Question 1

A tax burden falls more heavily on the side of the market that is less elastic.

Accepted Answer

A) True 
 B)False

Question 2

Suppose the government imposes a 50-cent tax on the sellers of packets of chewing gum.The tax would

Accepted Answer

A)   shift the supply curve upward by less than 50 cents.
B)   raise the equilibrium price by 50 cents.
C)   create a 50-cent tax burden each for buyers and sellers.
D)   discourage market activity.E) A) and D)
F) All of the above

Question 3

Figure 6-15 
-Refer to Figure 6-15.Suppose a tax of $2 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

Accepted Answer

A)   $3
B)   between $3 and $5
C)   between $5 and $7
D)   $7E) A) and B)
F) None of the above

Question 4

Figure 6-18 
-Refer to Figure 6-18.The effective price sellers receive after the tax is imposed is

Accepted Answer

A)   $2.50.
B)   $3.50.
C)   $5.00.
D)   $6.00.E) B) and D)
F) A) and D)

Question 5

Which of the following is correct?

Accepted Answer

A)   Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage raises the average wage of teenagers by 10 percent.
B)   The drop in teenage employment caused by a 10 percent increase in the minimum wage is not significant.
C)   The minimum wage is more often binding for teenagers than for other members of the labor force.
D)   All firms consistently enforce minimum-wage laws.E) None of the above
F) C) and D)

Question 6

A tax on sellers will shift the

Accepted Answer

A)   demand curve upward by the amount of the tax.
B)   demand curve downward by the amount of the tax.
C)   supply curve upward by the amount of the tax.
D)   supply curve downward by the amount of the tax.E) C) and D)
F) A) and B)

Question 7

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

Question 8

A tax on buyers increases the size of a market.

Accepted Answer

A) True 
 B)False  False

Question 9

If a price ceiling of $1.50 per gallon is imposed on gasoline,and the market equilibrium price is $2,then the price ceiling is a binding constraint on the market.

Accepted Answer

A) True 
 B)False

Question 10

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

Question 11

All buyers benefit from a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 12

When a tax is levied on buyers of tea,

Accepted Answer

A)   buyers of tea and sellers of tea both are made worse off.
B)   buyers of tea are made worse off,and the well-being of sellers is unaffected.
C)   buyers of tea are made worse off,and sellers of tea are made better off.
D)   the well-being of both buyers of tea and sellers of tea is unaffected.E) B) and C)
F) A) and D) A

Question 13

Price controls are usually enacted

Accepted Answer

A)   as a means of raising revenue for public purposes.
B)   when policymakers believe that the market price of a good or service is unfair to buyers or sellers.
C)   when policymakers detect inefficiencies in a market.
D)   All of the above are correct.E) B) and C)
F) C) and D)

Question 14

When a tax is imposed on a good,the result is always a shortage of the good.

Accepted Answer

A) True 
 B)False

Question 15

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Accepted Answer

A) True 
 B)False

Question 16

Price controls can generate inequities.

Accepted Answer

A) True 
 B)False

Question 17

Rent control policies tend to cause

Accepted Answer

A)   relatively smaller shortages in the short run than in the long run because supply and demand tend to be more elastic in the short run than in the long run.
B)   relatively larger shortages in the short run than in the long run because supply and demand tend to be more elastic in the short run than in the long run.
C)   relatively larger shortages in the short run than in the long run because supply and demand tend to be more inelastic in the short run than in the long run.
D)   relatively smaller shortages in the short run than in the long run because supply and demand tend to be more inelastic in the short run than in the long run.E) B) and D)
F) A) and C)

Question 18

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 market price is

Accepted Answer

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

Question 19

The impact of the minimum wage depends on the skill and experience of the worker.

Accepted Answer

A) True 
 B)False

Question 20

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets,then fewer airline tickets will be sold than at the market equilibrium.

Accepted Answer

A) True 
 B)False

Exam 6: Supply,demand,and Government Policies

A tax burden falls more heavily on the side of the market that is less elastic.

Correct Answer
verified

Suppose the government imposes a 50-cent tax on the sellers of packets of chewing gum.The tax would

Correct Answer
verified

Figure 6-15 -Refer to Figure 6-15.Suppose a tax of $2 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

Correct Answer
verified

Figure 6-18 -Refer to Figure 6-18.The effective price sellers receive after the tax is imposed is

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

A tax on sellers will shift the

Correct Answer
verified

A price ceiling is

Correct Answer
verified

A tax on buyers increases the size of a market.

Correct Answer
verified
False

If a price ceiling of $1.50 per gallon is imposed on gasoline,and the market equilibrium price is $2,then the price ceiling is a binding constraint on the market.

Correct Answer
verified

Which of the following would not interfere with market equilibria?

Correct Answer
verified

All buyers benefit from a binding price ceiling.

Correct Answer
verified

When a tax is levied on buyers of tea,

Correct Answer
verified
A

Price controls are usually enacted

Correct Answer
verified

When a tax is imposed on a good,the result is always a shortage of the good.

Correct Answer
verified

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Correct Answer
verified

Price controls can generate inequities.

Correct Answer
verified

Rent control policies tend to cause

Correct Answer
verified

Correct Answer
verified
B

The impact of the minimum wage depends on the skill and experience of the worker.

Correct Answer
verified

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets,then fewer airline tickets will be sold than at the market equilibrium.

Correct Answer
verified

Exam 6: Supply,demand,and Government Policies

A tax burden falls more heavily on the side of the market that is less elastic.

Correct AnswerverifiedShow Answer

Suppose the government imposes a 50-cent tax on the sellers of packets of chewing gum.The tax would

Correct AnswerverifiedShow Answer

Figure 6-15 -Refer to Figure 6-15.Suppose a tax of $2 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

Correct AnswerverifiedShow Answer

Figure 6-18 -Refer to Figure 6-18.The effective price sellers receive after the tax is imposed is

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

A tax on sellers will shift the

Correct AnswerverifiedShow Answer

A price ceiling is

Correct AnswerverifiedShow Answer

A tax on buyers increases the size of a market.

Correct AnswerverifiedFalse

If a price ceiling of $1.50 per gallon is imposed on gasoline,and the market equilibrium price is $2,then the price ceiling is a binding constraint on the market.

Correct AnswerverifiedShow Answer

Which of the following would not interfere with market equilibria?

Correct AnswerverifiedShow Answer

All buyers benefit from a binding price ceiling.

Correct AnswerverifiedShow Answer

When a tax is levied on buyers of tea,

Correct AnswerverifiedA

Price controls are usually enacted

Correct AnswerverifiedShow Answer

When a tax is imposed on a good,the result is always a shortage of the good.

Correct AnswerverifiedShow Answer

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Correct AnswerverifiedShow Answer

Price controls can generate inequities.

Correct AnswerverifiedShow Answer

Rent control policies tend to cause

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

The impact of the minimum wage depends on the skill and experience of the worker.

Correct AnswerverifiedShow Answer

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets,then fewer airline tickets will be sold than at the market equilibrium.

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
False

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified