Question 1

The quantity sold in a market will decrease if the government decreases a

Accepted Answer

A)   binding price floor in that market.
B)   binding price ceiling in that market.
C)   tax on the good sold in that market.
D)   All of the above are correct.E) A) and C)
F) B) and C)

Question 2

Figure 6-7 
-Refer to Figure 6-7.For a price ceiling to be binding in this market,it would have to be set at

Accepted Answer

A)   any price below $6.
B)   a price between $3 and $6.
C)   a price between $6 and $9.
D)   any price above $6.E) A) and D)
F) C) and D)

Question 3

Advocates of the minimum wage admit that it has some adverse effects,but they believe that these effects are small and that a higher minimum wage makes the poor better off.

Accepted Answer

A) True 
 B)False

Question 4

Figure 6-17 
-Refer to Figure 6-17.What is the amount of the tax per unit?

Accepted Answer

A)   $1
B)   $2
C)   $3
D)   $4E) A) and B)
F) A) and C)

Question 5

A price ceiling set below the equilibrium price causes quantity demanded to exceed quantity supplied.

Accepted Answer

A) True 
 B)False

Question 6

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

Question 7

Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

Accepted Answer

A) True 
 B)False

Question 8

When OPEC raised the price of crude oil in the 1970s,it caused the United States'

Accepted Answer

A)   nonbinding price floor on gasoline to become binding.
B)   binding price floor on gasoline to become nonbinding.
C)   nonbinding price ceiling on gasoline to become binding.
D)   binding price ceiling on gasoline to become nonbinding.E) A) and D)
F) B) and C)

Question 9

Figure 6-11 
-Refer to Figure 6-11.If the government imposes a price ceiling at $3,it would be

Accepted Answer

A)   binding if market demand is Demand A or Demand B.
B)   non-binding if market demand is Demand A or Demand B.
C)   binding if market demand is Demand A and non-binding if market demand is Demand B.
D)   non-binding if market demand is Demand A and binding if market demand is Demand B.E) All of the above
F) C) and D)

Question 10

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 D)
F) B) and C)

Question 11

Most labor economists believe that the supply of labor is much more elastic than the demand.

Accepted Answer

A) True 
 B)False

Question 12

When a tax is placed on the sellers of a product,buyers pay

Accepted Answer

A)   more,and sellers receive more than they did before the tax.
B)   more,and sellers receive less than they did before the tax.
C)   less,and sellers receive more than they did before the tax.
D)   less,and sellers receive less than they did before the tax.E) All of the above
F) None of the above

Question 13

A price ceiling set above the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

Accepted Answer

A)   Buyers bear the entire burden of the tax.
B)   Sellers bear the entire burden of the tax.
C)   Buyers and sellers share the burden of the tax.
D)   We have to know whether it is the buyers or the sellers that are required to pay the tax to the government in order to make this determination.E) None of the above
F) A) and B)

Question 15

The economy contains many labor markets for different types of workers.

Accepted Answer

A) True 
 B)False

Question 16

Figure 6-14
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-14.The amount of the tax per unit is

Accepted Answer

A)   $6.
B)   $8.
C)   $14.
D)   $18.E) B) and C)
F) B) and D)

Question 17

If the government removes a binding price floor 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) None of the above
F) C) and D)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Figure 6-10 
-Refer to Figure 6-10.A price ceiling set at

Accepted Answer

A)   $6 will be binding and will result in a shortage of 8 units.
B)   $6 will be binding and will result in a shortage of 4 units.
C)   $16 will be binding and will result in a shortage of 12 units.
D)   $16 will be binding and will result in a shortage of 6 units.E) A) and B)
F) A) and C)

Question 20

A price ceiling caused the gasoline shortage of 1973 in the United States.

Accepted Answer

A) True 
 B)False

Exam 6: Supply,demand,and Government Policies

The quantity sold in a market will decrease if the government decreases a

Correct AnswerverifiedShow Answer

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

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When OPEC raised the price of crude oil in the 1970s,it caused the United States'

Correct AnswerverifiedShow Answer

When a tax is placed on the sellers of a product,buyers pay

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Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14.The amount of the tax per unit is

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Which of the following statements is correct concerning the burden of a tax imposed on take-out food?

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Figure 6-7 -Refer to Figure 6-7.For a price ceiling to be binding in this market,it would have to be set at

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Advocates of the minimum wage admit that it has some adverse effects,but they believe that these effects are small and that a higher minimum wage makes the poor better off.

Correct AnswerverifiedShow Answer

A price ceiling set above the equilibrium price causes a surplus in the market.

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

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

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A price ceiling caused the gasoline shortage of 1973 in the United States.

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Most labor economists believe that the supply of labor is much more elastic than the demand.

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Figure 6-11 -Refer to Figure 6-11.If the government imposes a price ceiling at $3,it would be

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Most labor economists believe that the supply of labor is

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Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

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Figure 6-10 -Refer to Figure 6-10.A price ceiling set at

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A price ceiling set below the equilibrium price causes quantity demanded to exceed quantity supplied.

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Figure 6-17 -Refer to Figure 6-17.What is the amount of the tax per unit?

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The economy contains many labor markets for different types of workers.

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