Question 1

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. 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 2

Economic policies often have effects that their architects did not intend or anticipate.

Accepted Answer

A) True 
 B)False

Question 3

Table 6-6
 
-Refer to Table 6-6. In this market, over what range of prices would a price ceiling set by the government be binding?

Accepted Answer

A price ceiling must be set be...

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Suppose buyers of vodka are required to send $5.00 to the government for every bottle of vodka they buy. Further, suppose this tax causes the effective price received by sellers of vodka to fall by $3.00 per bottle. Which of the following statements is correct?

Accepted Answer

A)   This tax causes the demand curve for vodka to shift downward by $5.00 at each quantity of vodka.
B)   The price paid by buyers is $2.00 per bottle more than it was before the tax.
C)   Sixty percent of the burden of the tax falls on sellers.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 6

If the government passes a law requiring buyers of college textbooks to send $5 to the government for every textbook they buy, then

Accepted Answer

A)   the demand curve for textbooks shifts downward by $5.
B)   buyers of textbooks pay $5 more per textbook than they were paying before the tax.
C)   sellers of textbooks are unaffected by the tax.
D)   All of the above are correct.E) A) and C)
F) B) and C)

Question 7

In 1990, Congress passed a new luxury tax on items such as yachts, private airplanes, furs, jewelry, and expensive cars. The goal of the tax was to

Accepted Answer

A)   raise revenue from the wealthy.
B)   prevent wealthy people from buying luxuries.
C)   force producers of luxury goods to reduce employment.
D)   limit exports of luxury goods to other countries.E) B) and D)
F) B) and C)

Question 8

When a binding price floor is imposed on a market to benefit sellers,

Accepted Answer

A)   no sellers actually benefit.
B)   some sellers benefit, but no sellers are harmed.
C)   some sellers benefit, and some sellers are harmed.
D)   all sellers benefit.E) C) and D)
F) A) and B)

Exam 6: Supply, Demand, and Government Policies

Table 6-6 -Refer to Table 6-6. In this market, over what range of prices would a price ceiling set by the government be binding?

Correct Answer
verified
A price ceiling must be set be...
View Answer

Suppose buyers of vodka are required to send $5.00 to the government for every bottle of vodka they buy. Further, suppose this tax causes the effective price received by sellers of vodka to fall by $3.00 per bottle. Which of the following statements is correct?

Correct Answer
verified

When a binding price floor is imposed on a market to benefit sellers,

Correct Answer
verified

In 1990, Congress passed a new luxury tax on items such as yachts, private airplanes, furs, jewelry, and expensive cars. The goal of the tax was to

Correct Answer
verified

If the government passes a law requiring buyers of college textbooks to send $5 to the government for every textbook they buy, then

Correct Answer
verified

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

Correct Answer
verified

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

Economic policies often have effects that their architects did not intend or anticipate.

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Table 6-6 -Refer to Table 6-6. In this market, over what range of prices would a price ceiling set by the government be binding?

Correct AnswerverifiedA price ceiling must be set be...View AnswerShow Answer

Suppose buyers of vodka are required to send $5.00 to the government for every bottle of vodka they buy. Further, suppose this tax causes the effective price received by sellers of vodka to fall by $3.00 per bottle. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

When a binding price floor is imposed on a market to benefit sellers,

Correct AnswerverifiedShow Answer

In 1990, Congress passed a new luxury tax on items such as yachts, private airplanes, furs, jewelry, and expensive cars. The goal of the tax was to

Correct AnswerverifiedShow Answer

If the government passes a law requiring buyers of college textbooks to send $5 to the government for every textbook they buy, then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe price ceiling wi...View AnswerShow Answer

Economic policies often have effects that their architects did not intend or anticipate.

Correct AnswerverifiedShow Answer

Correct Answer
verified
A price ceiling must be set be...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
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