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) All of the above
F) C) and D)

Question 2

Figure 6-34 
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the buyers in this market?

Accepted Answer

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

Question 3

Not all sellers benefit from a binding price floor.

Accepted Answer

A) True 
 B)False

Question 4

You receive a paycheck from your employer, and your pay stub indicates that $400 was deducted to pay the FICA (Social Security/Medicare)  tax. Which of the following statements is correct?

Accepted Answer

A)  This type of tax is an example of a payback tax.
B)  Your employer is required by law to pay $400 to match the $400 deducted from your check.
C)  The $400 that you paid is the true burden of the tax that falls on you, the employee.
D)  All of the above are correct.E) B) and C)
F) None of the above

Question 5

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Accepted Answer

A) True 
 B)False

Question 6

A price ceiling set below the equilibrium price is binding.

Accepted Answer

A) True 
 B)False

Question 7

A price ceiling set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 8

The Federal Insurance Contribution Act (FICA)  tax is an example of a(n)

Accepted Answer

A)  payroll tax.
B)  sales tax.
C)  farm subsidy.
D)  income subsidy.E) B) and C)
F) B) and D)

Question 9

Figure 6-1
Panel (a) 
Panel (b)   
-Refer to Figure 6-1. The price ceiling shown in panel (a)

Accepted Answer

A)  is not binding.
B)  creates a surplus.
C)  creates a shortage.
D)  Both a)  and b)  are correct.E) C) and D)
F) B) and C)

Question 10

The rationing mechanisms that develop under binding price floors are usually efficient.

Accepted Answer

A) True 
 B)False

Question 11

As a rationing mechanism, discrimination according to seller bias is

Accepted Answer

A)  efficient and fair.
B)  efficient, but potentially unfair.
C)  inefficient, but fair.
D)  inefficient and potentially unfair.E) A) and D)
F) B) and C)

Question 12

A tax imposed on the sellers of a good will lower the

Accepted Answer

A)  price paid by buyers and lower the equilibrium quantity.
B)  price paid by buyers and raise the equilibrium quantity.
C)  effective price received by sellers and lower the equilibrium quantity.
D)  effective price received by sellers and raise the equilibrium quantity.E) C) and D)
F) A) and B)

Question 13

Figure 6-31  ​
-Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30. The effect of this price ceiling would be ​

Accepted Answer

A)  nonbinding and cause a shortage of 50 units.
B)  ​binding and cause a shortage of 50 units.
C)  ​binding and cause a shortage of 20 units.
D)  nonbinding and have no effect on the market.E) A) and C)
F) A) and B)

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Figure 6-26 
-Refer to Figure 6-26. The per-unit burden of the tax is

Accepted Answer

A)  $2 for buyers and $6 for sellers.
B)  $4 for buyers and $4 for sellers.
C)  $6 for buyers and $2 for sellers.
D)  $8 for buyers and $0 for sellers.E) A) and B)
F) B) and C)

Question 16

Suppose that the demand for light bulbs is inelastic, and the supply of light bulbs is elastic. A tax of $2 per bulb levied on light bulbs will increase the price paid by buyers of light bulbs by

Accepted Answer

A)  less than $1.
B)  $1.
C)  between $1 and $2.
D)  $2.E) A) and B)
F) B) and C)

Question 17

Figure 6-23 
-Refer to Figure 6-23. For every unit of the good that is sold, sellers are required to send

Accepted Answer

A)  one dollar to the government, and buyers are required to send two dollars to the government.
B)  two dollars to the government, and buyers are required to send one dollar to the government.
C)  three dollars to the government, and buyers are required to send nothing to the government.
D)  nothing to the government, and buyers are required to send two dollars to the government.E) A) and C)
F) A) and B)

Question 18

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

Accepted Answer

A)  increases 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)  All of the above are correct.E) C) and D)
F) None of the above

Question 19

When a binding price ceiling is imposed on a market to benefit buyers,

Accepted Answer

A)  every buyer in the market benefits.
B)  every buyer and seller in the market benefits.
C)  every buyer who wants to buy the good will be able to do so, but only if he waits in long lines.
D)  some buyers will not be able to buy any amount of the good.E) All of the above
F) A) and C)

Question 20

When a tax is imposed on the buyers of a good, the demand curve shifts

Accepted Answer

A)  upward by the amount of the tax.
B)  downward by the amount of the tax.
C)  upward by less than the amount of the tax.
D)  downward by less than the amount of the tax.E) C) and D)
F) None of the above

Exam 6: Supply, Demand, and Government Policies

A price ceiling set below the equilibrium price is binding.

Correct AnswerverifiedShow Answer

You receive a paycheck from your employer, and your pay stub indicates that $400 was deducted to pay the FICA (Social Security/Medicare) tax. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

A tax imposed on the sellers of a good will lower the

Correct AnswerverifiedShow Answer

Figure 6-23 -Refer to Figure 6-23. For every unit of the good that is sold, sellers are required to send

Correct AnswerverifiedShow Answer

As a rationing mechanism, discrimination according to seller bias is

Correct AnswerverifiedShow Answer

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the buyers in this market?

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

When a tax is imposed on the buyers of a good, the demand curve shifts

Correct AnswerverifiedShow Answer

The Federal Insurance Contribution Act (FICA) tax is an example of a(n)

Correct AnswerverifiedShow Answer

A price ceiling set above the equilibrium price is not binding.

Correct AnswerverifiedShow Answer

Not all sellers benefit from a binding price floor.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-26 -Refer to Figure 6-26. The per-unit burden of the tax is

Correct AnswerverifiedShow Answer

Suppose that the demand for light bulbs is inelastic, and the supply of light bulbs is elastic. A tax of $2 per bulb levied on light bulbs will increase the price paid by buyers of light bulbs by

Correct AnswerverifiedShow Answer

When a binding price ceiling is imposed on a market to benefit buyers,

Correct AnswerverifiedShow Answer

Figure 6-1 Panel (a) Panel (b) -Refer to Figure 6-1. The price ceiling shown in panel (a)

Correct AnswerverifiedShow Answer

Figure 6-31 ​ -Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30. The effect of this price ceiling would be ​

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The rationing mechanisms that develop under binding price floors are usually efficient.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
With a $6 tax per unit, the pr...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Figure 6-31 -Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30. The effect of this price ceiling would be

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified