Question 1

Figure 6-6 
-Refer to Figure 6-6. If the government imposes a price floor of $6 on this market, then there will be

Accepted Answer

A)  no surplus.
B)  a surplus of 20 units.
C)  a surplus of 30 units.
D)  a surplus of 40 units.E) None of the above
F) C) and D)

Question 2

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

Accepted Answer

A)  causes a shortage of 40 units.
B)  is not binding, because it is set above the equilibrium price.
C)  causes a shortage of 45 units.
D)  causes a shortage of 85 units.E) All of the above
F) None of the above

Question 3

Workers with high skills and much experience are not typically affected by the minimum wage.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following causes a surplus of a good?

Accepted Answer

A)  a binding price floor
B)  a binding price ceiling
C)  a tax on the good
D)  More than one of the above is correct.E) None of the above
F) B) and C)

Question 5

Figure 6-32 
-Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set at $80 wou...

Question 6

Suppose that in a particular market, the demand curve is highly elastic, and the supply curve is highly inelastic. If a tax is imposed in this market, then the

Accepted Answer

A)  buyers will bear a greater burden of the tax than the sellers.
B)  sellers will bear a greater burden of the tax than the buyers.
C)  buyers and sellers are likely to share the burden of the tax equally.
D)  buyers and sellers will not share the burden equally, but it is impossible to determine who will bear the greater burden of the tax without more information.E) B) and C)
F) None of the above

Question 7

Table 6-3
The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market. 
-Refer to Table 6-3. Following the imposition of a price floor $2 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting shortage is

Accepted Answer

A)  0 units.
B)  2 units.
C)  5 units.
D)  7 units.E) B) and C)
F) A) and B)

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) A) and B)
F) B) and C)

Question 9

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor,

Accepted Answer

A)  quantity demanded decreases.
B)  quantity supplied increases.
C)  there is a surplus.
D)  All of the above are correct.E) A) and C)
F) All of the above

Question 10

Which of the following is not correct?

Accepted Answer

A)  Economists have two roles: scientist and policy adviser.
B)  As scientists, economists develop and test theories to explain the world around them.
C)  Economic policies rarely have effects that their architects did not intend or anticipate.
D)  As policy advisers, economists use their theories to help change the world for the better.E) A) and B)
F) A) and C)

Question 11

A price ceiling is binding when it is set

Accepted Answer

A)  above the equilibrium price, causing a shortage.
B)  above the equilibrium price, causing a surplus.
C)  below the equilibrium price, causing a shortage.
D)  below the equilibrium price, causing a surplus.E) B) and D)
F) A) and B)

Question 12

Even though federal law mandates that workers and firms each pay half of the total FICA tax, the tax burden may not fall equally on workers and firms.

Accepted Answer

A) True 
 B)False

Question 13

Scenario 6-2
Suppose demand for a product is given by the equation  and supply for the product is given by the equation 
-Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Accepted Answer

The equilibrium pric...

Question 14

A tax imposed on the sellers of a good will

Accepted Answer

A)  raise both the price buyers pay and the effective price sellers receive.
B)  raise the price buyers pay and lower the effective price sellers receive.
C)  lower the price buyers pay and raise the effective price sellers receive.
D)  lower both the price buyers pay and the effective price sellers receive.E) None of the above
F) All of the above

Question 15

A surplus results when a

Accepted Answer

A)  nonbinding price floor is imposed on a market.
B)  nonbinding price floor is removed from a market.
C)  binding price floor is imposed on a market.
D)  binding price floor is removed from a market.E) None of the above
F) All of the above

Question 16

Figure 6-32 
-Refer to Figure 6-32. If the government set a price floor at $55, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at $55 would...

Question 17

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

Accepted Answer

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

Question 18

Figure 6-33 
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What is the effective price that sellers will receive for the good after the tax is imposed?

Accepted Answer

The effective price ...

Question 19

Which of the following is not correct?

Accepted Answer

A)  Taxes levied on sellers and taxes levied on buyers are not equivalent.
B)  A tax places a wedge between the price that buyers pay and the price that sellers receive.
C)  The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.
D)  In the new after-tax equilibrium, buyers and sellers share the burden of the tax.E) A) and B)
F) A) and C)

Question 20

Which of the following is correct? A tax burden

Accepted Answer

A)  falls more heavily on the side of the market that is more elastic.
B)  falls more heavily on the side of the market that is less elastic.
C)  falls more heavily on the side of the market that is closest to unit elastic.
D)  is distributed independently of the relative elasticities of supply and demand.E) None of the above
F) B) and C)

Exam 6: Supply, Demand, and Government Policies

Which of the following is not correct?

Correct Answer
verified

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What is the effective price that sellers will receive for the good after the tax is imposed?

Correct Answer
verified
The effective price ...
View Answer

A tax imposed on the sellers of a good will

Correct Answer
verified

Figure 6-32 -Refer to Figure 6-32. If the government set a price floor at $55, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
A price floor set at $55 would...
View Answer

A surplus results when a

Correct Answer
verified

Scenario 6-2 Suppose demand for a product is given by the equation and supply for the product is given by the equation -Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Correct Answer
verified
The equilibrium pric...
View Answer

A tax on buyers will shift the

Correct Answer
verified

Which of the following is not correct?

Correct Answer
verified

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price floor of $6 on this market, then there will be

Correct Answer
verified

Suppose that in a particular market, the demand curve is highly elastic, and the supply curve is highly inelastic. If a tax is imposed in this market, then the

Correct Answer
verified

Even though federal law mandates that workers and firms each pay half of the total FICA tax, the tax burden may not fall equally on workers and firms.

Correct Answer
verified

Workers with high skills and much experience are not typically affected by the minimum wage.

Correct Answer
verified

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

Correct Answer
verified

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor,

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
A price ceiling set at $80 wou...
View Answer

Which of the following causes a surplus of a good?

Correct Answer
verified

Which of the following is correct? A tax burden

Correct Answer
verified

A price ceiling is binding when it is set

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What is the effective price that sellers will receive for the good after the tax is imposed?

Correct AnswerverifiedThe effective price ...View AnswerShow Answer

A tax imposed on the sellers of a good will

Correct AnswerverifiedShow Answer

Figure 6-32 -Refer to Figure 6-32. If the government set a price floor at $55, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at $55 would...View AnswerShow Answer

A surplus results when a

Correct AnswerverifiedShow Answer

Scenario 6-2 Suppose demand for a product is given by the equation and supply for the product is given by the equation -Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

A tax on buyers will shift the

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price floor of $6 on this market, then there will be

Correct AnswerverifiedShow Answer

Suppose that in a particular market, the demand curve is highly elastic, and the supply curve is highly inelastic. If a tax is imposed in this market, then the

Correct AnswerverifiedShow Answer

Even though federal law mandates that workers and firms each pay half of the total FICA tax, the tax burden may not fall equally on workers and firms.

Correct AnswerverifiedShow Answer

Workers with high skills and much experience are not typically affected by the minimum wage.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price ceiling set at $80 wou...View AnswerShow Answer

Which of the following causes a surplus of a good?

Correct AnswerverifiedShow Answer

Which of the following is correct? A tax burden

Correct AnswerverifiedShow Answer

A price ceiling is binding when it is set

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The effective price ...
View Answer

Correct Answer
verified

Correct Answer
verified
A price floor set at $55 would...
View Answer

Correct Answer
verified

Correct Answer
verified
The equilibrium pric...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A price ceiling set at $80 wou...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified