Question 1

When a tax is placed on the sellers of smart watches, the size of the smart watch market

Accepted Answer

A)  and the effective price received by sellers both increase.
B)  increases, but the effective price received by sellers decreases.
C)  decreases, but the effective price received by sellers increases.
D)  and the effective price received by sellers both decrease.E) A) and D)
F) A) and C)

Question 2

A binding price ceiling causes quantity demanded to be less than quantity supplied.

Accepted Answer

A) True 
 B)False

Question 3

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Accepted Answer

A) True 
 B)False

Question 4

Figure 6-4
Graph (a) 
Graph (b) 
   ​
​
-Refer to Figure 6-4. In graph (b) , there will be

Accepted Answer

A)  a shortage.
B)  equilibrium in the market.
C)  a surplus.
D)  lines of people waiting to buy the good.E) B) and C)
F) A) and D)

Question 5

Figure 6-16
​
  ​
-Refer to Figure 6-16. A price ceiling set at $70 would create a shortage of 40 units.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Figure 6-10
The vertical distance between points A and B represents the tax in the market.
 
-Refer to Figure 6-10. The amount of the tax per unit is

Accepted Answer

A)  $6.
B)  $8.
C)  $14.
D)  $18.E) None of the above
F) All of the above

Question 8

If the supply curve is more price elastic than the demand 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 buyers will bear...

Question 9

Most labor economists believe that the supply of labor is

Accepted Answer

A)  less elastic than the demand, and, therefore, firms bear most of the burden of the payroll tax.
B)  less elastic than the demand, and, therefore, workers bear most of the burden of the payroll tax.
C)  more elastic than the demand, and, therefore, workers bear most of the burden of the payroll tax.
D)  more elastic than the demand, and, therefore, firms bear most of the burden of the payroll tax.E) B) and C)
F) A) and D)

Question 10

If the supply curve is more price elastic than the demand 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 supply curve is more price elas...

Question 11

A tax on sellers increases supply.

Accepted Answer

A) True 
 B)False

Question 12

Figure 6-21
  ​
-Refer to Figure 6-21. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the sellers in this market?

Accepted Answer

With a $6 tax per unit, the am...

Question 13

Under rent control, bribery is a potential mechanism to

Accepted Answer

A)  bring the total price of an apartment (including the bribe)  closer to the equilibrium price.
B)  allocate housing to the poorest individuals in the market.
C)  force the total price of an apartment (including the bribe)  to be less than the market price.
D)  allocate housing to the most deserving tenants.E) B) and D)
F) All of the above

Question 14

A tax on buyers increases the size of a market.

Accepted Answer

A) True 
 B)False

Question 15

The primary effect of rent control in the short run is to reduce rents.

Accepted Answer

A) True 
 B)False

Question 16

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 17

A tax on sellers increases the quantity of the good sold in the market.

Accepted Answer

A) True 
 B)False

Question 18

Figure 6-18
  ​
-Refer to Figure 6-18. If the government set a price ceiling at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set at $15 wou...

Question 19

Figure 6-18
  ​
-Refer to Figure 6-18. 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 20

A price ceiling is always a binding price control, whereas a price floor may be either binding or not binding.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

Figure 6-18 ​ -Refer to Figure 6-18. 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 the supply curve is more price elastic than the demand 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 buyers will bear...View AnswerShow Answer

Figure 6-21 ​ -Refer to Figure 6-21. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the sellers in this market?

Correct AnswerverifiedWith a $6 tax per unit, the am...View AnswerShow Answer

Under rent control, bribery is a potential mechanism to

Correct AnswerverifiedShow Answer

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Correct AnswerverifiedShow Answer

Figure 6-16 ​ ​ -Refer to Figure 6-16. A price ceiling set at $70 would create a shortage of 40 units.

Correct AnswerverifiedShow Answer

A binding price ceiling causes quantity demanded to be less than quantity supplied.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedWhen the supply curve is more price elas...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-10 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-10. The amount of the tax per unit is

Correct AnswerverifiedShow Answer

Figure 6-18 ​ -Refer to Figure 6-18. If the government set a price ceiling at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price ceiling set at $15 wou...View AnswerShow Answer

Figure 6-4 Graph (a) Graph (b) ​ ​ -Refer to Figure 6-4. In graph (b) , there will be

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 price ceiling is always a binding price control, whereas a price floor may be either binding or not binding.

Correct AnswerverifiedShow Answer

A tax on sellers increases supply.

Correct AnswerverifiedShow Answer

Most labor economists believe that the supply of labor is

Correct AnswerverifiedShow Answer

When a tax is placed on the sellers of smart watches, the size of the smart watch market

Correct AnswerverifiedShow Answer

A tax on buyers increases the size of a market.

Correct AnswerverifiedShow Answer

A tax on sellers increases the quantity of the good sold in the market.

Correct AnswerverifiedShow Answer

The primary effect of rent control in the short run is to reduce rents.

Correct AnswerverifiedShow Answer

Figure 6-18 -Refer to Figure 6-18. If the government set a price ceiling at $8, would there be a shortage or surplus, and how large would be the shortage/surplus?

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A price ceiling set ...
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The buyers will bear...
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Figure 6-21 -Refer to Figure 6-21. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the sellers in this market?

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With a $6 tax per unit, the am...
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Figure 6-16 -Refer to Figure 6-16. A price ceiling set at $70 would create a shortage of 40 units.

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When the supply curve is more price elas...
View Answer

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Figure 6-18 -Refer to Figure 6-18. If the government set a price ceiling at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

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A price ceiling set at $15 wou...
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Figure 6-4 Graph (a) Graph (b) -Refer to Figure 6-4. In graph (b) , there will be

Correct Answer
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