Question 1

Scenario 6-2
Suppose demand for a product is given by the equation  and supply for the product is given by the equation 
-Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Accepted Answer

The equilibrium pric...

Question 2

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

Accepted Answer

A)  a smaller quantity of the good is bought and sold.
B)  a smaller quantity of the good is demanded.
C)  a larger quantity of the good is supplied.
D)  the price rises above the previous equilibrium.E) None of the above
F) C) and D)

Question 3

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

Question 4

Scenario 6-2
Suppose demand for a product is given by the equation  and supply for the product is given by the equation 
-Refer to Scenario 6-2. Suppose the government sets a price ceiling at $17 for this product. Is this price ceiling binding, and what will be the size of the shortage/surplus in this market?

Accepted Answer

The price ceiling will not be ...

Question 5

If a price ceiling is not binding, then

Accepted Answer

A)  the equilibrium price is above the price ceiling.
B)  the equilibrium price is below the price ceiling.
C)  it has no legal enforcement mechanism.
D)  None of the above is correct because all price ceilings must be binding.E) A) and B)
F) B) and C)

Question 6

A price ceiling is binding when it is set

Accepted Answer

A)  above the equilibrium price, causing a shortage.
B)  above the equilibrium price, causing a surplus.
C)  below the equilibrium price, causing a shortage.
D)  below the equilibrium price, causing a surplus.E) A) and B)
F) A) and C)

Question 7

A tax on sellers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Accepted Answer

A) True 
 B)False

Question 8

The term tax incidence refers to

Accepted Answer

A)  whether buyers or sellers of a good are required to send tax payments to the government.
B)  whether the demand curve or the supply curve shifts when the tax is imposed.
C)  the distribution of the tax burden between buyers and sellers.
D)  widespread view that taxes (and death)  are the only certainties in life.E) All of the above
F) A) and B)

Question 9

Suppose buyers of vodka are required to send $5.00 to the government for every bottle of vodka they buy. Further, suppose this tax causes the effective price received by sellers of vodka to fall by $3.00 per bottle. Which of the following statements is correct?

Accepted Answer

A)  This tax causes the demand curve for vodka to shift downward by $5.00 at each quantity of vodka.
B)  The price paid by buyers is $2.00 per bottle more than it was before the tax.
C)  Sixty percent of the burden of the tax falls on sellers.
D)  All of the above are correct.E) C) and D)
F) A) and D)

Question 10

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

Question 11

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

Accepted Answer

A)  demand, raising both the equilibrium price and quantity in the market for artificially-sweetened beverages.
B)  demand, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages.
C)  supply, raising the equilibrium price and lowering the equilibrium quantity in the market for artificially-sweetened beverages.
D)  supply, lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages.E) B) and D)
F) C) and D)

Question 12

Taxes levied on sellers and taxes levied on buyers are equivalent.

Accepted Answer

A) True 
 B)False

Question 13

Rent control

Accepted Answer

A)  is an example of a price ceiling.
B)  leads to a larger shortage of apartments in the long run than in the short run.
C)  leads to lower rents and, in the long run, to lower-quality housing.
D)  All of the above are correct.E) A) and B)
F) B) and D)

Question 14

The tax incidence depends on whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 15

If a tax is levied on the buyers of a product, then the supply curve will

Accepted Answer

A)  not shift.
B)  shift up.
C)  shift down.
D)  become flatter.E) B) and D)
F) None of the above

Question 16

Figure 6-31 
-Refer to Figure 6-31. If the government set a price ceiling at $8, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set ...

Question 17

A payroll tax is a

Accepted Answer

A)  fixed number of dollars that every firm must pay to the government for each worker that the firm hires.
B)  tax that each firm must pay to the government before the firm can hire workers and operate its business.
C)  tax on the wages that firms pay their workers.
D)  tax on all wages above the minimum wage.E) A) and C)
F) B) and C)

Question 18

Which of the following is correct?

Accepted Answer

A)  Workers determine the supply of labor, and firms determine the demand for labor.
B)  Workers determine the demand for labor, and firms determine the supply of labor.
C)  The labor market is a single market for all different types of workers.
D)  The price of the product produced by labor adjusts to balance the supply of labor and the demand for labor.E) A) and B)
F) All of the above

Question 19

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 D)

Question 20

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 D)

Exam 6: Supply, Demand, and Government Policies

Rent control

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
verified

The term tax incidence refers to

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

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

Correct Answer
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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?

Correct Answer
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If a tax is levied on the buyers of a product, then the supply curve will

Correct Answer
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Scenario 6-2 Suppose demand for a product is given by the equation and supply for the product is given by the equation -Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Correct Answer
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The equilibrium pric...
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A price ceiling is binding when it is set

Correct Answer
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Suppose buyers of vodka are required to send $5.00 to the government for every bottle of vodka they buy. Further, suppose this tax causes the effective price received by sellers of vodka to fall by $3.00 per bottle. Which of the following statements is correct?

Correct Answer
verified

A tax on sellers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Correct Answer
verified

A payroll tax is a

Correct Answer
verified

The tax incidence depends on whether the tax is levied on buyers or sellers.

Correct Answer
verified

Taxes levied on sellers and taxes levied on buyers are equivalent.

Correct Answer
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Correct Answer
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The price ceiling will not be ...
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Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

Correct Answer
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Figure 6-31 -Refer to Figure 6-31. If the government set a price ceiling at $8, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
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A price ceiling set ...
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If a price ceiling is not binding, then

Correct Answer
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Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Rent control

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

The term tax incidence refers to

Correct AnswerverifiedShow Answer

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

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

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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If a tax is levied on the buyers of a product, then the supply curve will

Correct AnswerverifiedShow Answer

Scenario 6-2 Suppose demand for a product is given by the equation and supply for the product is given by the equation -Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

A price ceiling is binding when it is set

Correct AnswerverifiedShow Answer

Suppose buyers of vodka are required to send $5.00 to the government for every bottle of vodka they buy. Further, suppose this tax causes the effective price received by sellers of vodka to fall by $3.00 per bottle. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

A tax on sellers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Correct AnswerverifiedShow Answer

A payroll tax is a

Correct AnswerverifiedShow Answer

The tax incidence depends on whether the tax is levied on buyers or sellers.

Correct AnswerverifiedShow Answer

Taxes levied on sellers and taxes levied on buyers are equivalent.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe price ceiling will not be ...View AnswerShow Answer

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift

Correct AnswerverifiedShow Answer

Figure 6-31 -Refer to Figure 6-31. If the government set a price ceiling at $8, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price ceiling set ...View AnswerShow Answer

If a price ceiling is not binding, then

Correct AnswerverifiedShow Answer

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

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Which of the following is correct?

Correct AnswerverifiedShow Answer

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The equilibrium pric...
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The price ceiling will not be ...
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A price ceiling set ...
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