Question 1

Figure 6-26 
-Refer to Figure 6-26.A price ceiling set at $30 would create a shortage of 20 units.

Accepted Answer

A) True 
 B)False

Question 2

A binding price floor will reduce a firm's total revenue

Accepted Answer

A)   always.
B)   when demand is elastic.
C)   when demand is inelastic.
D)   never.E) B) and C)
F) A) and D)

Question 3

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

Accepted Answer

A)   binding price floor in that market.
B)   binding price ceiling in that market.
C)   tax on the good sold in that market.
D)   None of the above is correct.E) C) and D)
F) A) and D)

Question 4

The minimum wage

Accepted Answer

A)   is an example of a price ceiling.
B)   has its greatest impact on middle-aged and immigrant workers.
C)   does not apply to unpaid internships.
D)   does not affect the quantity of labor demanded;it only affects the quantity of labor supplied.E) B) and C)
F) A) and D)

Question 5

Figure 6-24
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-24.Suppose D1 represents the demand curve for gasoline in both the short run and long run,S1 represents the supply curve for gasoline in the short run,and S2 represents the supply curve for gasoline in the long run.After the imposition of the $2,the price paid by buyers will be

Accepted Answer

A)   higher in the long run than in the short run.
B)   higher in the short run than in the long run.
C)   equivalent in the short run and the long run.
D)   unable to be determined without additional information.E) A) and B)
F) All of the above

Question 6

Because the supply and demand of housing are inelastic in the short run,the initial shortage caused by rent control is large.

Accepted Answer

A) True 
 B)False

Question 7

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Accepted Answer

A) True 
 B)False

Question 8

A tax on the buyers of sofas

Accepted Answer

A)   increases the size of the sofa market.
B)   decreases the size of the sofa market.
C)   has no effect on the size of the sofa market.
D)   may increase,decrease,or have no effect on the size of the sofa market.E) A) and D)
F) B) and C)

Question 9

The long-run effects of rent controls are a good illustration of the principle that

Accepted Answer

A)   society faces a short-run tradeoff between unemployment and inflation.
B)   the cost of something is what you give up to get it.
C)   people respond to incentives.
D)   government can sometimes improve on market outcomes.E) All of the above
F) None of the above

Question 10

Who bears the majority of a tax burden depends on the relative elasticity of supply and demand.

Accepted Answer

A) True 
 B)False

Question 11

Figure 6-16 
-Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.Which of the following is correct?

Accepted Answer

A)   Buyers and sellers will share the burden of the tax equally.
B)   Buyers will bear more of the burden of the tax than sellers will.
C)   Sellers will bear more of the burden of the tax than buyers will.
D)   Any of the above is possible.E) A) and D)
F) A) and B)

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

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

Question 14

As rationing mechanisms,prices

Accepted Answer

A)   and long lines are efficient.
B)   are efficient,but long lines are inefficient.
C)   are inefficient,but long lines are efficient.
D)   and long lines are inefficient.E) All of the above
F) C) and D)

Question 15

When a binding price floor is imposed on a market for a good,some people who want to sell the good cannot do so.

Accepted Answer

A) True 
 B)False

Question 16

If the government removes a binding price ceiling from a market,then the price paid by buyers will

Accepted Answer

A)   increase,and the quantity sold in the market will increase.
B)   increase,and the quantity sold in the market will decrease.
C)   decrease,and the quantity sold in the market will increase.
D)   decrease,and the quantity sold in the market will decrease.E) A) and B)
F) A) and D)

Question 17

If a binding price floor is imposed on the video game market,then

Accepted Answer

A)   the quantity of video games demanded will decrease.
B)   the quantity of video games supplied will increase.
C)   a surplus of video games will develop.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 18

Figure 6-6 
-Refer to Figure 6-6.Which of the following price floors would be binding in this market?

Accepted Answer

A)   $6
B)   $8
C)   $10
D)   $12E) None of the above
F) A) and B)

Question 19

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

Question 20

Figure 6-4 
-Refer to Figure 6-4.A government-imposed price of $12 in this market is an example of a

Accepted Answer

A)   binding price ceiling that creates a shortage.
B)   non-binding price ceiling that creates a shortage.
C)   binding price floor that creates a surplus.
D)   non-binding price floor that creates a surplus.E) A) and B)
F) None of the above

Exam 6: Supply,demand,and Government Policies

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

Correct Answer
verified

Because the supply and demand of housing are inelastic in the short run,the initial shortage caused by rent control is large.

Correct Answer
verified

Figure 6-16 -Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.Which of the following is correct?

Correct Answer
verified

When a binding price floor is imposed on a market for a good,some people who want to sell the good cannot do so.

Correct Answer
verified

Figure 6-6 -Refer to Figure 6-6.Which of the following price floors would be binding in this market?

Correct Answer
verified

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
verified

If the government removes a binding price ceiling from a market,then the price paid by buyers will

Correct Answer
verified

Who bears the majority of a tax burden depends on the relative elasticity of supply and demand.

Correct Answer
verified

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Correct Answer
verified

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

Correct Answer
verified

Figure 6-26 -Refer to Figure 6-26.A price ceiling set at $30 would create a shortage of 20 units.

Correct Answer
verified

The minimum wage

Correct Answer
verified

As rationing mechanisms,prices

Correct Answer
verified

A binding price floor will reduce a firm's total revenue

Correct Answer
verified

Correct Answer
verified

Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $12 in this market is an example of a

Correct Answer
verified

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

Correct Answer
verified

A tax on the buyers of sofas

Correct Answer
verified

The long-run effects of rent controls are a good illustration of the principle that

Correct Answer
verified

If a binding price floor is imposed on the video game market,then

Correct Answer
verified

Exam 6: Supply,demand,and Government Policies

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

Correct AnswerverifiedShow Answer

Because the supply and demand of housing are inelastic in the short run,the initial shortage caused by rent control is large.

Correct AnswerverifiedShow Answer

Figure 6-16 -Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.Which of the following is correct?

Correct AnswerverifiedShow Answer

When a binding price floor is imposed on a market for a good,some people who want to sell the good cannot do so.

Correct AnswerverifiedShow Answer

Figure 6-6 -Refer to Figure 6-6.Which of the following price floors would be binding in this market?

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

If the government removes a binding price ceiling from a market,then the price paid by buyers will

Correct AnswerverifiedShow Answer

Who bears the majority of a tax burden depends on the relative elasticity of supply and demand.

Correct AnswerverifiedShow Answer

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-26 -Refer to Figure 6-26.A price ceiling set at $30 would create a shortage of 20 units.

Correct AnswerverifiedShow Answer

The minimum wage

Correct AnswerverifiedShow Answer

As rationing mechanisms,prices

Correct AnswerverifiedShow Answer

A binding price floor will reduce a firm's total revenue

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $12 in this market is an example of a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A tax on the buyers of sofas

Correct AnswerverifiedShow Answer

The long-run effects of rent controls are a good illustration of the principle that

Correct AnswerverifiedShow Answer

If a binding price floor is imposed on the video game market,then

Correct AnswerverifiedShow Answer

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