Question 1

Using a supply and demand diagram,show a labor market with a binding minimum wage.Use the diagram to show those who are helped by the minimum wage and those who are hurt by the minimum wage.

Accepted Answer

a.For this example,a $300 price ceiling ...

Question 2

Figure 6-3

-Refer to Figure 6-3.A nonbinding price floor is shown in

Accepted Answer

A)   both panel (a) and panel (b) .
B)   panel (a) only.
C)   panel (b) only.
D)   neither panel (a) nor panel (b) .E) B) and C)
F) None of the above

Question 3

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Accepted Answer

A)   price will no longer be the mechanism that rations scarce resources.
B)   long lines of buyers may develop.
C)   sellers could ration the good or service according to their own personal biases.
D)   All of the above are correct.E) None of the above
F) All of the above

Question 4

A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

Accepted Answer

A) True 
 B)False

Question 5

The price paid by buyers in a market will decrease if the government

Accepted Answer

A)   imposes 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)   decreases a binding price floor in that market.E) A) and B)
F) None of the above

Question 6

As a rationing mechanism,discrimination according to seller bias is

Accepted Answer

A)   efficient and fair.
B)   efficient,but potentially unfair.
C)   inefficient,but fair.
D)   inefficient and potentially unfair.E) B) and C)
F) A) and B)

Question 7

A tax burden falls more heavily on the side of the market that

Accepted Answer

A)   has a fewer number of participants.
B)   is more inelastic.
C)   is closer to unit elastic.
D)   is less inelastic.E) B) and C)
F) C) and D)

Question 8

The effects of rent control in the long run include lower rents and lower-quality housing.

Accepted Answer

A) True 
 B)False

Question 9

Over time,housing shortages caused by rent control

Accepted Answer

A)   increase,because the demand for and supply of housing are less elastic in the long run.
B)   increase,because the demand for and supply of housing are more elastic in the long run.
C)   decrease,because the demand for and supply of housing are less elastic in the long run.
D)   decrease,because the demand for and supply of housing are more elastic in the long run.E) A) and D)
F) All of the above

Question 10

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

Question 11

Policymakers use taxes

Accepted Answer

A)   to raise revenue for public purposes but not to influence market outcomes.
B)   both to raise revenue for public purposes and to influence market outcomes.
C)   when they realize that price controls alone are insufficient to correct market inequities.
D)   only in those markets in which the burden of the tax falls clearly on the sellers.E) None of the above
F) B) and C)

Question 12

Define a price ceiling.

Accepted Answer

A price ceiling is a...

Question 13

If the government wants to reduce smoking,it should impose a tax on

Accepted Answer

A)   buyers of cigarettes.
B)   sellers of cigarettes.
C)   either buyers or sellers of cigarettes.
D)   whichever side of the market is less elastic.E) A) and B)
F) All of the above

Question 14

Price ceilings are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 15

Minimum-wage laws dictate the

Accepted Answer

A)   average price employers must pay for labor.
B)   highest price employers may pay for labor.
C)   lowest price employers may pay for labor.
D)   the highest and lowest prices employers may pay for labor.E) B) and C)
F) A) and D)

Question 16

When a tax is placed on the sellers of cell phones,the size of the cell phone market

Accepted Answer

A)   and the price paid by buyers both increase.
B)   increases,but the price paid by buyers decreases.
C)   decreases,but the price paid by buyers increases.
D)   and the price paid by buyers both decrease.E) B) and C)
F) A) and D)

Question 17

A price floor set above the equilibrium price causes quantity supplied to exceed quantity demanded.

Accepted Answer

A) True 
 B)False

Question 18

A tax of $1 on buyers always decreases the equilibrium price by $1.

Accepted Answer

A) True 
 B)False

Question 19

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

Accepted Answer

A)   increase the effective price of coffee received by sellers,and increase the equilibrium quantity of coffee.
B)   increase the effective price of coffee received by sellers,and decrease the equilibrium quantity of coffee.
C)   decrease the effective price of coffee received by sellers,and increase the equilibrium quantity of coffee.
D)   decrease the effective price of coffee received by sellers,and decrease the equilibrium quantity of coffee.E) A) and D)
F) C) and D)

Question 20

If the supply curve is more price elastic than the demand 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 buyers will bear...

Exam 6: Supply,demand,and Government Policies

A price floor set above the equilibrium price causes quantity supplied to exceed quantity demanded.

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If the supply curve is more price elastic than the demand 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 buyers will bear...View AnswerShow Answer

As a rationing mechanism,discrimination according to seller bias is

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In response to a shortage caused by the imposition of a binding price ceiling on a market,

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A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.

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A tax burden falls more heavily on the side of the market that

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Policymakers use taxes

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Using a supply and demand diagram,show a labor market with a binding minimum wage.Use the diagram to show those who are helped by the minimum wage and those who are hurt by the minimum wage.

Correct Answerverifieda.For this example,a $300 price ceiling ...View AnswerShow Answer

If the government wants to reduce smoking,it should impose a tax on

Correct AnswerverifiedShow Answer

Over time,housing shortages caused by rent control

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Figure 6-3 -Refer to Figure 6-3.A nonbinding price floor is shown in

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When a tax is placed on the sellers of cell phones,the size of the cell phone market

Correct AnswerverifiedShow Answer

Minimum-wage laws dictate the

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Define a price ceiling.

Correct AnswerverifiedA price ceiling is a...View AnswerShow Answer

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

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A tax of $1 on buyers always decreases the equilibrium price by $1.

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The effects of rent control in the long run include lower rents and lower-quality housing.

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Price ceilings are typically imposed to benefit sellers.

Correct AnswerverifiedShow Answer

The incidence of a tax falls more heavily on

Correct AnswerverifiedShow Answer

The price paid by buyers in a market will decrease if the government

Correct AnswerverifiedShow Answer

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The buyers will bear...
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a.For this example,a $300 price ceiling ...
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A price ceiling is a...
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