Question 1

When a binding price ceiling is imposed on a market for a good, some people who want to buy the good cannot do so.

Accepted Answer

A) True 
 B)False

Question 2

Opponents of the minimum wage point out that the minimum wage

Accepted Answer

A)  encourages teenagers to drop out of school.
B)  prevents some workers from getting needed on-the-job training.
C)  contributes to the problem of unemployment.
D)  All of the above are correct.E) All of the above
F) B) and C)

Question 3

Figure 6-19 
-Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. Which of the following is correct?

Accepted Answer

A)  One-fourth of the burden of the tax will fall on buyers, and three-fourths of the burden of the tax will fall on sellers.
B)  One-third of the burden of the tax will fall on buyers, and two-thirds of the burden of the tax will fall on sellers.
C)  One-half of the burden of the tax will fall on buyers, and one-half of the burden of the tax will fall on sellers.
D)  Two-thirds of the burden of the tax will fall on buyers, and one-third of the burden of the tax will fall on sellers.E) None of the above
F) A) and B)

Question 4

Since one effect of rent controls is to reduce the supply of available rental properties,rent controls can contribute to the problems of homelessness in cities with rent controls.
​

Accepted Answer

A) True 
 B)False

Question 5

A minimum wage that is set above a market's equilibrium wage will result in an excess

Accepted Answer

A)  demand for labor, that is, unemployment.
B)  demand for labor, that is, a shortage of workers.
C)  supply of labor, that is, unemployment.
D)  supply of labor, that is, a shortage of workers.E) A) and D)
F) A) and C)

Question 6

Figure 6-9 
-Refer to Figure 6-9. At which price would a price ceiling be binding?

Accepted Answer

A)  $8
B)  $5
C)  $6
D)  $7E) A) and C)
F) B) and C)

Question 7

Which of the following is not correct? In a 2006 survey of Ph.D. economists,

Accepted Answer

A)  47 percent favored eliminating the minimum wage.
B)  14 percent would maintain the minimum wage at its current level.
C)  38 percent would increase the minimum wage.
D)  10 percent would decrease the minimum wage.E) A) and D)
F) C) and D)

Question 8

Minimum-wage laws benefit society by creating a surplus of labor.

Accepted Answer

A) True 
 B)False

Question 9

Not all sellers benefit from a binding price floor.

Accepted Answer

A) True 
 B)False

Question 10

Long lines and gasoline shortages during the 1970's can be attributed completely to the decision by OPEC to raise crude oil prices.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  supply of gasoline to decrease.
B)  quantity of gasoline demanded to decrease.
C)  equilibrium price of gasoline to increase.
D)  All of the above are correct.E) A) and B)
F) B) and C)

Question 12

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 13

Minimum wage laws

Accepted Answer

A)  may encourage some teenagers to drop out and take jobs.
B)  create labor shortages.
C)  have the greatest impact in the market for skilled labor.
D)  All of the above are correct.E) A) and B)
F) B) and D)

Question 14

A price ceiling set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 15

Figure 6-24 
-Refer to Figure 6-24. Which of the following statements is correct?

Accepted Answer

A)  The amount of the tax per unit is $6.
B)  The tax leaves the size of the market unchanged.
C)  The tax is levied on buyers of the good, rather than on sellers.
D)  All of the above are correct.E) C) and D)
F) A) and C)

Question 16

Scenario 6-1
Suppose that demand in the market for good X is given by the equation  and that supply in the market for good X is given by the equation 
-Refer to Scenario 6-1. If the government set a price floor at $7, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 17

If the government wants to reduce smoking, it should impose a tax on

Accepted Answer

A)  buyers of cigarettes.
B)  sellers of cigarettes.
C)  either buyers or sellers of cigarettes.
D)  whichever side of the market is less elastic.E) C) and D)
F) All of the above

Question 18

Figure 6-15 
-Refer to Figure 6-15. Suppose a price floor of $4 is imposed on this market. As a result,

Accepted Answer

A)  buyers' total expenditure on the good decreases by $15.
B)  the supply curve shifts to the left so as to now pass through the point (quantity = 30, price = $4) .
C)  the quantity demanded of the good decreases by 30 units.
D)  the number of units sold in the market will increase by 15 units.E) A) and D)
F) A) and B)

Question 19

Figure 6-25 
-Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

Accepted Answer

A)  The buyers send the tax payment.
B)  The sellers send the tax payment.
C)  A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers.
D)  The question of who sends the tax payment cannot be determined from the figure.E) C) and D)
F) None of the above

Question 20

Table 6-5 
-Refer to Table 6-5. Which of the following price ceilings would be binding in this market?

Accepted Answer

A)  $3
B)  $6
C)  $9
D)  None of the above price ceilings would be binding.E) C) and D)
F) A) and D)

Exam 6: Supply, Demand, and Government Policies

Since one effect of rent controls is to reduce the supply of available rental properties,rent controls can contribute to the problems of homelessness in cities with rent controls. ​

Correct AnswerverifiedShow Answer

Figure 6-15 -Refer to Figure 6-15. Suppose a price floor of $4 is imposed on this market. As a result,

Correct AnswerverifiedShow Answer

Figure 6-25 -Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

Correct AnswerverifiedShow Answer

A price ceiling set above the equilibrium price is not binding.

Correct AnswerverifiedShow Answer

Minimum wage laws

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Opponents of the minimum wage point out that the minimum wage

Correct AnswerverifiedShow Answer

If the government wants to reduce smoking, it should impose a tax on

Correct AnswerverifiedShow Answer

Figure 6-19 -Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. Which of the following is correct?

Correct AnswerverifiedShow Answer

Long lines and gasoline shortages during the 1970's can be attributed completely to the decision by OPEC to raise crude oil prices.

Correct AnswerverifiedShow Answer

A minimum wage that is set above a market's equilibrium wage will result in an excess

Correct AnswerverifiedShow Answer

When a binding price ceiling is imposed on a market for a good, some people who want to buy the good cannot do so.

Correct AnswerverifiedShow Answer

Table 6-5 -Refer to Table 6-5. Which of the following price ceilings would be binding in this market?

Correct AnswerverifiedShow Answer

Figure 6-24 -Refer to Figure 6-24. Which of the following statements is correct?

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Scenario 6-1 Suppose that demand in the market for good X is given by the equation and that supply in the market for good X is given by the equation -Refer to Scenario 6-1. If the government set a price floor at $7, would there be a shortage or surplus, and how large would be the shortage/surplus?

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

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

Correct AnswerverifiedShow Answer

Not all sellers benefit from a binding price floor.

Correct AnswerverifiedShow Answer

Minimum-wage laws benefit society by creating a surplus of labor.

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Which of the following is not correct? In a 2006 survey of Ph.D. economists,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-9 -Refer to Figure 6-9. At which price would a price ceiling be binding?

Correct AnswerverifiedShow Answer

Since one effect of rent controls is to reduce the supply of available rental properties,rent controls can contribute to the problems of homelessness in cities with rent controls.

Correct Answer
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A price floor set at...
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