Question 1

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

Question 2

The federal government uses the revenue from the FICA (Federal Insurance Contribution Act) tax to pay for

Accepted Answer

A)   unemployment compensation.
B)   the salaries of members of Congress.
C)   Social Security and Medicare.
D)   housing subsidies for low-income people.E) A) and B)
F) A) and D)

Question 3

Figure 6-21
 
-Refer to Figure 6-22.The burden of the tax on sellers is

Accepted Answer

A)   $1 per unit.
B)   $1.50 per unit.
C)   $2 per unit.
D)   $3 per unit.E) A) and C)
F) A) and B)

Question 4

Figure 6-26
 
-Refer to Figure 6-26.A price floor set at $60 would create a surplus of 20 units.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

A binding minimum wage creates unemployment.

Accepted Answer

A) True 
 B)False

Question 7

A binding minimum wage may not help all workers,but it does not hurt any workers.

Accepted Answer

A) True 
 B)False

Question 8

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

Accepted Answer

A) True 
 B)False

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

Figure 6-7
 
-Refer to Figure 6-7.Suppose a price floor of $7 is imposed on this market.As a result,

Accepted Answer

A)   buyers' total expenditure on the good decreases by $20.
B)   the supply curve shifts to the left so as to now pass through the point (quantity = 40, price = $7) .
C)   the quantity of the good demanded decreases by 20 units.
D)   the price of the good continues to serve as the rationing mechanism.E) B) and C)
F) C) and D)

Question 11

A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

Accepted Answer

A) True 
 B)False

Question 12

If the government removes a $1 tax on sellers of gasoline and imposes the same $1 tax on buyers of gasoline,then the price paid by buyers will

Accepted Answer

A)   increase, and the price received by sellers will increase.
B)   increase, and the price received by sellers will not change.
C)   not change, and the price received by sellers will increase.
D)   not change, and the price received by sellers will not change.E) B) and D)
F) A) and B)

Question 13

Over time,housing shortages caused by rent control

Accepted Answer

A)   increase, because the demand for and supply of housing are less elastic in the long run.
B)   increase, because the demand for and supply of housing are more elastic in the long run.
C)   decrease, because the demand for and supply of housing are less elastic in the long run.
D)   decrease, because the demand for and supply of housing are more elastic in the long run.E) All of the above
F) C) and D)

Question 14

If the minimum wage exceeds the equilibrium wage,then

Accepted Answer

A)   the quantity demanded of labor will exceed the quantity supplied.
B)   the quantity supplied of labor will exceed the quantity demanded.
C)   the minimum wage will not be binding.
D)   there will be no unemployment.E) A) and D)
F) B) and C)

Question 15

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

Question 16

When a tax is placed on the buyers of a product,the

Accepted Answer

A)   size of the market decreases.
B)   effective price received by sellers decreases, and the price paid by buyers increases.
C)   demand for the product decreases.
D)   All of the above are correct.E) All of the above
F) A) and C)

Question 17

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour,then a shortage of labor will exist.

Accepted Answer

A) True 
 B)False

Question 18

Table 6-2
 
-Refer to Table 6-2.A price floor set at $20 will

Accepted Answer

A)   be binding and will result in a surplus of 50 units.
B)   be binding and will result in a surplus of 100 units.
C)   be binding and will result in a surplus of 250 units.
D)   not be binding.E) A) and C)
F) B) and D)

Question 19

If the government levies a $1,000 tax per boat on sellers of boats,then the price paid by buyers of boats would

Accepted Answer

A)   increase by more than $1,000.
B)   increase by exactly $1,000.
C)   increase by less than $1,000.
D)   decrease by an indeterminate amount.E) B) and C)
F) A) and B)

Question 20

If the government removes a binding price floor from a market,then the price received by sellers will

Accepted Answer

A)   decrease, and the quantity sold in the market will decrease.
B)   decrease, and the quantity sold in the market will increase.
C)   increase, and the quantity sold in the market will decrease.
D)   increase, and the quantity sold in the market will increase.E) B) and C)
F) C) and D)

Exam 6: Supply, Demand, And Government Policies.

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

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Which of the following is not correct?

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If the government removes a $1 tax on sellers of gasoline and imposes the same $1 tax on buyers of gasoline,then the price paid by buyers will

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

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A binding minimum wage may not help all workers,but it does not hurt any workers.

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Table 6-2 -Refer to Table 6-2.A price floor set at $20 will

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

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Figure 6-21 -Refer to Figure 6-22.The burden of the tax on sellers is

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

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Figure 6-26 -Refer to Figure 6-26.A price floor set at $60 would create a surplus of 20 units.

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Over time,housing shortages caused by rent control

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If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour,then a shortage of labor will exist.

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If the minimum wage exceeds the equilibrium wage,then

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If the government removes a binding price floor from a market,then the price received by sellers will

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When a tax is placed on the buyers of a product,the

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If the government levies a $1,000 tax per boat on sellers of boats,then the price paid by buyers of boats would

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The federal government uses the revenue from the FICA (Federal Insurance Contribution Act) tax to pay for

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A binding minimum wage creates unemployment.

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Figure 6-7 -Refer to Figure 6-7.Suppose a price floor of $7 is imposed on this market.As a result,

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A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

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