Question 1

Figure 6-27
This figure shows the market demand and market supply curves for good Z. 
-Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)   $16
B)   between $16 and $20
C)   between $20 and $22
D)   $22E) A) and C)
F) B) and D)

Question 2

If the government removes a binding price ceiling from a market, then the price paid by buyers will

Accepted Answer

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

Question 3

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

Accepted Answer

A) True 
 B)False

Question 4

If a tax is levied on the sellers of a product, then there will be a(n)

Accepted Answer

A)   downward shift of the supply curve.
B)   upward shift of the supply curve.
C)   decrease in quantity supplied.
D)   increase in quantity supplied.E) A) and D)
F) None of the above

Question 5

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 $12 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 wi...

Question 6

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor,

Accepted Answer

A)   quantity demanded decreases.
B)   quantity supplied increases.
C)   there is a surplus.
D)   All of the above are correct.E) All of the above
F) C) and D)

Question 7

Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 8

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 9

A binding minimum wage tends to

Accepted Answer

A)   cause a labor surplus.
B)   cause unemployment.
C)   have the greatest impact in the market for teenage labor.
D)   All of the above are correct.E) A) and D)
F) B) and C)

Question 10

If a tax is imposed on a market with inelastic supply and elastic demand, then

Accepted Answer

A)   buyers will bear most of the burden of the tax.
B)   sellers will bear most of the burden of the tax.
C)   the burden of the tax will be shared equally between buyers and sellers.
D)   it is impossible to determine how the burden of the tax will be shared.E) B) and C)
F) A) and C)

Question 11

Figure 6-16 
-Refer to Figure 6-16. In this market, a minimum wage of $7.25 creates a labor

Accepted Answer

A)   shortage of 2,250 workers.
B)   shortage of 4,500 workers.
C)   surplus of 2,250 workers.
D)   surplus of 4,500 workers.E) A) and C)
F) A) and D)

Question 12

In a free market, the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

Accepted Answer

A) True 
 B)False

Question 13

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

Question 14

In 2012, the U.S. minimum wage according to federal law was

Accepted Answer

A)   $4.25 per hour.
B)   $5.15 per hour.
C)   $5.75 per hour.
D)   $7.25 per hour.E) A) and D)
F) None of the above

Question 15

Figure 6-6 
-Refer to Figure 6-6. Which of the following price floors would be binding in this market?

Accepted Answer

A)   $6
B)   $8
C)   $10
D)   $4E) A) and B)
F) A) and C)

Question 16

A tax on buyers increases the size of a market.

Accepted Answer

A) True 
 B)False

Question 17

Figure 6-36 
-Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer pays $4.

Accepted Answer

A) True 
 B)False

Question 18

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) All of the above
F) A) and C)

Question 19

All buyers benefit from a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 20

The imposition of a binding price ceiling on a market causes

Accepted Answer

A)   quantity demanded to be greater than quantity supplied.
B)   quantity demanded to be less than quantity supplied.
C)   quantity demanded to be equal to quantity supplied.
D)   the price of the good to be greater than its equilibrium price.E) A) and B)
F) B) and C)

Exam 6: Supply, Demand, and Government Policies

The minimum wage has its greatest impact on the market for

Correct Answer
verified

In a free market, the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

Correct Answer
verified

Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers.

Correct Answer
verified

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

Correct Answer
verified

If a tax is imposed on a market with inelastic supply and elastic demand, then

Correct Answer
verified

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

Correct Answer
verified
When the demand curve is more elastic th...
View Answer

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer pays $4.

Correct Answer
verified

A tax on buyers increases the size of a market.

Correct Answer
verified

Figure 6-6 -Refer to Figure 6-6. Which of the following price floors would be binding in this market?

Correct Answer
verified

A binding minimum wage tends to

Correct Answer
verified

All buyers benefit from a binding price ceiling.

Correct Answer
verified

If the government removes a binding price ceiling from a market, then the price paid by buyers will

Correct Answer
verified

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor,

Correct Answer
verified

In 2012, the U.S. minimum wage according to federal law was

Correct Answer
verified

Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct Answer
verified

If a tax is levied on the sellers of a product, then there will be a(n)

Correct Answer
verified

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

Correct Answer
verified

The imposition of a binding price ceiling on a market causes

Correct Answer
verified

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $7.25 creates a labor

Correct Answer
verified

Correct Answer
verified
The price ceiling wi...
View Answer

Exam 6: Supply, Demand, and Government Policies

The minimum wage has its greatest impact on the market for

Correct AnswerverifiedShow Answer

In a free market, the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

Correct AnswerverifiedShow Answer

Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers.

Correct AnswerverifiedShow Answer

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

Correct AnswerverifiedShow Answer

If a tax is imposed on a market with inelastic supply and elastic demand, then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedWhen the demand curve is more elastic th...View AnswerShow Answer

Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer pays $4.

Correct AnswerverifiedShow Answer

A tax on buyers increases the size of a market.

Correct AnswerverifiedShow Answer

Figure 6-6 -Refer to Figure 6-6. Which of the following price floors would be binding in this market?

Correct AnswerverifiedShow Answer

A binding minimum wage tends to

Correct AnswerverifiedShow Answer

All buyers benefit from a binding price ceiling.

Correct AnswerverifiedShow Answer

If the government removes a binding price ceiling from a market, then the price paid by buyers will

Correct AnswerverifiedShow Answer

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor,

Correct AnswerverifiedShow Answer

In 2012, the U.S. minimum wage according to federal law was

Correct AnswerverifiedShow Answer

Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct AnswerverifiedShow Answer

If a tax is levied on the sellers of a product, then there will be a(n)

Correct AnswerverifiedShow 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 imposition of a binding price ceiling on a market causes

Correct AnswerverifiedShow Answer

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $7.25 creates a labor

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe price ceiling wi...View AnswerShow Answer

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When the demand curve is more elastic th...
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The price ceiling wi...
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