Question 1

Under rent control, landlords can cease to be responsive to tenants' concerns about the quality of the housing because

Accepted Answer

A)  with rent control, the government guarantees landlords a minimum level of profit.
B)  they become resigned to the fact that many of their apartments are going to be vacant at any given time.
C)  with shortages and waiting lists, they have no incentive to maintain and improve their property.
D)  with rent control, it becomes the government's responsibility to maintain rental housing.E) None of the above
F) A) and B)

Question 2

Figure 6-17
  ​
-Refer to Figure 6-17. If the government places a $2 tax in the market, the buyer bears $1 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 3

Figure 6-8
 1 before 1973; they paid a price of P2 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price. B) Buyers of gasoline paid a price of P1 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price. C) Buyers of gasoline paid a price of P2 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, with no shortage of gasoline at that price. D) The price ceiling was binding before 1973; the price ceiling was no longer binding after OPEC increased the price of crude oil in 1973." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 6-8. In 1973, OPEC restricted supply and U.S. government regulations limited the price oil companies could charge for gasoline. Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

Accepted Answer

A)  Buyers of gasoline paid a price of P1 before 1973; they paid a price of P2 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price.
B)  Buyers of gasoline paid a price of P1 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, and there was a shortage of gasoline at that price.
C)  Buyers of gasoline paid a price of P2 before 1973; they paid a price of P3 after OPEC increased the price of crude oil in 1973, with no shortage of gasoline at that price.
D)  The price ceiling was binding before 1973; the price ceiling was no longer binding after OPEC increased the price of crude oil in 1973.E) All of the above
F) B) and D)

Question 4

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Accepted Answer

A) True 
 B)False

Question 5

A price floor is

Accepted Answer

A)  a legal maximum on the price at which a good can be sold.
B)  often imposed when buyers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price floor.
C)  a source of efficiency in a market.
D)  a legal minimum on the price at which a good can be sold.E) B) and C)
F) None of the above

Question 6

Most of the burden of a luxury tax falls on the middle class workers who produce luxury goods rather than on the rich who buy them.

Accepted Answer

A) True 
 B)False

Question 7

The minimum wage has its greatest impact on the market for teenage labor.

Accepted Answer

A) True 
 B)False

Question 8

If a price floor is not binding, then it will have no effect on the market.

Accepted Answer

A) True 
 B)False

Question 9

A binding minimum wage creates a shortage of labor.

Accepted Answer

A) True 
 B)False

Question 10

Scenario 6-2
Suppose demand for a product is given by the equation
QS1U1P1D S1S1P0= 120 - 4P
and supply for the product is given by the equation
QS1U1P1S S1S1P0= 4P
-Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Accepted Answer

The equilibrium pric...

Question 11

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-21
  ​
-Refer to Figure 6-21. If the government imposes a tax of $6 per unit in this market, who will bear the greater burden of the tax - the buyers, the sellers, or will the burden be shared equally?

Accepted Answer

With a $6 tax per unit, the bu...

Question 14

Who bears the majority of a tax burden depends on whether the tax is placed on the buyers or the sellers.

Accepted Answer

A) True 
 B)False

Question 15

A price floor set below the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 16

Figure 6-13
 
-Refer to Figure 6-13. What is the amount of the tax per unit?

Accepted Answer

A)  $1
B)  $2
C)  $3
D)  $4E) None of the above
F) All of the above

Question 17

If a price ceiling of $1.50 per gallon is imposed on gasoline, and the market equilibrium price is $2, then the price ceiling is a binding constraint on the market.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Figure 6-13
 
-Refer to Figure 6-13. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the government. After paying the tax, Acme receives how much?

Accepted Answer

A)  $8.00
B)  $9.00
C)  $10.50
D)  $12.00E) All of the above
F) C) and D)

Question 20

Price controls can generate inequities.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

Figure 6-13 -Refer to Figure 6-13. What is the amount of the tax per unit?

Correct AnswerverifiedShow Answer

Scenario 6-2 Suppose demand for a product is given by the equation QD = 120 - 4P and supply for the product is given by the equation QS = 4P -Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow 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 AnswerverifiedShow Answer

If a price ceiling of $1.50 per gallon is imposed on gasoline, and the market equilibrium price is $2, then the price ceiling is a binding constraint on the market.

Correct AnswerverifiedShow Answer

Price controls can generate inequities.

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If a price floor is not binding, then it will have no effect on the market.

Correct AnswerverifiedShow Answer

Who bears the majority of a tax burden depends on whether the tax is placed on the buyers or the sellers.

Correct AnswerverifiedShow Answer

Figure 6-13 -Refer to Figure 6-13. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the government. After paying the tax, Acme receives how much?

Correct AnswerverifiedShow Answer

Figure 6-17 ​ -Refer to Figure 6-17. If the government places a $2 tax in the market, the buyer bears $1 of the tax burden.

Correct AnswerverifiedShow Answer

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

Correct AnswerverifiedShow Answer

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Correct AnswerverifiedShow Answer

Most of the burden of a luxury tax falls on the middle class workers who produce luxury goods rather than on the rich who buy them.

Correct AnswerverifiedShow Answer

The minimum wage has its greatest impact on the market for teenage labor.

Correct AnswerverifiedShow Answer

A binding minimum wage creates a shortage of labor.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-8 -Refer to Figure 6-8. In 1973, OPEC restricted supply and U.S. government regulations limited the price oil companies could charge for gasoline. Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s?

Correct AnswerverifiedShow Answer

A price floor set below the equilibrium price causes a surplus in the market.

Correct AnswerverifiedShow Answer

Under rent control, landlords can cease to be responsive to tenants' concerns about the quality of the housing because

Correct AnswerverifiedShow Answer

Figure 6-21 ​ -Refer to Figure 6-21. If the government imposes a tax of $6 per unit in this market, who will bear the greater burden of the tax - the buyers, the sellers, or will the burden be shared equally?

Correct AnswerverifiedWith a $6 tax per unit, the bu...View AnswerShow Answer

A price floor is

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Correct Answer
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Scenario 6-2 Suppose demand for a product is given by the equation Q^D= 120 - 4P and supply for the product is given by the equation Q^S= 4P -Refer to Scenario 6-2. What are the equilibrium price and equilibrium quantity in the market for this product?

Correct Answer
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The equilibrium pric...
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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.

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Figure 6-17 -Refer to Figure 6-17. If the government places a $2 tax in the market, the buyer bears $1 of the tax burden.

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Figure 6-21 -Refer to Figure 6-21. If the government imposes a tax of $6 per unit in this market, who will bear the greater burden of the tax - the buyers, the sellers, or will the burden be shared equally?

Correct Answer
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With a $6 tax per unit, the bu...
View Answer

Correct Answer
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