Question 1

Price ceilings are typically imposed to benefit buyers.

Accepted Answer

A) True 
 B)False

Question 2

Figure 6-17
This figure shows the market demand and market supply curves for good Y 
-Refer to Figure 6-17. A government-imposed price of $12 in this market is an example of a

Accepted Answer

A)  binding price ceiling that creates a shortage.
B)  non-binding price ceiling that creates a shortage.
C)  binding price floor that creates a surplus.
D)  non-binding price floor that creates a surplus.E) A) and D)
F) A) and C)

Question 3

Price floors are typically imposed to benefit buyers.

Accepted Answer

A) True 
 B)False

Question 4

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) A) and C)
F) C) and D)

Question 5

If a price floor is not binding, then

Accepted Answer

A)  there will be a surplus in the market.
B)  there will be a shortage in the market.
C)  there will be no effect on the market price or quantity sold.
D)  the market will be less efficient than it would be without the price floor.E) C) and D)
F) B) and C)

Question 6

The price paid by buyers in a market will increase if the government (i) 
Increases a binding price floor in that market.
(ii) 
Increases a binding price ceiling in that market.
(iii) 
Decreases a tax on the good sold in that market.

Accepted Answer

A)  (ii)  only
B)  (iii)  only
C)  (i)  and (ii)  only
D)  (i) , (ii) , and (iii) E) A) and B)
F) A) and C)

Question 7

A $0.10 tax levied on the sellers of chocolate bars will cause the

Accepted Answer

A)  supply curve for chocolate bars to shift down by $0.10.
B)  supply curve for chocolate bars to shift up by $0.10.
C)  demand curve for chocolate bars to shift down by $0.10.
D)  demand curve for chocolate bars to shift up by $0.10.E) A) and B)
F) B) and D)

Question 8

Figure 6-26 
-Refer to Figure 6-26. How much tax revenue does this tax produce for the government?

Accepted Answer

A)  $480
B)  $640
C)  $360
D)  $120E) A) and D)
F) All of the above

Question 9

Price ceilings are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 10

Figure 6-33 
-Refer to Figure 6-33. Suppose a $4 per-unit tax is imposed on the sellers of this good. How many units of this good will be sold after the tax is imposed?

Accepted Answer

With a $4 per-unit t...

Question 11

Figure 6-5 
-Refer to Figure 6-5. Suppose the market is initially in equilibrium. Then the government imposes a price control, as represented by the solid horizontal line on the graph. If the price control is a price floor, then the price control

Accepted Answer

A)  causes the quantity demanded to decrease by 50 units, relative to the initial equilibrium.
B)  causes the quantity supplied to increase by 40 units, relative to the initial equilibrium.
C)  means that some firms will not be able to sell all that they want
D)  All of the above are correct.E) All of the above
F) A) and B)

Question 12

Figure 6-13
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-13. If the government imposes a price floor of $7 on this market, then there will be

Accepted Answer

A)  no surplus.
B)  a surplus of 10 units.
C)  a surplus of 15 units.
D)  a surplus of 20 units.E) B) and C)
F) All of the above

Question 13

Which of the following is not correct? In a 2006 survey of Ph.D. economists,

Accepted Answer

A)  47 percent favored eliminating the minimum wage.
B)  14 percent would maintain the minimum wage at its current level.
C)  38 percent would increase the minimum wage.
D)  10 percent would decrease the minimum wage.E) A) and B)
F) B) and C)

Question 14

A tax on sellers increases the quantity of the good sold in the market.

Accepted Answer

A) True 
 B)False

Question 15

The tax burden falls more heavily on the side of the market that is more inelastic.

Accepted Answer

A) True 
 B)False

Question 16

When a tax is placed on the sellers of a product, the

Accepted Answer

A)  size of the market decreases.
B)  effective price received by sellers decreases, and the price paid by buyers increases.
C)  supply of the product decreases.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 17

Which of the following statements is correct?

Accepted Answer

A)  A tax levied on buyers will never be partially paid by sellers.
B)  Who actually pays a tax depends on the price elasticities of supply and demand.
C)  Government can decide who actually pays a tax.
D)  A tax levied on sellers always will be passed on completely to buyers.E) A) and B)
F) All of the above

Question 18

FICA is an example of a payroll tax, which is a tax on the wages that firms pay their workers.

Accepted Answer

A) True 
 B)False

Question 19

Figure 6-22 
-Refer to Figure 6-22. The amount of the tax per unit is

Accepted Answer

A)  $2.00.
B)  $1.50.
C)  $3.00.
D)  $0.50.E) B) and C)
F) A) and D)

Question 20

Figure 6-27
This figure shows the market demand and market supply curves for good Z. 
-Refer to Figure 6-27. Suppose a tax of $3 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Accepted Answer

A)  less than 8 units
B)  8 units
C)  between 8 units and 10 units
D)  greater than 10 unitsE) B) and D)
F) All of the above

Exam 6: Supply, Demand, and Government Policies

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Price floors are typically imposed to benefit buyers.

Correct AnswerverifiedShow Answer

FICA is an example of a payroll tax, which is a tax on the wages that firms pay their workers.

Correct AnswerverifiedShow Answer

If a price floor is not binding, then

Correct AnswerverifiedShow Answer

Price ceilings are typically imposed to benefit buyers.

Correct AnswerverifiedShow Answer

Which of the following is not correct? In a 2006 survey of Ph.D. economists,

Correct AnswerverifiedShow Answer

Figure 6-26 -Refer to Figure 6-26. How much tax revenue does this tax produce for the government?

Correct AnswerverifiedShow Answer

The tax burden falls more heavily on the side of the market that is more inelastic.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Price ceilings are typically imposed to benefit sellers.

Correct AnswerverifiedShow Answer

Figure 6-17 This figure shows the market demand and market supply curves for good Y -Refer to Figure 6-17. A government-imposed price of $12 in this market is an example of a

Correct AnswerverifiedShow Answer

The price paid by buyers in a market will increase if the government (i) Increases a binding price floor in that market. (ii) Increases a binding price ceiling in that market. (iii) Decreases a tax on the good sold in that market.

Correct AnswerverifiedShow Answer

Figure 6-5 -Refer to Figure 6-5. Suppose the market is initially in equilibrium. Then the government imposes a price control, as represented by the solid horizontal line on the graph. If the price control is a price floor, then the price control

Correct AnswerverifiedShow Answer

When a tax is placed on the sellers of a product, the

Correct AnswerverifiedShow Answer

A tax on sellers increases the quantity of the good sold in the market.

Correct AnswerverifiedShow Answer

Figure 6-33 -Refer to Figure 6-33. Suppose a $4 per-unit tax is imposed on the sellers of this good. How many units of this good will be sold after the tax is imposed?

Correct AnswerverifiedWith a $4 per-unit t...View AnswerShow Answer

Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $3 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Correct AnswerverifiedShow Answer

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. If the government imposes a price floor of $7 on this market, then there will be

Correct AnswerverifiedShow Answer

Figure 6-22 -Refer to Figure 6-22. The amount of the tax per unit is

Correct AnswerverifiedShow Answer

A $0.10 tax levied on the sellers of chocolate bars will cause the

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
With a $4 per-unit t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified