Question 1

When free markets ration goods with prices, it is both efficient and impersonal.

Accepted Answer

A) True 
 B)False

Question 2

A binding price floor may not help all sellers, but it does not hurt any sellers.

Accepted Answer

A) True 
 B)False

Question 3

The distribution of the burden of a tax depends strictly on the elasticity of demand.
​

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

A tax on buyers shifts the demand curve to the right.

Accepted Answer

A) True 
 B)False

Question 6

A price ceiling set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 7

Figure 6-18
  ​
-Refer to Figure 6-18. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

There woul...

Question 8

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) A) and B)
F) B) and D)

Question 9

When OPEC raised the price of crude oil in the 1970s, it caused the

Accepted Answer

A)  demand for gasoline to increase.
B)  demand for gasoline to decrease.
C)  supply of gasoline to increase.
D)  supply of gasoline to decrease.E) A) and B)
F) A) and D)

Question 10

When a free market for a good reaches equilibrium, anyone who is willing and able to sell at the market price can sell the good.

Accepted Answer

A) True 
 B)False

Question 11

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply.
​

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

The minimum wage was instituted to ensure workers

Accepted Answer

A)  a middle-class standard of living.
B)  employment.
C)  a minimally adequate standard of living.
D)  unemployment compensation.E) A) and C)
F) A) and B)

Question 14

Which of the following is not correct?

Accepted Answer

A)  The economy contains many labor markets for different types of workers.
B)  The impact of a minimum wage depends on the skill and experience of the worker.
C)  A minimum wage would be binding for workers with high skills and much experience.
D)  A minimum wage would not be binding if the equilibrium wage was above the minimum wage.E) B) and C)
F) All of the above

Question 15

Consider the U.S. market for chocolate, a market in which the government has imposed a nonbinding price ceiling. Which of the following events could convert the price ceiling from a nonbinding to a binding price ceiling?

Accepted Answer

A)  A government study that shows that consuming chocolate increases the incidence of cancer.
B)  A large increase in the size of the cocoa bean crop; cocoa beans are used to produce chocolate.
C)  South American cocoa bean producers refuse to ship to chocolate producers in the United States.
D)  A sharp drop in consumer income; chocolate is a normal good.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

Scenario 6-2
Suppose demand for a product is given by the equation
QS1U1P1D S1S1P0= 120 - 4P
and supply for the product is given by the equation
QS1U1P1S S1S1P0= 4P
-Refer to Scenario 6-2. Suppose the government sets a price ceiling at $12 for this product. Is this price ceiling binding, and what will be the size of the shortage/surplus in this market?

Accepted Answer

The price ceiling wi...

Question 18

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

Question 19

In the housing market, supply and demand are

Accepted Answer

A)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run.
B)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.
C)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run.
D)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.E) All of the above
F) C) and D)

Question 20

Figure 6-16
​
  ​
-Refer to Figure 6-16. A price ceiling set at $30 would create a shortage of 20 units.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

The minimum wage was instituted to ensure workers

Correct Answer
verified

The distribution of the burden of a tax depends strictly on the elasticity of demand.

Correct Answer
verified

Consider the U.S. market for chocolate, a market in which the government has imposed a nonbinding price ceiling. Which of the following events could convert the price ceiling from a nonbinding to a binding price ceiling?

Correct Answer
verified

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

Correct Answer
verified

A surplus results when a

Correct Answer
verified

Figure 6-16 -Refer to Figure 6-16. A price ceiling set at $30 would create a shortage of 20 units.

Correct Answer
verified

A binding price floor may not help all sellers, but it does not hurt any sellers.

Correct Answer
verified

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

Correct Answer
verified

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply.

Correct Answer
verified

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

Correct Answer
verified

When free markets ration goods with prices, it is both efficient and impersonal.

Correct Answer
verified

Correct Answer
verified
The price ceiling wi...
View Answer

Which of the following is not correct?

Correct Answer
verified

In the housing market, supply and demand are

Correct Answer
verified

Figure 6-18 -Refer to Figure 6-18. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
There woul...
View Answer

When a free market for a good reaches equilibrium, anyone who is willing and able to sell at the market price can sell the good.

Correct Answer
verified

A tax on buyers shifts the demand curve to the right.

Correct Answer
verified

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

Correct Answer
verified

A price ceiling set above the equilibrium price is not binding.

Correct Answer
verified

When OPEC raised the price of crude oil in the 1970s, it caused the

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

The minimum wage was instituted to ensure workers

Correct AnswerverifiedShow Answer

The distribution of the burden of a tax depends strictly on the elasticity of demand. ​

Correct AnswerverifiedShow Answer

Consider the U.S. market for chocolate, a market in which the government has imposed a nonbinding price ceiling. Which of the following events could convert the price ceiling from a nonbinding to a binding price ceiling?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A surplus results when a

Correct AnswerverifiedShow Answer

Figure 6-16 ​ ​ -Refer to Figure 6-16. A price ceiling set at $30 would create a shortage of 20 units.

Correct AnswerverifiedShow Answer

A binding price floor may not help all sellers, but it does not hurt any sellers.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply. ​

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When free markets ration goods with prices, it is both efficient and impersonal.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe price ceiling wi...View AnswerShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

In the housing market, supply and demand are

Correct AnswerverifiedShow Answer

Figure 6-18 ​ -Refer to Figure 6-18. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedThere woul...View AnswerShow Answer

When a free market for a good reaches equilibrium, anyone who is willing and able to sell at the market price can sell the good.

Correct AnswerverifiedShow Answer

A tax on buyers shifts the demand curve to the right.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A price ceiling set above the equilibrium price is not binding.

Correct AnswerverifiedShow Answer

When OPEC raised the price of crude oil in the 1970s, it caused the

Correct AnswerverifiedShow Answer

Correct Answer
verified

The distribution of the burden of a tax depends strictly on the elasticity of demand.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Figure 6-16 -Refer to Figure 6-16. A price ceiling set at $30 would create a shortage of 20 units.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The price ceiling wi...
View Answer

Correct Answer
verified

Correct Answer
verified

Figure 6-18 -Refer to Figure 6-18. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
There woul...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified