Question 1

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

Question 2

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

Accepted Answer

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

Question 3

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 4

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 5

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

Accepted Answer

A) True 
 B)False

Question 6

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 floor at $13 for this product. Is this price floor binding, and what will be the size of the shortage/surplus in this market?

Accepted Answer

The price floor will not be bi...

Question 7

Figure 6-22 
-Refer to Figure 6-22. Sellers pay how much of the tax per unit?

Accepted Answer

A)   $0.50.
B)   $1.50.
C)   $3.00.
D)   $5.00.E) B) and D)
F) A) and D)

Question 8

Figure 6-32 
-Refer to Figure 6-32. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set ...

Question 9

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $20 per ticket, then the

Accepted Answer

A)   demand curve will shift upward by $30, and the price paid by buyers will decrease by less than $30.
B)   demand curve will shift upward by $30, and the price paid by buyers will decrease by $30.
C)   supply curve will shift downward by $30, and the effective price received by sellers will increase by less than $30.
D)   supply curve will shift downward by $30, and the effective price received by sellers will increase by $30.E) B) and C)
F) A) and D)

Question 10

The minimum wage has its greatest impact on the market for

Accepted Answer

A)   female labor.
B)   older labor.
C)   black labor.
D)   teenage labor.E) C) and D)
F) A) and C)

Question 11

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) A) and D)

Question 12

Figure 6-29
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-29. The buyers and sellers will bear an equal share of the tax burden if the demand is

Accepted Answer

A)   D1, and the supply is S1.
B)   D2, and the supply is S1.
C)   D1, and the supply is S2.
D)   D2, and the supply is S2.E) B) and D)
F) None of the above

Question 13

A tax on sellers increases supply.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-8 
-Refer to Figure 6-8. If the government imposes a price floor of $5 on this market, then there will be

Accepted Answer

A)   no surplus of the good.
B)   a surplus of 5 units of the good.
C)   a surplus of 10 units of the good.
D)   a surplus of 15 units of the good.E) A) and B)
F) None of the above

Question 15

The quantity sold 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)   More than one of the above is correct.E) B) and D)
F) All of the above

Question 16

In the housing market, supply and demand are

Accepted Answer

A)   more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run.
B)   more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.
C)   more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run.
D)   more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.E) All of the above
F) A) and D)

Question 17

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 18

When a binding price ceiling is imposed on a market,

Accepted Answer

A)   price no longer serves as a rationing device.
B)   the quantity supplied at the price ceiling exceeds the quantity that would have been supplied without the price ceiling.
C)   all buyers benefit.
D)   All of the above are correct.E) B) and C)
F) C) and D)

Question 19

When a payroll tax is enacted, the wage received by workers

Accepted Answer

A)   falls, and the wage paid by firms rises.
B)   falls, and the wage paid by firms falls.
C)   rises, and the wage paid by firms falls.
D)   rises, and the wage paid by firms rises.E) All of the above
F) A) and C)

Question 20

A tax on buyers shifts the demand curve and the supply curve.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $20 per ticket, then the

Correct Answer
verified

When a payroll tax is enacted, the wage received by workers

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

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

Correct Answer
verified

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

Correct Answer
verified

Figure 6-22 -Refer to Figure 6-22. Sellers pay how much of the tax per unit?

Correct Answer
verified

The minimum wage has its greatest impact on the market for

Correct Answer
verified

A tax on sellers increases supply.

Correct Answer
verified

As a rationing mechanism, discrimination according to seller bias is

Correct Answer
verified

The quantity sold in a market will increase if the government

Correct Answer
verified

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
A price ceiling set ...
View Answer

Figure 6-29 Suppose the government imposes a $2 on this market. -Refer to Figure 6-29. The buyers and sellers will bear an equal share of the tax burden if the demand is

Correct Answer
verified

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Correct Answer
verified

A tax on buyers shifts the demand curve and the supply curve.

Correct Answer
verified

When a binding price ceiling is imposed on a market,

Correct Answer
verified

In the housing market, supply and demand are

Correct Answer
verified

Figure 6-8 -Refer to Figure 6-8. If the government imposes a price floor of $5 on this market, then there will be

Correct Answer
verified

Correct Answer
verified
The price floor will not be bi...
View Answer

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

Correct Answer
verified

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

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $20 per ticket, then the

Correct AnswerverifiedShow Answer

When a payroll tax is enacted, the wage received by workers

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

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-22 -Refer to Figure 6-22. Sellers pay how much of the tax per unit?

Correct AnswerverifiedShow Answer

The minimum wage has its greatest impact on the market for

Correct AnswerverifiedShow Answer

A tax on sellers increases supply.

Correct AnswerverifiedShow Answer

As a rationing mechanism, discrimination according to seller bias is

Correct AnswerverifiedShow Answer

The quantity sold in a market will increase if the government

Correct AnswerverifiedShow Answer

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $50, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price ceiling set ...View AnswerShow Answer

Figure 6-29 Suppose the government imposes a $2 on this market. -Refer to Figure 6-29. The buyers and sellers will bear an equal share of the tax burden if the demand is

Correct AnswerverifiedShow Answer

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Correct AnswerverifiedShow Answer

A tax on buyers shifts the demand curve and the supply curve.

Correct AnswerverifiedShow Answer

When a binding price ceiling is imposed on a market,

Correct AnswerverifiedShow Answer

In the housing market, supply and demand are

Correct AnswerverifiedShow Answer

Figure 6-8 -Refer to Figure 6-8. If the government imposes a price floor of $5 on this market, then there will be

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe price floor will not be bi...View AnswerShow Answer

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The sellers will bea...
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
A price ceiling set ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The price floor will not be bi...
View Answer

Correct Answer
verified

Correct Answer
verified