Question 1

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 C)
F) B) and C)

Question 2

Minimum-wage laws dictate

Accepted Answer

A)   the exact wage that firms must pay workers.
B)   a maximum wage that firms may pay workers.
C)   a minimum wage that firms may pay workers.
D)   both a minimum wage and a maximum wage that firms may pay workers.E) A) and B)
F) B) and C)

Question 3

Figure 6-21 
-Refer to Figure 6-22.As the figure is drawn,who sends the tax payment to the government?

Accepted Answer

A)   The buyers send the tax payment.
B)   The sellers send the tax payment.
C)   A portion of the tax payment is sent by the buyers,and the remaining portion is sent by the sellers.
D)   The question of who sends the tax payment cannot be determined from the figure.E) B) and C)
F) B) and D)

Question 4

Which of the following statements about the effects of rent control is correct?

Accepted Answer

A)   The short-run effect of rent control is a surplus of apartments,and the long-run effect of rent control is a shortage of apartments.
B)   The short-run effect of rent control is a relatively small shortage of apartments,and the long-run effect of rent control is a larger shortage of apartments.
C)   In the long run,rent control leads to a shortage of apartments and an improvement in the quality of available apartments.
D)   The effects of rent control are very noticeable to the public in the short run because the primary effects of rent control occur very quickly.E) B) and C)
F) A) and D)

Question 5

One common example of a price floor is the minimum wage.

Accepted Answer

A) True 
 B)False

Question 6

A binding price floor causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 7

Table 6-2
 
-Refer to Table 6-2.A price floor set at $5 will

Accepted Answer

A)   be binding and will result in a surplus of 50 units.
B)   be binding and will result in a surplus of 75 units.
C)   be binding and will result in a surplus of 125 units.
D)   not be binding.E) C) and D)
F) B) and D)

Question 8

The economy contains many labor markets for different types of workers.

Accepted Answer

A) True 
 B)False

Question 9

Figure 6-25
 
-Refer to Figure 6-25.In which market will the tax burden be most equally divided between buyers and sellers?

Accepted Answer

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

Question 10

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

Accepted Answer

A)   downward shift of the supply curve.
B)   upward shift of the supply curve.
C)   movement up and to the right along the supply curve.
D)   movement down and to the left along the supply curve.E) A) and B)
F) B) and D)

Question 11

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.E) A) and B)
F) C) and D)

Question 12

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 13

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Accepted Answer

A) True 
 B)False

Question 14

Table 6-2
 
-Refer to Table 6-2.A price ceiling set at $5 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 75 units.
C)   be binding and will result in a shortage of 125 units.
D)   not be binding.E) A) and B)
F) B) and C)

Question 15

Price ceilings and price floors that are binding

Accepted Answer

A)   are desirable because they make markets more efficient and more fair.
B)   cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price.
C)   can have the effect of restoring a market to equilibrium.
D)   are imposed because they can make the poor in the economy better off without causing adverse effects.E) B) and C)
F) None of the above

Question 16

Buyers and sellers always share the burden of a tax equally.

Accepted Answer

A) True 
 B)False

Question 17

The minimum wage is an example of a

Accepted Answer

A)   price ceiling.
B)   price floor.
C)   wage subsidy.
D)   tax.E) B) and D)
F) A) and B)

Question 18

Figure 6-7 
-Refer to Figure 6-7.For a price ceiling to be binding in this market,it would have to be set at

Accepted Answer

A)   any price below $6.
B)   a price between $3 and $6.
C)   a price between $6 and $9.
D)   any price above $6.E) A) and D)
F) C) and D)

Question 19

All buyers benefit from a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 20

The imposition of a binding price ceiling on a market causes quantity demanded to be

Accepted Answer

A)   greater than quantity supplied.
B)   less than quantity supplied.
C)   equal to quantity supplied.
D)   Both a) and b) are possible.E) A) and C)
F) B) and D)

Exam 6: Supply,demand,and Government Policies

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

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All buyers benefit from a binding price ceiling.

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A tax of $1 on sellers shifts the supply curve upward by exactly $1.

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

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Figure 6-7 -Refer to Figure 6-7.For a price ceiling to be binding in this market,it would have to be set at

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Which of the following statements about the effects of rent control is correct?

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One common example of a price floor is the minimum wage.

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

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Buyers and sellers always share the burden of a tax equally.

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Minimum-wage laws dictate

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Price ceilings and price floors that are binding

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

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Figure 6-25 -Refer to Figure 6-25.In which market will the tax burden be most equally divided between buyers and sellers?

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Figure 6-21 -Refer to Figure 6-22.As the figure is drawn,who sends the tax payment to the government?

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The imposition of a binding price ceiling on a market causes quantity demanded to be

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Table 6-2 -Refer to Table 6-2.A price ceiling set at $5 will

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Table 6-2 -Refer to Table 6-2.A price floor set at $5 will

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A binding price floor causes a shortage in the market.

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The economy contains many labor markets for different types of workers.

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The minimum wage is an example of a

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