Question 1

A binding price ceiling causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 2

Minimum-wage laws dictate

Accepted Answer

A)  the exact wage that firms must pay workers.
B)  only a maximum wage that firms may pay workers.
C)  only a minimum wage that firms may pay workers.
D)  both a minimum wage and a maximum wage that firms may pay workers.E) A) and C)
F) All of the above

Question 3

Figure 6-14
 1 represents the demand curve for paperback novels, D2 represents the demand curve for gasoline, and S1 is representative of the supply curve for paperback novels as well as the supply curve for gasoline. After the imposition of the $2 tax on paperback novels and on gasoline, the 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) buyers of gasoline bear a lower burden of the $2 tax than buyers of paperback novels." class="answers-bank-image d-inline" rel="preload" > ​
-Refer to Figure 6-14. Suppose D1 represents the demand curve for paperback novels, D2 represents the demand curve for gasoline, and S1 is representative of the supply curve for paperback novels as well as the supply curve for gasoline. After the imposition of the $2 tax 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)  buyers of gasoline bear a lower burden of the $2 tax than buyers of paperback novels.E) A) and B)
F) None of the above

Question 4

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

Accepted Answer

A)  price subsidy.
B)  price floor.
C)  tax.
D)  price ceiling.E) B) and C)
F) A) and D)

Question 5

Workers, rather than firms, bear most of the burden of the payroll tax.

Accepted Answer

A) True 
 B)False

Question 6

If the demand curve is more price elastic than the supply curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Accepted Answer

When the demand curve is more elastic th...

Question 7

If the government wants to reduce the burning of fossil fuels, it should impose a tax on

Accepted Answer

A)  only the buyers of gasoline.
B)  only the sellers of gasoline.
C)  either buyers or sellers of gasoline.
D)  whichever side of the market is less elastic.E) None of the above
F) All of the above

Question 8

Suppose buyers of protein shakes are required to send $1.40 to the government for every protein shake they buy. Further, suppose this tax causes the effective price received by sellers of protein shakes to fall by $0.70 per protein shake. Which of the following statements is correct?

Accepted Answer

A)  This tax causes the supply curve for protein shakes to shift downward by $1.40 at each quantity.
B)  The price paid by buyers is $0.70 per shake more than it was before the tax.
C)  Forty percent of the burden of the tax falls on buyers.
D)  This tax causes the demand curve for protein shakes to shift downward by $1.40 at each quantity.E) All of the above
F) None of the above

Question 9

To say that a price ceiling is binding is to say that the price ceiling

Accepted Answer

A)  results in a surplus.
B)  is set below the equilibrium price.
C)  causes quantity supplied to exceed quantity demanded.
D)  is set above the equilibrium price.E) C) and D)
F) B) and C)

Question 10

The impact of the minimum wage depends on the skill and experience of the worker.

Accepted Answer

A) True 
 B)False

Question 11

If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Accepted Answer

The sellers will bea...

Question 12

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

Question 13

Figure 6-3
 
-Refer to Figure 6-3. A government-imposed price of $6 in this market is an example of a

Accepted Answer

A)  binding price ceiling that creates a shortage.
B)  nonbinding price ceiling that creates a shortage
C)  binding price floor that creates a surplus.
D)  nonbinding price floor that creates a surplus.E) A) and C)
F) A) and D)

Question 14

Figure 6-19
  ​
-Refer to Figure 6-19. If the government set a price floor at $70, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Most economists are in favor of price controls as a way of allocating resources in the economy.

Accepted Answer

A) True 
 B)False

Question 17

Most labor economists believe that the supply of labor is much more elastic than the demand.

Accepted Answer

A) True 
 B)False

Question 18

Consider the market for gasoline. Buyers

Accepted Answer

A)  and sellers would lobby for a price ceiling.
B)  and sellers would lobby for a price floor.
C)  would lobby for a price ceiling, whereas sellers would lobby for a price floor.
D)  would lobby for a price floor, whereas sellers would lobby for a price ceiling.E) B) and C)
F) C) and D)

Question 19

All buyers benefit from a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 20

If a price floor is not binding, then

Accepted Answer

A)  the equilibrium price is above the price floor.
B)  the equilibrium price is below the price floor.
C)  there will be a surplus in the market.
D)  there will be a shortage in the market.E) A) and B)
F) B) and D)

Exam 6: Supply, Demand, and Government Policies

Most economists are in favor of price controls as a way of allocating resources in the economy.

Correct Answer
verified

If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Correct Answer
verified
The sellers will bea...
View Answer

To say that a price ceiling is binding is to say that the price ceiling

Correct Answer
verified

Most labor economists believe that the supply of labor is much more elastic than the demand.

Correct Answer
verified

Figure 6-19 -Refer to Figure 6-19. If the government set a price floor at $70, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
A price floor set at...
View Answer

Workers, rather than firms, bear most of the burden of the payroll tax.

Correct Answer
verified

All buyers benefit from a binding price ceiling.

Correct Answer
verified

Consider the market for gasoline. Buyers

Correct Answer
verified

The impact of the minimum wage depends on the skill and experience of the worker.

Correct Answer
verified

Suppose buyers of protein shakes are required to send $1.40 to the government for every protein shake they buy. Further, suppose this tax causes the effective price received by sellers of protein shakes to fall by $0.70 per protein shake. Which of the following statements is correct?

Correct Answer
verified

If the government wants to reduce the burning of fossil fuels, it should impose a tax on

Correct Answer
verified

Figure 6-3 -Refer to Figure 6-3. A government-imposed price of $6 in this market is an example of a

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

A binding price ceiling causes a shortage in the market.

Correct Answer
verified

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
verified

If a price floor is not binding, then

Correct Answer
verified

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

Correct Answer
verified

Minimum-wage laws dictate

Correct Answer
verified

If the demand curve is more price elastic than the supply curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Correct Answer
verified
When the demand curve is more elastic th...
View Answer

Exam 6: Supply, Demand, and Government Policies

Most economists are in favor of price controls as a way of allocating resources in the economy.

Correct AnswerverifiedShow Answer

If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Correct AnswerverifiedThe sellers will bea...View AnswerShow Answer

To say that a price ceiling is binding is to say that the price ceiling

Correct AnswerverifiedShow Answer

Most labor economists believe that the supply of labor is much more elastic than the demand.

Correct AnswerverifiedShow Answer

Figure 6-19 ​ -Refer to Figure 6-19. If the government set a price floor at $70, would there be a shortage or surplus, and how large would be the shortage/surplus?

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

Workers, rather than firms, bear most of the burden of the payroll tax.

Correct AnswerverifiedShow Answer

All buyers benefit from a binding price ceiling.

Correct AnswerverifiedShow Answer

Consider the market for gasoline. Buyers

Correct AnswerverifiedShow Answer

The impact of the minimum wage depends on the skill and experience of the worker.

Correct AnswerverifiedShow Answer

Suppose buyers of protein shakes are required to send $1.40 to the government for every protein shake they buy. Further, suppose this tax causes the effective price received by sellers of protein shakes to fall by $0.70 per protein shake. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

If the government wants to reduce the burning of fossil fuels, it should impose a tax on

Correct AnswerverifiedShow Answer

Figure 6-3 -Refer to Figure 6-3. A government-imposed price of $6 in this market is an example of a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A binding price ceiling causes a shortage in the market.

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

If a price floor is not binding, then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Minimum-wage laws dictate

Correct AnswerverifiedShow Answer

If the demand curve is more price elastic than the supply curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Correct AnswerverifiedWhen the demand curve is more elastic th...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified
The sellers will bea...
View Answer

Correct Answer
verified

Correct Answer
verified

Figure 6-19 -Refer to Figure 6-19. If the government set a price floor at $70, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
A price floor set at...
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

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
When the demand curve is more elastic th...
View Answer