil...

Question 20

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) None of the above
F) C) and D)

Exam 6: Supply, Demand, and Government Policies

Correct Answer
verified

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $40, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
There woul...
View Answer

A binding minimum wage creates a shortage of labor.

Correct Answer
verified

The minimum wage was instituted to ensure workers

Correct Answer
verified

Figure 6-22 -Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

Correct Answer
verified

Opponents of the minimum wage point out that the minimum wage

Correct Answer
verified

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Correct Answer
verified

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

Correct Answer
verified

A price floor is

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Scenario 6-2 Suppose demand for a product is given by the equation and supply for the product is given by the equation -Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Correct Answer
verified
The equilibrium pric...
View Answer

Figure 6-24 -Refer to Figure 6-24. Which of the following statements is correct?

Correct Answer
verified

Does a binding price ceiling result in a shortage or a surplus in the market?

Correct Answer
verified
A binding price ceil...
View Answer

When a tax is imposed on the sellers of a good, the supply curve shifts

Correct Answer
verified

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

Correct Answer
verified

Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is

Correct Answer
verified

Rent-control laws dictate

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

The minimum wage does not apply to

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Correct AnswerverifiedShow Answer

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $40, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedThere woul...View AnswerShow Answer

A binding minimum wage creates a shortage of labor.

Correct AnswerverifiedShow Answer

The minimum wage was instituted to ensure workers

Correct AnswerverifiedShow Answer

Figure 6-22 -Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

Correct AnswerverifiedShow Answer

Opponents of the minimum wage point out that the minimum wage

Correct AnswerverifiedShow Answer

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A price floor is

Correct AnswerverifiedShow Answer

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

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

Scenario 6-2 Suppose demand for a product is given by the equation and supply for the product is given by the equation -Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

Figure 6-24 -Refer to Figure 6-24. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Does a binding price ceiling result in a shortage or a surplus in the market?

Correct AnswerverifiedA binding price ceil...View AnswerShow Answer

When a tax is imposed on the sellers of a good, the supply curve shifts

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is

Correct AnswerverifiedShow Answer

Rent-control laws dictate

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

The minimum wage does not apply to

Correct AnswerverifiedShow 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
The equilibrium pric...
View Answer

Correct Answer
verified

Correct Answer
verified
A binding price ceil...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified