Question 1

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) A) and B)

Question 2

When policymakers set prices by legal decree, they obscure the signals that normally guide the allocation of society's resources.

Accepted Answer

A) True 
 B)False

Question 3

If a nonbinding price ceiling is imposed on a market, then the

Accepted Answer

A)  quantity sold in the market will decrease.
B)  quantity sold in the market will stay the same.
C)  price in the market will increase.
D)  price in the market will decrease.E) None of the above
F) A) and B)

Question 4

Figure 6-19 
-Refer to Figure 6-19. 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 C)
F) All of the above

Question 5

A binding price floor will reduce a firm's total revenue

Accepted Answer

A)  always.
B)  when demand is elastic.
C)  when demand is inelastic.
D)  never.E) A) and B)
F) All of the above

Question 6

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

Accepted Answer

A)  increases a binding price floor in that market.
B)  increases a binding price ceiling in that market.
C)  decreases a tax on the good sold in that market.
D)  None of the above is correct.E) A) and B)
F) C) and D)

Question 7

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

Accepted Answer

A)  an accumulation of dirt in the interior of rental cars
B)  poor engine maintenance in rental 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) All of the above
F) A) and D)

Question 8

Rent control

Accepted Answer

A)  serves as an example of how a social problem can be alleviated or even solved by government policies.
B)  serves as an example of a price ceiling.
C)  is regarded by most economists as an efficient way of helping the poor.
D)  is the most efficient way to allocate scarce housing resources.E) A) and B)
F) C) and D)

Question 9

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Accepted Answer

A)  Policymakers have studied the effects of the price floor carefully, and they recognize that the price floor is advantageous for society as a whole.
B)  Buyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policy makers into imposing the price floor.
C)  Buyers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor.
D)  Sellers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor.E) A) and B)
F) A) and C)

Question 10

Figure 6-30
Panel (a) 
Panel (b)    Panel (c)  
-Refer to Figure 6-30. In which market will the majority of the tax burden fall on sellers?

Accepted Answer

A)  the market shown in panel (a) .
B)  the market shown in panel (b) .
C)  the market shown in panel (c) .
D)  All of the above are correct.E) B) and D)
F) A) and B)

Question 11

Using the graph shown, in which the vertical distance between points A and B represents the tax in the market, answer the following questions.
a.What was the equilibrium price and quantity in this market before the tax?
b.What is the amount of the tax?
c.How much of the tax will the buyers pay?
d.How much of the tax will the sellers pay?
e.How much will the buyer pay for the product after the tax is imposed?
f. How much will the seller receive after the tax is imposed?
g. As a result of the tax, what has happened to the level of market activity?

Accepted Answer

a.$8; 8,000 units
b.$5
c.$3
d....

Question 12

The minimum wage has its greatest impact on the market for

Accepted Answer

A)  female labor.
B)  older labor.
C)  black labor.
D)  teenage labor.E) All of the above
F) B) and D)

Question 13

Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?

Accepted Answer

A)  Policymakers have studied the effects of the price ceiling carefully, and they recognize that the price ceiling is advantageous for society as a whole.
B)  Buyers of milk, recognizing that the price ceiling is good for them, have pressured policymakers into imposing the price ceiling.
C)  Sellers of milk, recognizing that the price ceiling is good for them, have pressured policymakers into imposing the price ceiling.
D)  Buyers and sellers of milk have agreed that the price ceiling is good for both of them and have therefore pressured policymakers into imposing the price ceiling.E) A) and C)
F) B) and C)

Question 14

Figure 6-26 
-Refer to Figure 6-26. The amount of the tax per unit is

Accepted Answer

A)  $4.
B)  $8.
C)  $14.
D)  $10.E) A) and D)
F) All of the above

Question 15

A tax on buyers shifts the demand curve to the right.

Accepted Answer

A) True 
 B)False

Question 16

In the United States, before OPEC increased the price of crude oil in 1973, there was

Accepted Answer

A)  no price ceiling on gasoline.
B)  a nonbinding price ceiling on gasoline.
C)  a binding price ceiling on gasoline.
D)  a nonbinding price floor on gasoline.E) A) and B)
F) All of the above

Question 17

If a tax is levied on the sellers of a product, then there will be a(n)

Accepted Answer

A)  downward shift of the demand curve.
B)  upward shift of the demand curve.
C)  decrease in quantity demanded.
D)  increase in quantity demanded.E) None of the above
F) B) and C)

Question 18

Figure 6-4 
-Refer to Figure 6-4. A government-imposed price of $16 in this market could be an example of a (i) 
Binding price ceiling.
(ii) 
Non-binding price ceiling.
(iii) 
Binding price floor.
(iv) 
Non-binding price floor.

Accepted Answer

A)  (i)  only
B)  (ii)  only
C)  (i)  and (iv)  only
D)  (ii)  and (iii)  onlyE) B) and C)
F) B) and D)

Question 19

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

Accepted Answer

A) True 
 B)False

Question 20

Figure 6-21 
-Refer to Figure 6-21. The price that buyers pay after the tax is imposed is

Accepted Answer

A)  $8.00.
B)  $9.00.
C)  $10.50.
D)  $12.00.E) None of the above
F) A) and B)

Exam 6: Supply, Demand, and Government Policies

Correct Answer
verified
a.$8; 8,000 units
b.$5
c.$3
d....
View Answer

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

Correct Answer
verified

Figure 6-4 -Refer to Figure 6-4. A government-imposed price of $16 in this market could be an example of a (i) Binding price ceiling. (ii) Non-binding price ceiling. (iii) Binding price floor. (iv) Non-binding price floor.

Correct Answer
verified

In the United States, before OPEC increased the price of crude oil in 1973, there was

Correct Answer
verified

If a nonbinding price ceiling is imposed on a market, then the

Correct Answer
verified

Figure 6-19 -Refer to Figure 6-19. 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

Rent control

Correct Answer
verified

Figure 6-30 Panel (a) Panel (b) Panel (c) -Refer to Figure 6-30. In which market will the majority of the tax burden fall on sellers?

Correct Answer
verified

Figure 6-26 -Refer to Figure 6-26. The amount of the tax per unit is

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

A tax on buyers shifts the demand curve to the right.

Correct Answer
verified

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Correct Answer
verified

A binding price floor will reduce a firm's total revenue

Correct Answer
verified

The minimum wage has its greatest impact on the market for

Correct Answer
verified

If a tax is levied on the sellers of a product, then there will be a(n)

Correct Answer
verified

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

Correct Answer
verified

When policymakers set prices by legal decree, they obscure the signals that normally guide the allocation of society's resources.

Correct Answer
verified

Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?

Correct Answer
verified

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

Correct Answer
verified

Figure 6-21 -Refer to Figure 6-21. The price that buyers pay after the tax is imposed is

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Correct Answerverifieda.$8; 8,000 unitsb.$5c.$3d....View AnswerShow Answer

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

Correct AnswerverifiedShow Answer

Figure 6-4 -Refer to Figure 6-4. A government-imposed price of $16 in this market could be an example of a (i) Binding price ceiling. (ii) Non-binding price ceiling. (iii) Binding price floor. (iv) Non-binding price floor.

Correct AnswerverifiedShow Answer

In the United States, before OPEC increased the price of crude oil in 1973, there was

Correct AnswerverifiedShow Answer

If a nonbinding price ceiling is imposed on a market, then the

Correct AnswerverifiedShow Answer

Figure 6-19 -Refer to Figure 6-19. 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

Rent control

Correct AnswerverifiedShow Answer

Figure 6-30 Panel (a) Panel (b) Panel (c) -Refer to Figure 6-30. In which market will the majority of the tax burden fall on sellers?

Correct AnswerverifiedShow Answer

Figure 6-26 -Refer to Figure 6-26. The amount of the tax per unit is

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

A tax on buyers shifts the demand curve to the right.

Correct AnswerverifiedShow Answer

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Correct AnswerverifiedShow Answer

A binding price floor will reduce a firm's total revenue

Correct AnswerverifiedShow Answer

The minimum wage has its greatest impact on the market for

Correct AnswerverifiedShow Answer

If a tax is levied on the sellers of a product, then there will be a(n)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When policymakers set prices by legal decree, they obscure the signals that normally guide the allocation of society's resources.

Correct AnswerverifiedShow Answer

Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-21 -Refer to Figure 6-21. The price that buyers pay after the tax is imposed is

Correct AnswerverifiedShow Answer

Correct Answer
verified
a.$8; 8,000 units
b.$5
c.$3
d....
View Answer

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