Question 1

Which of the following is correct?

Accepted Answer

A)   Rent control and the minimum wage are both examples of price ceilings.
B)   Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor.
C)   Rent control is an example of a price floor, and the minimum wage is an example of a price ceiling.
D)   Rent control and the minimum wage are both examples of price floors.E) A) and C)
F) B) and D)

Question 2

Figure 6-35 
-Refer to Figure 6-35. A price ceiling set at $30 would create a shortage of 20 units.

Accepted Answer

A) True 
 B)False

Question 3

Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Accepted Answer

A) True 
 B)False

Question 4

The U.S. Congress first instituted a minimum wage in

Accepted Answer

A)   1776.
B)   1812.
C)   1938.
D)   1975.E) None of the above
F) A) and D)

Question 5

The rationing mechanisms that develop under binding price floors are usually efficient.

Accepted Answer

A) True 
 B)False

Question 6

If the demand curve is very elastic and the supply curve is very inelastic 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 7

Figure 6-25 
-Refer to Figure 6-25. How much tax revenue does this tax generate for the government?

Accepted Answer

A)   $150
B)   $180
C)   $250
D)   $300E) All of the above
F) None of the above

Question 8

Suppose the government has imposed a price floor on the market for soybeans. Which of the following events could transform the price floor from one that is not binding into one that is binding?

Accepted Answer

A)   Farmers use improved, draught-resistant seeds, which lowers the cost of growing soybeans.
B)   The number of farmers selling soybeans decreases.
C)   Consumers' income increases, and soybeans are a normal good.
D)   The number of consumers buying soybeans increases.E) None of the above
F) A) and C)

Question 9

Suppose the demand for macaroni is inelastic, the supply of macaroni is elastic, the demand for cigarettes is inelastic, and the supply of cigarettes is elastic. If a tax were levied on the sellers of both of these commodities, we would expect that the burden of

Accepted Answer

A)   both taxes would fall more heavily on the buyers than on the sellers.
B)   the macaroni tax would fall more heavily on the sellers than on the buyers, and the burden of the cigarette tax would fall more heavily on the buyers than on the sellers.
C)   the macaroni tax would fall more heavily on the buyers than on the sellers, and the burden of the cigarette tax would fall more heavily on the sellers than on the buyers.
D)   both taxes would fall more heavily on the sellers than on the buyers.E) A) and B)
F) None of the above

Question 10

Figure 6-15 
-Refer to Figure 6-15. For a price floor to be binding in this market, it would have to be set at

Accepted Answer

A)   any price below $3.
B)   a price between $2 and $3.
C)   a price between $3 and $4.
D)   any price above $3.E) All of the above
F) B) and C)

Question 11

Figure 6-24 
-Refer to Figure 6-24. The per-unit burden of the tax on buyers of the good is

Accepted Answer

A)   $2.
B)   $4.
C)   $6.
D)   $8.E) B) and D)
F) A) and C)

Question 12

Figure 6-23  
-Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

Accepted Answer

A)   $3.
B)   $4.
C)   $5.
D)   $6.E) A) and D)
F) A) and C)

Question 13

Figure 6-31 
-Refer to Figure 6-31. If the government set a price floor at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 14

The imposition of a binding price floor on a market

Accepted Answer

A)   causes quantity demanded to be greater than quantity supplied.
B)   causes quantity demanded to be less than quantity supplied.
C)   causes quantity demanded to be equal to quantity supplied.
D)   causes a decrease in demand.E) B) and C)
F) A) and D)

Question 15

The minimum wage is an example of a

Accepted Answer

A)   price ceiling.
B)   price floor.
C)   wage subsidy.
D)   tax.E) A) and B)
F) A) and C)

Question 16

The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

A nonbinding price floor

Accepted Answer

A)   (iii)  only
B)   (iv)  only
C)   (i)  and (iii)  only
D)   (ii)  and (iv)  onlyE) A) and B)
F) A) and C)

Question 19

The minimum wage is more often binding for teenagers than for other members of the labor force.

Accepted Answer

A) True 
 B)False

Question 20

Figure 6-6 
-Refer to Figure 6-6. If the government imposes a price floor of $10 on this market, then there will be

Accepted Answer

A)   no surplus.
B)   a surplus of 20 units.
C)   a surplus of 30 units.
D)   a surplus of 10 units.E) C) and D)
F) B) and D)

Exam 6: Supply, Demand, and Government Policies

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

Correct AnswerverifiedShow Answer

Figure 6-24 -Refer to Figure 6-24. The per-unit burden of the tax on buyers of the good is

Correct AnswerverifiedShow Answer

Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Correct AnswerverifiedShow Answer

The imposition of a binding price floor on a market

Correct AnswerverifiedShow Answer

Figure 6-35 -Refer to Figure 6-35. A price ceiling set at $30 would create a shortage of 20 units.

Correct AnswerverifiedShow Answer

The minimum wage is more often binding for teenagers than for other members of the labor force.

Correct AnswerverifiedShow Answer

A nonbinding price floor

Correct AnswerverifiedShow Answer

The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

Correct AnswerverifiedShow Answer

The minimum wage is an example of a

Correct AnswerverifiedShow Answer

Figure 6-25 -Refer to Figure 6-25. How much tax revenue does this tax generate for the government?

Correct AnswerverifiedShow Answer

Suppose the demand for macaroni is inelastic, the supply of macaroni is elastic, the demand for cigarettes is inelastic, and the supply of cigarettes is elastic. If a tax were levied on the sellers of both of these commodities, we would expect that the burden of

Correct AnswerverifiedShow Answer

Figure 6-23 -Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

Correct AnswerverifiedShow Answer

The rationing mechanisms that develop under binding price floors are usually efficient.

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

If the demand curve is very elastic and the supply curve is very inelastic 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 6-15 -Refer to Figure 6-15. For a price floor to be binding in this market, it would have to be set at

Correct AnswerverifiedShow Answer

Suppose the government has imposed a price floor on the market for soybeans. Which of the following events could transform the price floor from one that is not binding into one that is binding?

Correct AnswerverifiedShow Answer

The U.S. Congress first instituted a minimum wage in

Correct AnswerverifiedShow Answer

Figure 6-31 -Refer to Figure 6-31. If the government set a price floor at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at...View AnswerShow Answer

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price floor of $10 on this market, then there will be

Correct AnswerverifiedShow 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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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 floor set at...
View Answer

Correct Answer
verified