Question 1

If a binding price floor is imposed on the market for eBooks,then

Accepted Answer

A)   the demand for eBooks will decrease.
B)   the supply of eBooks will increase.
C)   a surplus of eBooks will develop.
D)   All of the above are correct.E) A) and B)
F) B) and D)

Question 2

The wedge between the buyers' price and the sellers' price is the same,regardless of whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 3

Figure 6-21 
-Refer to Figure 6-22.How much tax revenue does this tax generate for the government?

Accepted Answer

A)   $150
B)   $180
C)   $250
D)   $300E) A) and C)
F) All of the above

Question 4

Minimum wage laws

Accepted Answer

A)   may encourage some teenagers to drop out and take jobs.
B)   create labor shortages.
C)   have the greatest impact in the market for skilled labor.
D)   All of the above are correct.E) B) and D)
F) B) and C)

Question 5

If a tax is imposed on a market with inelastic supply and elastic demand,then

Accepted Answer

A)   buyers will bear most of the burden of the tax.
B)   sellers will bear most of the burden of the tax.
C)   the burden of the tax will be shared equally between buyers and sellers.
D)   it is impossible to determine how the burden of the tax will be shared.E) A) and B)
F) All of the above

Question 6

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

Question 7

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) B) and D)

Question 8

If a good or service is sold in a competitive market free of government regulation,then the price of the good or service adjusts to balance supply and demand.

Accepted Answer

A) True 
 B)False

Question 9

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200,and the government imposes a price ceiling of $150 per physical.As a result of the price ceiling,the

Accepted Answer

A)   demand curve for physicals shifts to the right.
B)   supply curve for physicals shifts to the left.
C)   quantity demanded of physicals increases,and the quantity supplied of physicals decreases.
D)   number of physicals performed stays the same.E) A) and B)
F) A) and C)

Question 10

A key lesson from the payroll tax is that the

Accepted Answer

A)   tax is a tax solely on workers.
B)   tax is a tax solely on firms that hire workers.
C)   tax eliminates any wedge that might exist between the wage that firms pay and the wage that workers receive.
D)   true burden of a tax cannot be legislated.E) None of the above
F) A) and B)

Question 11

After a binding price floor becomes effective,a

Accepted Answer

A)   smaller quantity of the good is bought and sold.
B)   a larger quantity of the good is demanded.
C)   a smaller quantity of the good is supplied.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 12

Figure 6-24
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-24.Suppose D1 represents the demand curve for paperback novels,D2 represents the demand curve for gasoline,and S1 represents the supply curve for paperback novels and gasoline.After the imposition of the $2 on paperback novels and on gasoline,the

Accepted Answer

A)   buyers of gasoline bear a higher burden of the $2 tax than buyers of paperback novels.
B)   sellers of gasoline bear a higher burden of the $2 tax than sellers of paperback novels.
C)   buyers of gasoline bear an equal burden of the $2 tax as buyers of paperback novels.
D)   Both a and b are correct.E) A) and B)
F) All of the above

Question 13

Which of the following would be the least likely result of a binding price ceiling imposed on the market for rental cars?

Accepted Answer

A)   an accumulation of dirt in the interior of rental cars
B)   poor engine maintenance in rental cars
C)   free gasoline given to people as an incentive to a rent a car
D)   slow replacement of old rental cars with newer onesE) A) and B)
F) C) and D)

Question 14

If a price ceiling is a binding constraint on a market,then

Accepted Answer

A)   the equilibrium price must be below the price ceiling.
B)   the quantity supplied must exceed the quantity demanded.
C)   sellers cannot sell all they want to sell at the price ceiling.
D)   buyers cannot buy all they want to buy at the price ceiling.E) All of the above
F) A) and B)

Question 15

Figure 6-27 
-Refer to Figure 6-27.If the government places a $2 tax in the market,the buyer pays $6.

Accepted Answer

A) True 
 B)False

Question 16

Not all sellers benefit from a binding price floor.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is correct?

Accepted Answer

A)   A tax levied on buyers will never be partially paid by sellers.
B)   Who actually pays a tax depends on the price elasticities of supply and demand.
C)   Government can decide who actually pays a tax.
D)   A tax levied on sellers always will be passed on completely to buyers.E) None of the above
F) A) and B)

Question 18

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 B)
F) A) and C)

Question 19

Suppose there is currently a tax of $50 per ticket on airline tickets.Buyers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $30 per ticket,then the

Accepted Answer

A)   demand curve will shift upward by $20,and the effective price received by sellers will increase by $20.
B)   demand curve will shift upward by $20,and the effective price received by sellers will increase by less than $20.
C)   supply curve will shift downward by $20,and the price paid by buyers will decrease by $20.
D)   supply curve will shift downward by $20,and the price paid by buyers will decrease by less than $20.E) B) and D)
F) B) and C)

Question 20

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.How many units of the good are sold after the imposition of the price floor?

Accepted Answer

A)   5
B)   9
C)   10
D)   15E) A) and D)
F) A) and C)

Exam 6: Supply,demand,and Government Policies

Figure 6-21 -Refer to Figure 6-22.How much tax revenue does this tax generate for the government?

Correct Answer
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Which of the following statements is correct?

Correct Answer
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Which of the following is not correct?

Correct Answer
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Correct Answer
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After a binding price floor becomes effective,a

Correct Answer
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Minimum wage laws

Correct Answer
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If a binding price floor is imposed on the market for eBooks,then

Correct Answer
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Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200,and the government imposes a price ceiling of $150 per physical.As a result of the price ceiling,the

Correct Answer
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Which of the following would be the least likely result of a binding price ceiling imposed on the market for rental cars?

Correct Answer
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If a price ceiling is a binding constraint on a market,then

Correct Answer
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If a good or service is sold in a competitive market free of government regulation,then the price of the good or service adjusts to balance supply and demand.

Correct Answer
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Correct Answer
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If a price ceiling is not binding,then

Correct Answer
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If a tax is imposed on a market with inelastic supply and elastic demand,then

Correct Answer
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Not all sellers benefit from a binding price floor.

Correct Answer
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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
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A key lesson from the payroll tax is that the

Correct Answer
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Suppose there is currently a tax of $50 per ticket on airline tickets.Buyers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $30 per ticket,then the

Correct Answer
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Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the buyer pays $6.

Correct Answer
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The wedge between the buyers' price and the sellers' price is the same,regardless of whether the tax is levied on buyers or sellers.

Correct Answer
verified

Exam 6: Supply,demand,and Government Policies

Figure 6-21 -Refer to Figure 6-22.How much tax revenue does this tax generate for the government?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

After a binding price floor becomes effective,a

Correct AnswerverifiedShow Answer

Minimum wage laws

Correct AnswerverifiedShow Answer

If a binding price floor is imposed on the market for eBooks,then

Correct AnswerverifiedShow Answer

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200,and the government imposes a price ceiling of $150 per physical.As a result of the price ceiling,the

Correct AnswerverifiedShow Answer

Which of the following would be the least likely result of a binding price ceiling imposed on the market for rental cars?

Correct AnswerverifiedShow Answer

If a price ceiling is a binding constraint on a market,then

Correct AnswerverifiedShow Answer

If a good or service is sold in a competitive market free of government regulation,then the price of the good or service adjusts to balance supply and demand.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a price ceiling is not binding,then

Correct AnswerverifiedShow Answer

If a tax is imposed on a market with inelastic supply and elastic demand,then

Correct AnswerverifiedShow Answer

Not all sellers benefit from a binding price floor.

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

A key lesson from the payroll tax is that the

Correct AnswerverifiedShow Answer

Suppose there is currently a tax of $50 per ticket on airline tickets.Buyers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $30 per ticket,then the

Correct AnswerverifiedShow Answer

Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the buyer pays $6.

Correct AnswerverifiedShow Answer

The wedge between the buyers' price and the sellers' price is the same,regardless of whether the tax is levied on buyers or sellers.

Correct AnswerverifiedShow Answer

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