Question 1

If the government removes a binding price ceiling from a market,then the price received by sellers will

Accepted Answer

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

Question 2

A legal maximum on the price at which a good can be sold is called a price

Accepted Answer

A)   floor.
B)   subsidy.
C)   support.
D)   ceiling.E) All of the above
F) A) and B)

Question 3

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

Question 4

A tax on sellers increases supply.

Accepted Answer

A) True 
 B)False

Question 5

You have responsibility for economic policy in the country of Freedonia.Recently,the neighboring country of Sylvania has cut off all exports of oranges to Freedonia.Harpo,who is one of your advisors,suggests that you should impose a binding price ceiling in order to avoid a shortage of oranges.Chico,another one of your advisors,argues that without a binding price floor,a shortage will certainly develop.Zeppo,a third advisor,says that the best way to avoid a shortage of oranges is to take no action at all.Which of your three advisors is most likely to have studied economics?

Accepted Answer

A)   Harpo
B)   Chico
C)   Zeppo
D)   Apparently,all three advisors have studied economics,but their views on positive economics are different.E) A) and D)
F) C) and D)

Question 6

Figure 6-17 
-Refer to Figure 6-17.In the after-tax equilibrium,how much revenue does the government collect from the tax on this good?

Accepted Answer

A)   $210
B)   $345
C)   $420
D)   $480E) All of the above
F) C) and D)

Question 7

When a tax is placed on the buyers of cell phones,the size of the cell phone market

Accepted Answer

A)   and the effective price received by sellers both decrease.
B)   decreases,but the effective price received by sellers increases.
C)   increases,but the effective price received by sellers decreases.
D)   and the effective price received by sellers both increase.E) B) and C)
F) A) and D)

Question 8

When a tax is imposed on a good,the result is always a shortage of the good.

Accepted Answer

A) True 
 B)False

Question 9

If the government wants to reduce the burning of fossil fuels,it should impose a tax on

Accepted Answer

A)   buyers of gasoline.
B)   sellers of gasoline.
C)   either buyers or sellers of gasoline.
D)   whichever side of the market is less elastic.E) B) and D)
F) A) and C)

Question 10

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) A) and D)
F) C) and D)

Question 11

When policymakers set prices by legal decree,they

Accepted Answer

A)   are usually following the advice of mainstream economists.
B)   improve the organization of economic activity.
C)   obscure the signals that normally guide the allocation of society's resources.
D)   are demonstrating a willingness to sacrifice fairness for the sake of a gain in efficiency.E) B) and D)
F) All of the above

Question 12

Figure 6-23 
-Refer to Figure 6-23.The amount of the tax per unit is

Accepted Answer

A)   $4.
B)   $5.
C)   $6.
D)   $10.E) None of the above
F) B) and C)

Question 13

When a tax is placed on the buyers of a product,buyers pay

Accepted Answer

A)   more and sellers receive more than they did before the tax.
B)   more and sellers receive less than they did before the tax.
C)   less and sellers receive more than they did before the tax.
D)   less and sellers receive less than they did before the tax.E) B) and C)
F) C) and D)

Question 14

How is the burden of a tax divided? (i) When the tax is levied on the sellers,the sellers bear a higher proportion of the tax burden.
(ii) When the tax is levied on the buyers,the buyers bear a higher proportion of the tax burden.
(iii) Regardless of whether the tax is levied on the buyers or the sellers,the buyers and sellers bear an equal proportion of the tax burden.
(iv) 
Regardless of whether the tax is levied on the buyers or the sellers,the buyers and sellers bear some proportion of the tax burden.

Accepted Answer

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

Question 15

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) A) and B)
F) All of the above

Question 16

Table 6-1
 
-Refer to Table 6-1.Suppose the government imposes a price floor of $1 on this market.What will be the size of the surplus in this market?

Accepted Answer

A)   0 units
B)   2 units
C)   8 units
D)   10 unitsE) A) and B)
F) A) and C)

Question 17

The impact of the minimum wage depends on the skill and experience of the worker.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)   is binding.
B)   causes a shortage.
C)   causes the quantity demanded to exceed the quantity supplied.
D)   All of the above are correct.E) All of the above
F) B) and C)

Question 19

A price ceiling caused the gasoline shortage of 1973 in the United States.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)   supplied to exceed quantity demanded by 45 units.
B)   supplied to exceed quantity demanded by 85 units.
C)   demanded to exceed quantity supplied by 45 units.
D)   demanded to exceed quantity supplied by 85 units.E) A) and B)
F) A) and C)

Exam 6: Supply,demand,and Government Policies

Figure 6-17 -Refer to Figure 6-17.In the after-tax equilibrium,how much revenue does the government collect from the tax on this good?

Correct Answer
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Correct Answer
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If the government wants to reduce the burning of fossil fuels,it should impose a tax on

Correct Answer
verified

If the government removes a binding price ceiling from a market,then the price received by sellers will

Correct Answer
verified

When a tax is imposed on a good,the result is always a shortage of the good.

Correct Answer
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When a tax is placed on the buyers of a product,buyers pay

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

Correct Answer
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A legal maximum on the price at which a good can be sold is called a price

Correct Answer
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When a tax is placed on the buyers of cell phones,the size of the cell phone market

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

Correct Answer
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Table 6-1 -Refer to Table 6-1.Suppose the government imposes a price floor of $1 on this market.What will be the size of the surplus in this market?

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

Correct Answer
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When policymakers set prices by legal decree,they

Correct Answer
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Figure 6-2 -Refer to Figure 6-2.The price ceiling causes quantity

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

Correct Answer
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Figure 6-23 -Refer to Figure 6-23.The amount of the tax per unit is

Correct Answer
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A price ceiling caused the gasoline shortage of 1973 in the United States.

Correct Answer
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A tax on sellers increases supply.

Correct Answer
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Correct Answer
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The impact of the minimum wage depends on the skill and experience of the worker.

Correct Answer
verified

Exam 6: Supply,demand,and Government Policies

Figure 6-17 -Refer to Figure 6-17.In the after-tax equilibrium,how much revenue does the government collect from the tax on this good?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the government wants to reduce the burning of fossil fuels,it should impose a tax on

Correct AnswerverifiedShow Answer

If the government removes a binding price ceiling from a market,then the price received by sellers will

Correct AnswerverifiedShow Answer

When a tax is imposed on a good,the result is always a shortage of the good.

Correct AnswerverifiedShow Answer

When a tax is placed on the buyers of a product,buyers pay

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A legal maximum on the price at which a good can be sold is called a price

Correct AnswerverifiedShow Answer

When a tax is placed on the buyers of cell phones,the size of the cell phone market

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 6-1 -Refer to Table 6-1.Suppose the government imposes a price floor of $1 on this market.What will be the size of the surplus in this market?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When policymakers set prices by legal decree,they

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-23 -Refer to Figure 6-23.The amount of the tax per unit is

Correct AnswerverifiedShow Answer

A price ceiling caused the gasoline shortage of 1973 in the United States.

Correct AnswerverifiedShow Answer

A tax on sellers increases supply.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The impact of the minimum wage depends on the skill and experience of the worker.

Correct AnswerverifiedShow Answer

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