Question 1

Which of the following is not an example of a public policy?

Accepted Answer

A)   rent-control laws
B)   minimum-wage laws
C)   taxes
D)   equilibrium laws

Question 2

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

Accepted Answer

A)   The effective price received by sellers is $0.40 per bottle less than it was before the tax.
B)   Sixty percent of the burden of the tax falls on sellers.
C)   This tax causes the demand curve for perfume to shift downward by $1.00 at each quantity of perfume.
D)   All of the above are correct.

Question 3

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.

Question 4

Figure 6-27 
-Refer to Figure 6-27.If the government places a $2 tax in the market,the seller bears $1 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 5

A price ceiling set below the equilibrium price is binding.

Accepted Answer

A) True 
 B)False

Question 6

A price floor will be binding only if it is set

Accepted Answer

A)   equal to the equilibrium price.
B)   above the equilibrium price.
C)   below the equilibrium price.
D)   either above or below the equilibrium price.

Question 7

Table 6-2
 
-Refer to Table 6-2.A price ceiling set at $15 will

Accepted Answer

A)   be binding and will result in a shortage of 50 units.
B)   be binding and will result in a shortage of 100 units.
C)   be binding and will result in a shortage of 125 units.
D)   not be binding.

Question 8

Figure 6-4 
-Refer to Figure 6-4.If the government set a price floor at $17,would there be a shortage or surplus,and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 9

Figure 6-17 
-Refer to Figure 6-17.Suppose buyers,rather than sellers,were required to pay this tax (in the same amount per unit as shown in the graph) .Relative to the tax on sellers,the tax on buyers would result in

Accepted Answer

A)   buyers bearing a larger share of the tax burden.
B)   sellers bearing a smaller share of the tax burden.
C)   the same amount of tax revenue for the government.
D)   Both a and b are correct.

Question 10

Suppose the government wants to encourage Americans to exercise more,so it imposes a binding price ceiling on the market for in-home treadmills.As a result,

Accepted Answer

A)   the demand for treadmills will increase.
B)   the supply of treadmills will decrease.
C)   a shortage of treadmills will develop.
D)   All of the above are correct.

Question 11

Figure 6-16 
-Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.What will be the new equilibrium quantity in this market?

Accepted Answer

A)   less than 25 units
B)   25 units
C)   between 25 units and 50 units
D)   greater than 50 units

Question 12

Figure 6-5 
-Refer to Figure 6-5.Suppose a $3 per-unit tax is imposed on the sellers of this good.How much is the burden of this tax on the sellers in this market?

Accepted Answer

The burden...

Question 13

If a tax is levied on the sellers of a product,then the demand curve will

Accepted Answer

A)   shift down.
B)   shift up.
C)   become flatter.
D)   not shift.

Question 14

When a binding price floor is imposed on a market,

Accepted Answer

A)   price no longer serves as a rationing device.
B)   the quantity supplied at the price floor exceeds the quantity that would have been supplied without the price floor.
C)   only some sellers benefit.
D)   All of the above are correct.

Question 15

The burden that results from a tax on yachts falls more heavily on the buyers of yachts than on the sellers of yachts.

Accepted Answer

A) True 
 B)False

Question 16

Economists generally believe that rent control is

Accepted Answer

A)   an efficient and fair way to help the poor.
B)   inefficient but the best available means of solving a serious social problem.
C)   a highly inefficient way to help the poor raise their standard of living.
D)   an efficient way to allocate housing,but not a good way to help the poor.

Question 17

Table 6-1
 
-Refer to Table 6-1.Suppose the government imposes a price ceiling of $5 on this market.What will be the size of the shortage in this market?

Accepted Answer

A)   0 units
B)   2 units
C)   8 units
D)   10 units

Question 18

Figure 6-18 
-Refer to Figure 6-18.The price paid by buyers after the tax is imposed is

Accepted Answer

A)   $2.50.
B)   $3.50.
C)   $5.00.
D)   $6.00.

Question 19

An example of a price floor is

Accepted Answer

A)   the regulation of gasoline prices in the U.S.in the 1970s.
B)   rent control.
C)   the minimum wage.
D)   any restriction on price that leads to a shortage.

Question 20

Table 6-1
 
-Refer to Table 6-1.Suppose the government imposes a price ceiling of $1 on this market.What will be the size of the shortage in this market?

Accepted Answer

A)   0 units
B)   2 units
C)   8 units
D)   10 units

Exam 6: Supply,demand,and Government Policies

Table 6-1 -Refer to Table 6-1.Suppose the government imposes a price ceiling of $1 on this market.What will be the size of the shortage in this market?

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Table 6-1 -Refer to Table 6-1.Suppose the government imposes a price ceiling of $5 on this market.What will be the size of the shortage in this market?

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Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the seller bears $1 of the tax burden.

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Table 6-2 -Refer to Table 6-2.A price ceiling set at $15 will

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Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

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A price ceiling set below the equilibrium price is binding.

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Figure 6-5 -Refer to Figure 6-5.Suppose a $3 per-unit tax is imposed on the sellers of this good.How much is the burden of this tax on the sellers in this market?

Correct AnswerverifiedThe burden...View AnswerShow Answer

When a binding price floor is imposed on a market,

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Figure 6-18 -Refer to Figure 6-18.The price paid by buyers after the tax is imposed is

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Figure 6-17 -Refer to Figure 6-17.Suppose buyers,rather than sellers,were required to pay this tax (in the same amount per unit as shown in the graph) .Relative to the tax on sellers,the tax on buyers would result in

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An example of a price floor is

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Economists generally believe that rent control is

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Figure 6-4 -Refer to Figure 6-4.If the government set a price floor at $17,would there be a shortage or surplus,and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at...View AnswerShow Answer

Suppose the government wants to encourage Americans to exercise more,so it imposes a binding price ceiling on the market for in-home treadmills.As a result,

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

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Figure 6-16 -Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.What will be the new equilibrium quantity in this market?

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If a tax is levied on the sellers of a product,then the demand curve will

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A price floor will be binding only if it is set

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Which of the following is not an example of a public policy?

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The burden that results from a tax on yachts falls more heavily on the buyers of yachts than on the sellers of yachts.

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The burden...
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A price floor set at...
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