Question 1

Table 6-1 
-Refer to Table 6-1. Which of the following price floors would be binding in this market?

Accepted Answer

A)  $70
B)  $60
C)  $50
D)  $40E) C) and D)
F) None of the above

Question 2

When a tax is placed on the buyers of cell phones, the size of the cell phone market

Accepted Answer

A)  and the effective price received by sellers both decrease.
B)  decreases, but the effective price received by sellers increases.
C)  increases, but the effective price received by sellers decreases.
D)  and the effective price received by sellers both increase.E) None of the above
F) A) and D)

Question 3

Figure 6-12 1 to S2, A) the market price will increase to P3. B) a surplus will occur at the new market price of P2. C) the market price will stay at P1. D) a shortage will occur at the new market price of P2." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 6-12. When the price ceiling applies in this market and the supply curve for gasoline shifts from S1 to S2,

Accepted Answer

A)  the market price will increase to P3.
B)  a surplus will occur at the new market price of P2.
C)  the market price will stay at P1.
D)  a shortage will occur at the new market price of P2.E) B) and C)
F) A) and D)

Question 4

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

Question 5

Buyers and sellers always share the burden of a tax equally.

Accepted Answer

A) True 
 B)False

Question 6

Renters of rent-controlled apartments will likely benefit from both lower rents and higher quality of apartments.

Accepted Answer

A) True 
 B)False

Question 7

Figure 6-20 
-Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Accepted Answer

A)  less than 25 units
B)  25 units
C)  between 25 units and 50 units
D)  greater than 50 unitsE) C) and D)
F) B) and C)

Question 8

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) B) and C)

Question 9

​Rent controls can cause

Accepted Answer

A)  ​a decline in the quality of housing available for rent.
B)  ​the development of a black market to allocate apartments to renters.
C)  ​longer search times for renters attempting to locate an apartment.
D)  ​all of these are possible results of rent controls.E) A) and C)
F) A) and B)

Question 10

A tax of $1 on sellers always increases the equilibrium price by $1.

Accepted Answer

A) True 
 B)False

Question 11

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 10 units.
B)  $6 will be binding and will result in a shortage of 6 units.
C)  $16 will be binding and will result in a shortage of 10 units.
D)  $16 will be binding and will result in a shortage of 4 units.E) A) and B)
F) A) and D)

Question 12

When a tax is imposed on a good, the result is always a shortage of the good.

Accepted Answer

A) True 
 B)False

Question 13

The burden that results from a tax on yachts falls more heavily on the buyers of yachts than on the sellers of yachts.

Accepted Answer

A) True 
 B)False

Question 14

If the demand curve is more price elastic than the supply 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 sellers will bea...

Question 15

The long-run effects of rent controls are a good illustration of the principle that

Accepted Answer

A)  society faces a short-run tradeoff between unemployment and inflation.
B)  the cost of something is what you give up to get it.
C)  people respond to incentives.
D)  government can sometimes improve on market outcomes.E) A) and B)
F) B) and C)

Question 16

A price floor is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 17

Figure 6-28 
-Refer to Figure 6-28. Suppose a tax of $4 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)  $4
B)  between $4 and $7
C)  between $7 and $10
D)  $10E) None of the above
F) B) and C)

Question 18

Since half of the FICA tax is paid by firms and the other half is paid by workers, the burden of the tax must fall equally on firms and workers.

Accepted Answer

A) True 
 B)False

Question 19

A tax burden falls more heavily on the side of the market that

Accepted Answer

A)  has a fewer number of participants.
B)  is more inelastic.
C)  is closer to unit elastic.
D)  is less inelastic.E) B) and C)
F) A) and C)

Question 20

Figure 6-5 
-Refer to Figure 6-5. If the solid horizontal line on the graph represents a price ceiling, then the price ceiling is

Accepted Answer

A)  binding and creates a surplus of 60 units of the good.
B)  binding and creates a surplus of 20 units of the good.
C)  not binding but creates a surplus of 40 units of the good.
D)  not binding, and there will be no surplus or shortage of the good.E) B) and C)
F) None of the above

Exam 6: Supply, Demand, and Government Policies

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

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When a tax is placed on the buyers of cell phones, the size of the cell phone market

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A tax burden falls more heavily on the side of the market that

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The burden that results from a tax on yachts falls more heavily on the buyers of yachts than on the sellers of yachts.

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

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A price floor is a legal minimum on the price at which a good or service can be sold.

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When a tax is imposed on a good, the result is always a shortage of the good.

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Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market and the supply curve for gasoline shifts from S1 to S2,

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Figure 6-28 -Refer to Figure 6-28. Suppose a tax of $4 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

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Figure 6-5 -Refer to Figure 6-5. If the solid horizontal line on the graph represents a price ceiling, then the price ceiling is

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Figure 6-20 -Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

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Since half of the FICA tax is paid by firms and the other half is paid by workers, the burden of the tax must fall equally on firms and workers.

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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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Buyers and sellers always share the burden of a tax equally.

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Renters of rent-controlled apartments will likely benefit from both lower rents and higher quality of apartments.

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​Rent controls can cause

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A tax of $1 on sellers always increases the equilibrium price by $1.

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Table 6-1 -Refer to Table 6-1. Which of the following price floors would be binding in this market?

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The long-run effects of rent controls are a good illustration of the principle that

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If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

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Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market and the supply curve for gasoline shifts from S₁ to S₂,

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Rent controls can cause

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The sellers will bea...
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