Question 1

Figure 6-34 
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how many units will be bought and sold in the market after the tax is imposed?

Accepted Answer

With a $6 tax per un...

Question 2

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) C) and D)
F) None of the above

Question 3

The price paid by buyers in a market will increase if the government

Accepted Answer

A)  decreases a binding price floor in that market.
B)  increases a binding price ceiling in that market.
C)  decreases a tax on the good sold in that market.
D)  imposes a binding price ceiling in that market.E) All of the above
F) A) and B)

Question 4

Although lawmakers legislated a fifty-fifty division of the payment of the FICA tax,

Accepted Answer

A)  the actual tax incidence is unaffected by the legislated tax incidence.
B)  the employer now is required by law to pay more than 50 percent of the tax.
C)  the employee now is required by law to pay more than 50 percent of the tax.
D)  employers are no longer required by law to pay any portion of the tax.E) A) and B)
F) A) and D)

Question 5

Economists generally believe that rent control is

Accepted Answer

A)  an efficient and fair way to help the poor.
B)  inefficient but the best available means of solving a serious social problem.
C)  a highly inefficient way to help the poor raise their standard of living.
D)  an efficient way to allocate housing, but not a good way to help the poor.E) None of the above
F) B) and C)

Question 6

Figure 6-25 
-Refer to Figure 6-25. The amount of the tax per unit is

Accepted Answer

A)  $1.
B)  $1.50.
C)  $2.
D)  $3.E) A) and B)
F) All of the above

Question 7

Figure 6-30
Panel (a) 
Panel (b)    Panel (c)  
-Refer to Figure 6-30. In which market will the majority of the tax burden fall on buyers?

Accepted Answer

A)  the market shown in panel (a) .
B)  the market shown in panel (b) .
C)  the market shown in panel (c) .
D)  All of the above are correct.E) A) and C)
F) None of the above

Question 8

Minimum-wage laws benefit society by creating a surplus of labor.

Accepted Answer

A) True 
 B)False

Question 9

A large majority of economists favor eliminating the minimum wage.

Accepted Answer

A) True 
 B)False

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

In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that

Accepted Answer

A)  OPEC raised the price of crude oil in world markets.
B)  U.S. gasoline producers raised the price of gasoline.
C)  the U.S. government maintained a price ceiling on gasoline.
D)  Americans typically commuted long distances.E) A) and B)
F) None of the above

Question 12

Figure 6-9 
-Refer to Figure 6-9. At which price would a price ceiling be nonbinding?

Accepted Answer

A)  $4
B)  $5
C)  $3
D)  $7E) A) and D)
F) None of the above

Question 13

Under rent control, bribery is a mechanism to

Accepted Answer

A)  bring the total price of an apartment (including the bribe)  closer to the equilibrium price.
B)  allocate housing to the poorest individuals in the market.
C)  force the total price of an apartment (including the bribe)  to be less than the market price.
D)  allocate housing to the most deserving tenants.E) All 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

Figure 6-34 
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, who will bear the greater burden of the tax - the buyers, the sellers, or will the burden be shared equally?

Accepted Answer

With a $6 tax per unit, the bu...

Question 16

Scenario 6-1
Suppose that demand in the market for good X is given by the equation  and that supply in the market for good X is given by the equation 
-Refer to Scenario 6-1. If the government set a price floor at $7, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 17

A price floor will be binding only if it is set

Accepted Answer

A)  equal to the equilibrium price.
B)  above the equilibrium price.
C)  below the equilibrium price.
D)  either above or below the equilibrium price.E) B) and C)
F) A) and B)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

Accepted Answer

A)  Buyers bear the entire burden of the tax.
B)  Sellers bear the entire burden of the tax.
C)  Buyers and sellers share the burden of the tax.
D)  We have to know whether it is the buyers or the sellers that are required to pay the tax to the government in order to make this determination.E) B) and C)
F) A) and B)

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

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.

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Figure 6-9 -Refer to Figure 6-9. At which price would a price ceiling be nonbinding?

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Economists generally believe that rent control is

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Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, who will bear the greater burden of the tax - the buyers, the sellers, or will the burden be shared equally?

Correct AnswerverifiedWith a $6 tax per unit, the bu...View AnswerShow Answer

Scenario 6-1 Suppose that demand in the market for good X is given by the equation and that supply in the market for good X is given by the equation -Refer to Scenario 6-1. If the government set a price floor at $7, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow 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

Under rent control, bribery is a mechanism to

Correct AnswerverifiedShow Answer

Figure 6-25 -Refer to Figure 6-25. The amount of the tax per unit is

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Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

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A price floor will be binding only if it is set

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Minimum-wage laws benefit society by creating a surplus of labor.

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Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how many units will be bought and sold in the market after the tax is imposed?

Correct AnswerverifiedWith a $6 tax per un...View AnswerShow Answer

A large majority of economists favor eliminating the minimum wage.

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Figure 6-30 Panel (a) Panel (b) Panel (c) -Refer to Figure 6-30. In which market will the majority of the tax burden fall on buyers?

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The price paid by buyers in a market will increase if the government

Correct AnswerverifiedShow Answer

In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Although lawmakers legislated a fifty-fifty division of the payment of the FICA tax,

Correct AnswerverifiedShow Answer

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With a $6 tax per unit, the bu...
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A price floor set at...
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With a $6 tax per un...
View Answer

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