Question 1

If the government wants to reduce smoking, it should impose a tax on

Accepted Answer

A)  buyers of cigarettes.
B)  sellers of cigarettes.
C)  either buyers or sellers of cigarettes.
D)  whichever side of the market is less elastic.E) None of the above
F) C) and D)

Question 2

Sellers of a good bear the larger share of the tax burden when a tax is placed on a product for which the (i) 
Supply is more elastic than the demand.(ii) 
Demand in more elastic than the supply.(iii) 
Tax is placed on the sellers of the product.(iv) 
Tax is placed on the buyers of the product.

Accepted Answer

A)  (i)  only
B)  (ii)  only
C)  (i)  and (iv)  only
D)  (ii)  and (iii)  onlyE) None of the above
F) All of the above

Question 3

To be binding, a price floor must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 4

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

Accepted Answer

A)  1 to 3 percent.
B)  5 to 7 percent.
C)  10 percent.
D)  None of the above is correct because studies show no decrease in teenage employment.E) None of the above
F) A) and B)

Question 5

Table 6-2
   Price  Quantity  Denanded  Quantity  Sugplied $102500$520075$10150150$15100225$2050300$250375\begin{array} { | c | c | c | } \hline 	ext { Price } & \begin{array} { c } 	ext { Quantity } \	ext { Denanded }\end{array} & \begin{array} { c } 	ext { Quantity } \	ext { Sugplied }\end{array} \\hline \$ 10 & 250 & 0\\hline \$ 5 & 200 & 75 \\hline \$ 10 & 150 & 150 \\hline \$ 15 & 100 & 225 \\hline \$ 20 & 50 & 300 \\hline \$ 25 & 0 & 375 \\hline\end{array} Price $10$5$10$15$20$25​ Quantity  Denanded ​250200150100500​ Quantity  Sugplied ​075150225300375​​ 
-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) B) and D)
F) All of the above

Question 6

Price floors are typically imposed to benefit buyers.

Accepted Answer

A) True 
 B)False

Question 7

Figure 6-23 
-Refer to Figure 6-23. The price paid by buyers after the tax is imposed is

Accepted Answer

A)  $8.
B)  $10.
C)  $14.
D)  $18.E) A) and D)
F) C) and D)

Question 8

A tax on buyers will shift the

Accepted Answer

A)  demand curve upward by the amount of the tax.
B)  demand curve downward by the amount of the tax.
C)  supply curve upward by the amount of the tax.
D)  supply curve downward by the amount of the tax.E) All of the above
F) C) and D)

Question 9

A binding minimum wage tends to

Accepted Answer

A)  cause a labor surplus.
B)  cause unemployment.
C)  have the greatest impact in the market for teenage labor.
D)  All of the above are correct.E) None of the above
F) A) and B)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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 12

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

Accepted Answer

A)  a smaller quantity of the good is bought and sold.
B)  a smaller quantity of the good is demanded.
C)  a larger quantity of the good is supplied.
D)  the price rises above the previous equilibrium.E) C) and D)
F) A) and C)

Question 13

A price ceiling set below the equilibrium price causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-3
 
-Refer to Figure 6-3. A nonbinding 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) A) and B)
F) C) and D)

Question 15

An alternative to rent-control laws that would not reduce the quantity of housing supplied is

Accepted Answer

A)  the payment by government of a fraction of a poor family's rent.
B)  higher taxes on rental income earned by landlords.
C)  a policy that prevents landlords from evicting tenants.
D)  a policy that allows government to confiscate residential property for the purpose of commercial development.E) All of the above
F) None of the above

Question 16

If a tax is levied on the buyers of a product, then the supply curve will

Accepted Answer

A)  not shift.
B)  shift up.
C)  shift down.
D)  become flatter.E) A) and B)
F) None of the above

Question 17

In an unregulated labor market, the wage adjusts to balance labor supply and labor demand.

Accepted Answer

A) True 
 B)False

Question 18

Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

Accepted Answer

A)  with rent control, the government guarantees landlords a minimum level of profit.
B)  they become resigned to the fact that many of their apartments are going to be vacant at any given time.
C)  with shortages and waiting lists, they have no incentive to maintain and improve their property.
D)  with rent control, it becomes the government's responsibility to maintain rental housing.E) None of the above
F) B) and C)

Question 19

To say that a price ceiling is binding is to say that the price ceiling

Accepted Answer

A)  results in a surplus.
B)  is set above the equilibrium price.
C)  causes quantity demanded to exceed quantity supplied.
D)  All of the above are correct.E) A) and D)
F) B) and D)

Question 20

Suppose that a tax is placed on books. If the sellers pay the majority of the tax, then we know that the

Accepted Answer

A)  demand is more inelastic than the supply.
B)  supply is more inelastic than the demand.
C)  government has required that buyers remit the tax payments.
D)  government has required that sellers remit the tax payments.E) A) and D)
F) A) and B)

Exam 6: Supply, Demand, and Government Policies

In an unregulated labor market, the wage adjusts to balance labor supply and labor demand.

Correct Answer
verified

Suppose that a tax is placed on books. If the sellers pay the majority of the tax, then we know that the

Correct Answer
verified

A price ceiling set below the equilibrium price causes a shortage in the market.

Correct Answer
verified

Figure 6-23 -Refer to Figure 6-23. The price paid by buyers after the tax is imposed is

Correct Answer
verified

Figure 6-3 -Refer to Figure 6-3. A nonbinding price floor is shown in

Correct Answer
verified

To be binding, a price floor must be set above the equilibrium price.

Correct Answer
verified

Price floors are typically imposed to benefit buyers.

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

If the government wants to reduce smoking, it should impose a tax on

Correct Answer
verified

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

Correct Answer
verified

An alternative to rent-control laws that would not reduce the quantity of housing supplied is

Correct Answer
verified

A tax on buyers will shift the

Correct Answer
verified

Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

Correct Answer
verified

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

Correct Answer
verified

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

Correct Answer
verified

To say that a price ceiling is binding is to say that the price ceiling

Correct Answer
verified

Sellers of a good bear the larger share of the tax burden when a tax is placed on a product for which the (i) Supply is more elastic than the demand.(ii) Demand in more elastic than the supply.(iii) Tax is placed on the sellers of the product.(iv) Tax is placed on the buyers of the product.

Correct Answer
verified

A binding minimum wage tends to

Correct Answer
verified

Correct Answer
verified

If a tax is levied on the buyers of a product, then the supply curve will

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

In an unregulated labor market, the wage adjusts to balance labor supply and labor demand.

Correct AnswerverifiedShow Answer

Suppose that a tax is placed on books. If the sellers pay the majority of the tax, then we know that the

Correct AnswerverifiedShow Answer

A price ceiling set below the equilibrium price causes a shortage in the market.

Correct AnswerverifiedShow Answer

Figure 6-23 -Refer to Figure 6-23. The price paid by buyers after the tax is imposed is

Correct AnswerverifiedShow Answer

Figure 6-3 -Refer to Figure 6-3. A nonbinding price floor is shown in

Correct AnswerverifiedShow Answer

To be binding, a price floor must be set above the equilibrium price.

Correct AnswerverifiedShow Answer

Price floors are typically imposed to benefit buyers.

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

If the government wants to reduce smoking, it should impose a tax on

Correct AnswerverifiedShow Answer

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

Correct AnswerverifiedShow Answer

An alternative to rent-control laws that would not reduce the quantity of housing supplied is

Correct AnswerverifiedShow Answer

A tax on buyers will shift the

Correct AnswerverifiedShow Answer

Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

Correct AnswerverifiedShow Answer

To say that a price ceiling is binding is to say that the price ceiling

Correct AnswerverifiedShow Answer

Sellers of a good bear the larger share of the tax burden when a tax is placed on a product for which the (i) Supply is more elastic than the demand.(ii) Demand in more elastic than the supply.(iii) Tax is placed on the sellers of the product.(iv) Tax is placed on the buyers of the product.

Correct AnswerverifiedShow Answer

A binding minimum wage tends to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a tax is levied on the buyers of a product, then the supply curve will

Correct AnswerverifiedShow Answer

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