Question 1

Price floors are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 2

Figure 6-2
  ​
-Refer to Figure 6-2. The price ceiling

Accepted Answer

A)  causes a shortage of 60 units of the good.
B)  makes it necessary for sellers to ration the good using a mechanism other than price.
C)  is not binding because it is set below the equilibrium price.
D)  causes a shortage of 30 units of the good.E) A) and B)
F) B) and D)

Question 3

Scenario 6-2
Suppose demand for a product is given by the equation
QS1U1P1D S1S1P0= 120 - 4P
and supply for the product is given by the equation
QS1U1P1S S1S1P0= 4P
-The following table shows the demand and supply schedules in a particular market.
If the government sets a price floor $2 above the equilibrium price, how many units will be sold in this market?
 $$\begin{array} { | l | l | l | } 
\hline \text { Price } & \begin{array} { l } 
\text { Quantity } \
\text { Demanded }
\end{array} & \begin{array} { l } 
\text { Quantity } \
\text { Supplied }
\end{array} \
\hline \$ 1 & 8 & 3 \
\hline \$ 3 & 6 & 6 \
\hline \$ 5 & 4 & 9 \
\hline \$ 7 & 2 & 12 \
\hline \$ 9 & 0 & 15 \
\hline
\end{array}$$

Accepted Answer

The equilibrium price is $3, so the pric...

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Figure 6-20
  ​
-Refer to Figure 6-20. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

Accepted Answer

Buyers wil...

Question 7

The price paid by buyers 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)  increases a tax on the good sold in that market.E) A) and B)
F) A) and D)

Question 8

​Price ceilings are never binding when set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 9

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

Accepted Answer

A)  demand, raising both the equilibrium price and quantity in the market for artificially sweetened beverages.
B)  demand, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially sweetened beverages.
C)  supply, raising the equilibrium price and lowering the equilibrium quantity in the market for artificially sweetened beverages.
D)  supply, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially sweetened beverages.E) A) and B)
F) C) and D)

Question 10

A binding minimum wage may not help all workers, but it does not hurt any workers.

Accepted Answer

A) True 
 B)False

Question 11

If a nonbinding price floor 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) A) and D)
F) B) and C)

Question 12

A tax on sellers and an increase in input prices affect the supply curve in the same way.

Accepted Answer

A) True 
 B)False

Question 13

Since the FICA tax is split equally between employers and employees, we can conclude that the incidence of this tax is also equally shared.
​

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-17
  ​
-Refer to Figure 6-17. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 15

A tax on the buyers of smart watches encourages

Accepted Answer

A)  sellers to supply a smaller quantity at every price.
B)  buyers to demand a smaller quantity at every price.
C)  sellers to supply a larger quantity at every price.
D)  buyers to demand a larger quantity at every price.E) C) and D)
F) B) and C)

Question 16

Since a tax imposed on buyers of a product only affects demand, such a tax has no impact on sellers in that market.
​

Accepted Answer

A) True 
 B)False

Question 17

If a price ceiling is not binding, then it will have no effect on the market.

Accepted Answer

A) True 
 B)False

Question 18

Since half of the FICA tax is paid by firms and the other half is paid by workers, the burden of the tax must fall equally on firms and workers.

Accepted Answer

A) True 
 B)False

Question 19

A price floor set above the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

A tax on sellers and an increase in input prices affect the supply curve in the same way.

Correct Answer
verified

Figure 6-2 -Refer to Figure 6-2. The price ceiling

Correct Answer
verified

Since half of the FICA tax is paid by firms and the other half is paid by workers, the burden of the tax must fall equally on firms and workers.

Correct Answer
verified

If a price ceiling is not binding, then it will have no effect on the market.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Price floors are typically imposed to benefit sellers.

Correct Answer
verified

Figure 6-20 -Refer to Figure 6-20. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

Correct Answer
verified
Buyers wil...
View Answer

Correct Answer
verified
The equilibrium price is $3, so the pric...
View Answer

Since the FICA tax is split equally between employers and employees, we can conclude that the incidence of this tax is also equally shared.

Correct Answer
verified

Figure 6-17 -Refer to Figure 6-17. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Correct Answer
verified

A price floor set above the equilibrium price causes a surplus in the market.

Correct Answer
verified

A tax on the buyers of smart watches encourages

Correct Answer
verified

A binding minimum wage may not help all workers, but it does not hurt any workers.

Correct Answer
verified

Price ceilings are never binding when set above the equilibrium price.

Correct Answer
verified

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

Correct Answer
verified

Since a tax imposed on buyers of a product only affects demand, such a tax has no impact on sellers in that market.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

A tax on sellers and an increase in input prices affect the supply curve in the same way.

Correct AnswerverifiedShow Answer

Figure 6-2 ​ -Refer to Figure 6-2. The price ceiling

Correct AnswerverifiedShow Answer

Since half of the FICA tax is paid by firms and the other half is paid by workers, the burden of the tax must fall equally on firms and workers.

Correct AnswerverifiedShow Answer

If a price ceiling is not binding, then it will have no effect on the market.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Price floors are typically imposed to benefit sellers.

Correct AnswerverifiedShow Answer

Figure 6-20 ​ -Refer to Figure 6-20. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

Correct AnswerverifiedBuyers wil...View AnswerShow Answer

Correct AnswerverifiedThe equilibrium price is $3, so the pric...View AnswerShow Answer

Since the FICA tax is split equally between employers and employees, we can conclude that the incidence of this tax is also equally shared. ​

Correct AnswerverifiedShow Answer

Figure 6-17 ​ -Refer to Figure 6-17. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Correct AnswerverifiedShow Answer

A price floor set above the equilibrium price causes a surplus in the market.

Correct AnswerverifiedShow Answer

A tax on the buyers of smart watches encourages

Correct AnswerverifiedShow Answer

A binding minimum wage may not help all workers, but it does not hurt any workers.

Correct AnswerverifiedShow Answer

​Price ceilings are never binding when set above the equilibrium price.

Correct AnswerverifiedShow Answer

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

Correct AnswerverifiedShow Answer

Since a tax imposed on buyers of a product only affects demand, such a tax has no impact on sellers in that market. ​

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Figure 6-2 -Refer to Figure 6-2. The price ceiling

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Figure 6-20 -Refer to Figure 6-20. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

Correct Answer
verified
Buyers wil...
View Answer

Correct Answer
verified
The equilibrium price is $3, so the pric...
View Answer

Since the FICA tax is split equally between employers and employees, we can conclude that the incidence of this tax is also equally shared.

Correct Answer
verified

Figure 6-17 -Refer to Figure 6-17. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Price ceilings are never binding when set above the equilibrium price.

Correct Answer
verified

Correct Answer
verified

Since a tax imposed on buyers of a product only affects demand, such a tax has no impact on sellers in that market.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified