Question 1

A key lesson from the payroll tax is that the

Accepted Answer

A)  tax is a tax solely on workers.
B)  tax is a tax solely on firms that hire workers.
C)  tax eliminates any wedge that might exist between the wage that firms pay and the wage that workers receive.
D)  true burden of a tax cannot be legislated.E) A) and D)
F) B) and C)

Question 2

Figure 6-25 
-Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Accepted Answer

A)  $5.
B)  $6.
C)  $7.
D)  $8.E) A) and B)
F) A) and C)

Question 3

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 4

Renters of rent-controlled apartments will likely benefit from both lower rents and higher quality of apartments.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  A price ceiling set at $12 would be binding, but a price ceiling set at $8 would not be binding.
B)  A price floor set at $8 would be binding, but a price ceiling set at $8 would not be binding.
C)  A price ceiling set at $9 would result in a surplus.
D)  A price floor set at $11 would result in a surplus.E) A) and D)
F) A) and C)

Question 6

If the government wants to reduce the burning of fossil fuels, it should impose a tax on

Accepted Answer

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

Question 7

Which of the following is not correct?

Accepted Answer

A)  Economists have two roles: scientist and policy adviser.
B)  As scientists, economists develop and test theories to explain the world around them.
C)  Economic policies rarely have effects that their architects did not intend or anticipate.
D)  As policy advisers, economists use their theories to help change the world for the better.E) B) and C)
F) A) and D)

Question 8

Figure 6-22 
-Refer to Figure 6-22. Suppose the same supply and demand curves apply, and a tax of the same amount per unit as shown here is imposed. Now, however, the buyers of the good, rather than the sellers, are required to pay the tax to the government. After the buyers pay the tax, relative to the case depicted in the figure, the burden on buyers will be

Accepted Answer

A)  larger, and the burden on sellers will be smaller.
B)  smaller, and the burden on sellers will be larger.
C)  the same, and the burden on sellers will be the same.
D)  The relative burdens in the two cases cannot be determined without further information.E) B) and D)
F) B) and C)

Question 9

If a price ceiling 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)  the market will be less efficient than it would be without the price ceiling.
D)  there will be no effect on the market price or quantity sold.E) None of the above
F) B) and C)

Question 10

A binding price floor causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 11

Figure 6-18
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-18. The per-unit burden of the tax on sellers is

Accepted Answer

A)  $6.
B)  $8.
C)  $10.
D)  $14.E) None of the above
F) C) and D)

Question 12

Which of the following is correct? A tax burden

Accepted Answer

A)  falls more heavily on the side of the market that is more elastic.
B)  falls more heavily on the side of the market that is less elastic.
C)  falls more heavily on the side of the market that is closest to unit elastic.
D)  is distributed independently of the relative elasticities of supply and demand.E) A) and B)
F) None of the above

Question 13

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) A) and C)
F) All of the above

Question 14

Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

Accepted Answer

A)  Buyers bear the entire burden of the tax.
B)  Sellers bear the entire burden of the tax.
C)  Buyers and sellers share the burden of the tax.
D)  We have to know whether it is the buyers or the sellers that are required to pay the tax to the government in order to make this determination.E) A) and D)
F) All of the above

Question 15

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Accepted Answer

A) True 
 B)False

Question 16

Figure 6-3
Panel (a) 
Panel (b)   
-Refer to Figure 6-3. A binding 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) All of the above

Question 17

​In a market with a binding price control,

Accepted Answer

A)  there is an imbalance between the quantity supplied by sellers and the quantity demanded by buyers.
B)  ​the costs of production are fully reflected in the price paid.
C)  ​the price observe reflects the scarcity of the good.
D)  ​all of the above are true.E) A) and D)
F) B) and C)

Question 18

Figure 6-14 
-Refer to Figure 6-14. If the horizontal line on the graph represents a price ceiling, then the price ceiling is

Accepted Answer

A)  binding and creates a shortage of 20 units of the good.
B)  binding and creates a shortage of 40 units of the good.
C)  not binding but creates a shortage of 40 units of the good.
D)  not binding, and there will be no surplus or shortage of the good.E) None of the above
F) All of the above

Question 19

When a tax is placed on the buyers of lemonade, the

Accepted Answer

A)  sellers bear the entire burden of the tax.
B)  buyers bear the entire burden of the tax.
C)  burden of the tax will be always be equally divided between the buyers and the sellers.
D)  burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal.E) A) and B)
F) B) and D)

Question 20

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

Correct Answer
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When a tax is placed on the buyers of lemonade, the

Correct Answer
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The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Correct Answer
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Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. A binding price floor is shown in

Correct Answer
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Renters of rent-controlled apartments will likely benefit from both lower rents and higher quality of apartments.

Correct Answer
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If a price ceiling is not binding, then

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

Correct Answer
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Figure 6-25 -Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Correct Answer
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If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Correct Answer
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Which of the following is correct? A tax burden

Correct Answer
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Which of the following is not correct?

Correct Answer
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Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The per-unit burden of the tax on sellers is

Correct Answer
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Figure 6-14 -Refer to Figure 6-14. If the horizontal line on the graph represents a price ceiling, then the price ceiling is

Correct Answer
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In a market with a binding price control,

Correct Answer
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If the government wants to reduce the burning of fossil fuels, it should impose a tax on

Correct Answer
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A binding price floor causes a shortage in the market.

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

Correct Answer
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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
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A key lesson from the payroll tax is that the

Correct Answer
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Exam 6: Supply, Demand, and Government Policies

Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

Correct AnswerverifiedShow Answer

When a tax is placed on the buyers of lemonade, the

Correct AnswerverifiedShow Answer

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Correct AnswerverifiedShow Answer

Figure 6-3 Panel (a) Panel (b) -Refer to Figure 6-3. A binding price floor is shown in

Correct AnswerverifiedShow Answer

Renters of rent-controlled apartments will likely benefit from both lower rents and higher quality of apartments.

Correct AnswerverifiedShow Answer

If a price ceiling is not binding, then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 6-25 -Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Correct AnswerverifiedShow Answer

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Correct AnswerverifiedShow Answer

Which of the following is correct? A tax burden

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The per-unit burden of the tax on sellers is

Correct AnswerverifiedShow Answer

Figure 6-14 -Refer to Figure 6-14. If the horizontal line on the graph represents a price ceiling, then the price ceiling is

Correct AnswerverifiedShow Answer

​In a market with a binding price control,

Correct AnswerverifiedShow Answer

If the government wants to reduce the burning of fossil fuels, it should impose a tax on

Correct AnswerverifiedShow Answer

A binding price floor causes a shortage in the market.

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

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

A key lesson from the payroll tax is that the

Correct AnswerverifiedShow Answer

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In a market with a binding price control,

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