Question 1

A price floor set above the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 2

Figure 6-14
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-14.The effective price that sellers receive after the tax is imposed is

Accepted Answer

A)   $6.
B)   $10.
C)   $16.
D)   $24.E) All of the above
F) C) and D)

Question 3

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

Question 4

Minimum-wage laws dictate

Accepted Answer

A)   the exact wage that firms must pay workers.
B)   a maximum wage that firms may pay workers.
C)   a minimum wage that firms may pay workers.
D)   both a minimum wage and a maximum wage that firms may pay workers.E) B) and C)
F) None of the above

Question 5

Figure 6-20 
-Refer to Figure 6-20.Andrew is a buyer of the good.Taking the tax into account,how much does Andrew effectively pay to acquire one unit of the good?

Accepted Answer

A)   $16
B)   $18
C)   $24
D)   $26E) A) and B)
F) All of the above

Question 6

Figure 6-5 
-Refer to Figure 6-5.Suppose a $3 per-unit tax is imposed on the sellers of this good.How much is the burden of this tax on the buyers in this market?

Accepted Answer

The burden...

Question 7

Which of the following statements about the effects of rent control is correct?

Accepted Answer

A)   The short-run effect of rent control is a surplus of apartments,and the long-run effect of rent control is a shortage of apartments.
B)   The short-run effect of rent control is a relatively small shortage of apartments,and the long-run effect of rent control is a larger shortage of apartments.
C)   In the long run,rent control leads to a shortage of apartments and an improvement in the quality of available apartments.
D)   The effects of rent control are very noticeable to the public in the short run because the primary effects of rent control occur very quickly.E) A) and B)
F) A) and C)

Question 8

A binding price floor (i) 
Causes a surplus.
(ii) 
Causes a shortage.
(iii) 
Is set at a price above the equilibrium price.
(iv) 
Is set at a price below the equilibrium price.

Accepted Answer

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

Question 9

The goal of the minimum wage is to ensure workers a minimally adequate standard of living.

Accepted Answer

A) True 
 B)False

Question 10

The presence of a price control in a market for a good or service usually is an indication that

Accepted Answer

A)   an insufficient quantity of the good or service was being produced in that market to meet the public's need.
B)   the usual forces of supply and demand were not able to establish an equilibrium price in that market.
C)   policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers.
D)   policymakers correctly believed that price controls would generate no inequities of their own once imposed.E) C) and D)
F) All of the above

Question 11

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Accepted Answer

A) True 
 B)False

Question 12

Rent control

Accepted Answer

A)   serves as an example of how a social problem can be alleviated or even solved by government policies.
B)   serves as an example of a price ceiling.
C)   is regarded by most economists as an efficient way of helping the poor.
D)   is the most efficient way to allocate scarce housing resources.E) A) and D)
F) B) and C)

Question 13

Figure 6-6 
-Refer to Figure 6-6.If the government imposes a price floor of $14 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) A) and B)

Question 14

Minimum-wage laws are precise policy instruments that can specifically target workers whose family incomes are low.

Accepted Answer

A) True 
 B)False

Question 15

If a price floor is not binding,then

Accepted Answer

A)   there will be a surplus in the market.
B)   there will be a shortage in the market.
C)   there will be no effect on the market price or quantity sold.
D)   the market will be less efficient than it would be without the price floor.E) C) and D)
F) All of the above

Question 16

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

Question 17

One economist has argued that rent control is "the best way to destroy a city,other than bombing." Why would an economist say this?

Accepted Answer

A)   He fears that low rents will cause low-income people to move into the city,reducing the quality of life for other people.
B)   He fears that rent control will benefit landlords at the expense of tenants,increasing inequality in the city.
C)   He fears that rent controls will cause a construction boom,which will make the city crowded and more polluted.
D)   He fears that rent control will eliminate the incentive to maintain buildings,leading to a deterioration of the city.E) A) and D)
F) A) and C)

Question 18

Suppose the demand for macaroni is inelastic,the supply of macaroni is elastic,the demand for cigarettes is inelastic,and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the burden of

Accepted Answer

A)   both taxes would fall more heavily on the buyers than on the sellers.
B)   the macaroni tax would fall more heavily on the sellers than on the buyers,and the burden of the cigarette tax would fall more heavily on the buyers than on the sellers.
C)   the macaroni tax would fall more heavily on the buyers than on the sellers,and the burden of the cigarette tax would fall more heavily on the sellers than on the buyers.
D)   both taxes would fall more heavily on the sellers than on the buyers.E) B) and D)
F) A) and B)

Question 19

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

Accepted Answer

A) True 
 B)False

Question 20

Figure 6-21 
-Refer to Figure 6-22.Suppose the same supply and demand curves apply,and a tax of the same amount per unit as shown here is imposed.Now,however,the sellers of the good,rather than the buyers,are required to pay the tax to the government.After the sellers are required to pay the tax,relative to the case depicted in the graph,the burden on buyers will be

Accepted Answer

A)   larger,and the burden on sellers will be smaller.
B)   smaller,and the burden on sellers will be larger.
C)   the same,and the burden on sellers will be the same.
D)   The relative burdens in the two cases cannot be determined without further information.E) A) and C)
F) A) and D)

Exam 6: Supply,demand,and Government Policies

Figure 6-6 -Refer to Figure 6-6.If the government imposes a price floor of $14 on this market,then there will be

Correct Answer
verified

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

Correct Answer
verified

A price floor set above the equilibrium price causes a surplus in the market.

Correct Answer
verified

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

Correct Answer
verified

The presence of a price control in a market for a good or service usually is an indication that

Correct Answer
verified

Figure 6-5 -Refer to Figure 6-5.Suppose a $3 per-unit tax is imposed on the sellers of this good.How much is the burden of this tax on the buyers in this market?

Correct Answer
verified
The burden...
View Answer

One economist has argued that rent control is "the best way to destroy a city,other than bombing." Why would an economist say this?

Correct Answer
verified

Minimum-wage laws are precise policy instruments that can specifically target workers whose family incomes are low.

Correct Answer
verified

Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14.The effective price that sellers receive after the tax is imposed is

Correct Answer
verified

The goal of the minimum wage is to ensure workers a minimally adequate standard of living.

Correct Answer
verified

Correct Answer
verified

Figure 6-20 -Refer to Figure 6-20.Andrew is a buyer of the good.Taking the tax into account,how much does Andrew effectively pay to acquire one unit of the good?

Correct Answer
verified

Suppose the demand for macaroni is inelastic,the supply of macaroni is elastic,the demand for cigarettes is inelastic,and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the burden of

Correct Answer
verified

Rent control

Correct Answer
verified

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

Correct Answer
verified

If a price floor is not binding,then

Correct Answer
verified

Which of the following statements about the effects of rent control is correct?

Correct Answer
verified

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Correct Answer
verified

Minimum-wage laws dictate

Correct Answer
verified

A binding price floor (i) Causes a surplus. (ii) Causes a shortage. (iii) Is set at a price above the equilibrium price. (iv) Is set at a price below the equilibrium price.

Correct Answer
verified

Exam 6: Supply,demand,and Government Policies

Figure 6-6 -Refer to Figure 6-6.If the government imposes a price floor of $14 on this market,then there will be

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A price floor set above the equilibrium price causes a surplus in the market.

Correct AnswerverifiedShow Answer

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

Correct AnswerverifiedShow Answer

The presence of a price control in a market for a good or service usually is an indication that

Correct AnswerverifiedShow Answer

Figure 6-5 -Refer to Figure 6-5.Suppose a $3 per-unit tax is imposed on the sellers of this good.How much is the burden of this tax on the buyers in this market?

Correct AnswerverifiedThe burden...View AnswerShow Answer

One economist has argued that rent control is "the best way to destroy a city,other than bombing." Why would an economist say this?

Correct AnswerverifiedShow Answer

Minimum-wage laws are precise policy instruments that can specifically target workers whose family incomes are low.

Correct AnswerverifiedShow Answer

Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14.The effective price that sellers receive after the tax is imposed is

Correct AnswerverifiedShow Answer

The goal of the minimum wage is to ensure workers a minimally adequate standard of living.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 6-20 -Refer to Figure 6-20.Andrew is a buyer of the good.Taking the tax into account,how much does Andrew effectively pay to acquire one unit of the good?

Correct AnswerverifiedShow Answer

Suppose the demand for macaroni is inelastic,the supply of macaroni is elastic,the demand for cigarettes is inelastic,and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the burden of

Correct AnswerverifiedShow Answer

Rent control

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a price floor is not binding,then

Correct AnswerverifiedShow Answer

Which of the following statements about the effects of rent control is correct?

Correct AnswerverifiedShow Answer

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Correct AnswerverifiedShow Answer

Minimum-wage laws dictate

Correct AnswerverifiedShow Answer

A binding price floor (i) Causes a surplus. (ii) Causes a shortage. (iii) Is set at a price above the equilibrium price. (iv) Is set at a price below the equilibrium price.

Correct AnswerverifiedShow Answer

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The burden...
View Answer

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