Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The distribution of the burden of a tax depends strictly on the elasticity of demand.​

Accepted Answer

A) True 
 B)False

Question 3

Opponents of the minimum wage point out that the minimum wage

Accepted Answer

A)  encourages teenagers to drop out of school.
B)  prevents some workers from getting needed on-the-job training.
C)  contributes to the problem of unemployment.
D)  All of the above are correct.E) B) and D)
F) C) and D)

Question 4

Table 6-1 
-Refer to Table 6-1. Suppose the government imposes a price ceiling of $40 on this market. What will be the size of the shortage in this market?

Accepted Answer

A)  0 units
B)  400 units
C)  1200 units
D)  1600 unitsE) A) and B)
F) B) and D)

Question 5

When a tax is imposed in a market, it will​

Accepted Answer

A)  ​alter the behavior of buyers.
B)  ​alter the behavior of sellers.
C)  ​have no effect on the behavior or either buyers or sellers.
D)  ​affect the behavior of both buyers and sellers.E) B) and C)
F) A) and B)

Question 6

A binding price ceiling may not help all consumers, but it does not hurt any consumers.

Accepted Answer

A) True 
 B)False

Question 7

Figure 6-21 
-Refer to Figure 6-21. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the government. Acme is left with how much money?

Accepted Answer

A)  $8.00
B)  $9.00
C)  $10.50
D)  $12.00E) A) and B)
F) None of the above

Question 8

Suppose sellers of liquor are required to send $5.00 to the government for every bottle of liquor they sell. Further, suppose this tax causes the price paid by buyers of liquor to rise by $3.00 per bottle. Which of the following statements is correct?

Accepted Answer

A)  This tax causes the supply curve for liquor to shift upward by $5.00 at each quantity of liquor.
B)  The effective price received by sellers is $5.00 per bottle less than it was before the tax.
C)  Forty percent of the burden of the tax falls on buyers.
D)  All of the above are correct.E) B) and C)
F) All of the above

Question 9

Figure 6-13
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-13. Which of the following statements is correct?

Accepted Answer

A)  A price ceiling set at $6 would be binding, but a price ceiling set at $4 would not be binding.
B)  A price floor set at $4 would be binding, but a price ceiling set at $4 would not be binding.
C)  A price ceiling set at $3.50 would result in a surplus.
D)  A price floor set at $6.50 would result in a surplus.E) A) and B)
F) B) and C)

Question 10

The effects of rent control in the long run include lower rents and lower-quality housing.

Accepted Answer

A) True 
 B)False

Question 11

You have responsibility for economic policy in the country of Freedonia. Recently, the neighboring country of Sylvania has cut off all exports of oranges to Freedonia. George, who is one of your advisors, says that the best way to avoid a shortage of oranges is to take no action at all. Charles, another one of your advisors, argues that without a binding price floor, a shortage will certainly develop. Otto, a third advisor, suggests that you should impose a binding price ceiling in order to avoid a shortage of oranges. Which of your three advisors is most likely to have studied economics?

Accepted Answer

A)  George
B)  Charles
C)  Otto
D)  Apparently, all three advisors have studied economics, but their views on positive economics are different.E) A) and D)
F) B) and C)

Question 12

The tax burden will fall most heavily on buyers of the good when the demand curve

Accepted Answer

A)  is relatively steep, and the supply curve is relatively flat.
B)  is relatively flat, and the supply curve is relatively steep.
C)  and the supply curve are both relatively flat.
D)  and the supply curve are both relatively steep.E) None of the above
F) A) and D)

Question 13

When a binding price floor is imposed on a market to benefit sellers,

Accepted Answer

A)  no sellers actually benefit.
B)  some sellers benefit, but no sellers are harmed.
C)  some sellers benefit, and some sellers are harmed.
D)  all sellers benefit.E) B) and C)
F) A) and B)

Question 14

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 15

A tax on the buyers of cameras encourages

Accepted Answer

A)  sellers to supply a smaller quantity at every price.
B)  buyers to demand a smaller quantity at every price.
C)  sellers to supply a larger quantity at every price.
D)  Both a and b are correct.E) C) and D)
F) All of the above

Question 16

When a tax of $1.00 per gallon is imposed on sellers of gasoline, the supply curve for gasoline shifts upward, but by less than $1.00.

Accepted Answer

A) True 
 B)False

Question 17

The goal of rent control is to

Accepted Answer

A)  facilitate controlled economic experiments in urban areas.
B)  help landlords by assuring them a low vacancy rate for their apartments.
C)  help the poor by assuring them an adequate supply of apartments.
D)  help the poor by making housing more affordable.E) All of the above
F) A) and B)

Question 18

Figure 6-25 
-Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

Accepted Answer

A)  The buyers send the tax payment.
B)  The sellers send the tax payment.
C)  A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers.
D)  The question of who sends the tax payment cannot be determined from the figure.E) B) and C)
F) None of the above

Question 19

Figure 6-36 
-Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer bears $1 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 20

Figure 6-36 
-Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

The distribution of the burden of a tax depends strictly on the elasticity of demand.

Correct Answer
verified

The tax burden will fall most heavily on buyers of the good when the demand curve

Correct Answer
verified

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. Which of the following statements is correct?

Correct Answer
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Opponents of the minimum wage point out that the minimum wage

Correct Answer
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The goal of rent control is to

Correct Answer
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Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Correct Answer
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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.

Correct Answer
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A binding price ceiling may not help all consumers, but it does not hurt any consumers.

Correct Answer
verified

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price ceiling of $40 on this market. What will be the size of the shortage in this market?

Correct Answer
verified

When a binding price floor is imposed on a market to benefit sellers,

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
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When a tax of $1.00 per gallon is imposed on sellers of gasoline, the supply curve for gasoline shifts upward, but by less than $1.00.

Correct Answer
verified

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer bears $1 of the tax burden.

Correct Answer
verified

When a tax is imposed in a market, it will

Correct Answer
verified

Figure 6-21 -Refer to Figure 6-21. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the government. Acme is left with how much money?

Correct Answer
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Suppose sellers of liquor are required to send $5.00 to the government for every bottle of liquor they sell. Further, suppose this tax causes the price paid by buyers of liquor to rise by $3.00 per bottle. Which of the following statements is correct?

Correct Answer
verified

Figure 6-25 -Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

Correct Answer
verified

The effects of rent control in the long run include lower rents and lower-quality housing.

Correct Answer
verified

A tax on the buyers of cameras encourages

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

The distribution of the burden of a tax depends strictly on the elasticity of demand.​

Correct AnswerverifiedShow Answer

The tax burden will fall most heavily on buyers of the good when the demand curve

Correct AnswerverifiedShow Answer

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Opponents of the minimum wage point out that the minimum wage

Correct AnswerverifiedShow Answer

The goal of rent control is to

Correct AnswerverifiedShow Answer

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer bears $2 of the tax burden.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A binding price ceiling may not help all consumers, but it does not hurt any consumers.

Correct AnswerverifiedShow Answer

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price ceiling of $40 on this market. What will be the size of the shortage in this market?

Correct AnswerverifiedShow Answer

When a binding price floor is imposed on a market to benefit sellers,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a tax of $1.00 per gallon is imposed on sellers of gasoline, the supply curve for gasoline shifts upward, but by less than $1.00.

Correct AnswerverifiedShow Answer

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer bears $1 of the tax burden.

Correct AnswerverifiedShow Answer

When a tax is imposed in a market, it will​

Correct AnswerverifiedShow Answer

Figure 6-21 -Refer to Figure 6-21. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the government. Acme is left with how much money?

Correct AnswerverifiedShow Answer

Suppose sellers of liquor are required to send $5.00 to the government for every bottle of liquor they sell. Further, suppose this tax causes the price paid by buyers of liquor to rise by $3.00 per bottle. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Figure 6-25 -Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

Correct AnswerverifiedShow Answer

The effects of rent control in the long run include lower rents and lower-quality housing.

Correct AnswerverifiedShow Answer

A tax on the buyers of cameras encourages

Correct AnswerverifiedShow Answer

The distribution of the burden of a tax depends strictly on the elasticity of demand.

Correct Answer
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When a tax is imposed in a market, it will

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